Taxpayer Relief to Claim Tax Deductions 15BAC to boost AMT
Table of Contents
Taxpayers Relief to Claim Tax Deductions U/s 115BAC to boost Alternative Tax Regime
- Union Budget for 2023 is coming and Individuals are concerned about the relief that will be provided Budget for 2023. Last budgets provided a range of benefits, including exemptions and deductions, which were frequently subject to several restrictions,
- People are interested in any relief that the upcoming Budget for 2023 may might include. Last budgets have chartists a variety of benefits, like that these benefits are frequently accompanied by a variety of requirements, conditions & restrictions.
- This approach made it challenging for taxpayers to understand the various laws and make use of them. In order to address the issue, the Budget 2020 established a simple and simple regime in Section 115BAC.
- This section was introduced to assist HUFs and individuals pay taxes at a lower rate because the removal of several exemptions and deductions. The taxpayer relinquishes all exemptions and deductions by selecting this choice, including the standard deduction from income and any other deductions allowed by Sections 80C, 80D, or 80TTA, among others.
- Sec 115BAC was done for the advantage of all taxpayers. But, in case income tax taxpayers are allowed to claim few exemptions & deductions,
- Due to the absence of important tax exemptions and deductions, they do not opt for the basic system. Taxpayers often pay off mortgages, student debts, life insurance, and family health insurance. When there are no tax benefits provided for these expenses, he is less inclined to follow the regime.
- Tax deductions should therefore be made accessible to taxpayers who opt for a different tax structure. To optimize the usefulness of section 115BAC, it is suggested that at least the following exemptions and deductions be allowed enhance the utility,
Deductions under section 80C:
- Both Hindu Undivided Family & individuals Income taxpayers are eligible for a deduction under this provision if they pay for repayment of home loans, provident fund contributions, fixed deposits, educational costs, life insurance, contributions to pension funds, etc.
- A maximum deduction under this section is allowed maximum upto INR 1,50,000/- may be allowed by income tax taxpayers under section 80C.
Deduction under Section 80D
- As per income tax deduction under Section 80D allows taxpayers to deduct their medical insurance cost, other medical expenses or annual physicals cost incurred by him during the financial year.
- In case taxpayers’ parents have retirement, than they get additionally deduct of their senior medical insurance cost.
Deduction U/s 80TTB or 80TTA
- As per Section 80TTA, Both Hindu Undivided Family & individuals Income taxpayers are allowed for the deduction on interest received on savings Bank account deposits,.
- Under Section 80TTA, a Income tax deduction allowed a maximum of INR 10k. But In case Income tax taxpayer is a senior citizen, than Section 80TTB allows for a deduction maximum upto INR 50k which is allowed on interest collected on term deposits made with saving bank along with post office.
Basic Difference in the Sec 80TTB & Sec 80TT
Nature | Deduction under Section 80TTB | Deduction under Section 80TTA |
Income tax Applicability | This section 80TTB is apply on senior citizens only | This section 80TTA is apply on HUF & individuals only except for senior citizens |
Deduction Quantum | This deduction will be allowed Up to INR 50,000 | This deduction will be allowed Up to INR 10,000 |
Kind of Income Specified allowed | all kinds of Interest income on deposits | This section will be allowed on Interest income on savings bank account only |
Standard Deduction Under Section 16:
- An taxpayer who has the income that is charged under salaries may deduct allowable deduction as per this section.
- Irrespective of the type of employment or taxable income, we can take the standard deduction of INR 50K is allowed. This deduction cannot exceed Rs 50,000/-
- Moreover In case we are getting our net salary is less than INR 50,000, We can deduct a total amount equal to our salary and not more.
Homeowners claim Deduction U/s 24:
- Section 24 of income tax provision enables Homeowners claim for a income tax deduction for interest paid by Hindu Undivided Family or a person on Home loans taken out to purchase, renovation or building of house property or estate used as a residence purpose only.
- For own occupied house property homeowners claim a deduction under this section may be made up to a maximum celling of INR 2 Lakhs.
House Rent Allowance Exemption:
- Income tax taxpayers under the head salary will be eligible for the tax advantage on House Rent Allowance, you need to: be a salaried individual have the House Rent Allowance component in his salary structure, & he must be stay in a rented accommodation. This is one of the typical exclusions that a worker who receives a salary can claim.
- 50% of employee’s salaryis eligible for House Rent Allowance tax exemption in case taxpayers live in any of metropolitan cities of India include Delhi, Chennai Mumbai, Calcutta. And for other class of any other city, then 40% of the salary can be House Rent Allowance The House Rent Allowance is a portion of an employee’s pay that their employer contributes to cover the expense of housing.
- This Exemption allowed to an employee residing in a rented home an exemption from the HRA paid by their employer.
In Summary
- Income tax Section 115BAC was enacted to help a wide range of Income tax taxpayers, however many taxpayers are unable to fully benefit from it because various Income tax exemptions& deductions are not allowed or available.
- Basic income tax exemptions & benefits should be offered in order to increase the usefulness of Income tax Section 115BAC & make it more beneficial to income tax taxpayers.
- Above income tax deductions & exemptions can important assist individuals in lowering their income tax obligations & making most of their hard-earned money.
- As an alternative, Income tax section 115BAC could give us initial income tax exemption ceiling of INR 5,00,000/- & the highest income tax slab of 30 percentage should only be apply in case taxable income is more than INR 20,00,000/-.
**********************************************************
If this article has helped you in any way, i would appreciate if you could share/like it or leave a comment. Thank you for visiting my blog.
Legal Disclaimer:
The information / articles & any relies to the comments on this blog are provided purely for informational and educational purposes only & are purely based on my understanding / knowledge. They do noy constitute legal advice or legal opinions. The information / articles and any replies to the comments are intended but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as a legal advice or an indication of future results. Therefore, i can not take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog. You are advised not to act or rely on any information / articles contained without first seeking the advice of a practicing professional.