The new financial year has been started. And now, people can select between the new tax regime which is proposed in this year’s budget and the existing one while filing the income tax return. If one selects the new tax regime, it will offer you lower income tax rates without the benefit of 70 tax exemptions and the deductions.
While discussing the same with tax experts and CA, all the individuals who are opting for the new tax regime should know that the tax liability of their will be calculated according to the proposed new tax rates only if the tax return is filed before normal deadline which will be given.
On this, Ashok Shah, senior partner, NA Shah associates states- , “Individuals not having any business income (i.e., salaried individuals and pensioners) must file their tax return before the due date prescribed under section 139(1) of the Act (i.e., 31 July) to take benefit of lower tax rates in the new tax regime. If a tax return is filed belatedly, income tax rates under the new tax regime will not apply for that financial year.”
“On a plain reading of the proposed section, it seems the option to avail concessional tax rates can be exercised for tax return filed as per timelines provided under Section 139(1) of the Income Tax Act 1961. It may not be exercisable for belated returns filed under Section 139(4) of the Act
This is because the law itself requires exercising the option in tax returns filed on time under Section 139(1). In case of belated return filing, one may need to approach CBDT under Section 119(2)(b) of the ITA for condonation of delay. More clarity from the government would be welcome in this regard as there may be genuine reasons where a taxpayer is unable to file tax return on time.”Says Shalini Jain, partner, People advisory services.