Now Time has come to be ready to file income Tax return for the Assessment Year 2020-21, however there are lot of changes have been made by the Government.
Some changes are more important to know because Income tax Return cannot be filed correctly if are ignorant of these.
I am just making an effort to cover such amendments/changes in a series like what would be Tax Rate for the Assessment year , changes in particular source of income i.e.salary, house property, Business or profession, capital etc.
In earlier parts, we have included
(1 ) Rate of Income Tax for the Assessment year 2020-21 (Read Part -1 here)
(2)"Exempt income" i.e. Income which do not part of Total Income (Read Part -2 here)
Now we will cover the changes made or brought in the head "Income from Salary" which are specifically applicable for the Assessment year 2020-21 :-
Income from Salary
1. Change in Standard deduction
From Assessment Year 2020-21, Now a person having salary income can claim the standard deduction of Rs.50,000/- from his/her salary income, earlier it was Rs.40,000/- .
2. Relaxation of relief u/s 89 in computation of Interest u/s 234A, 234B & 234C
While calculating interest u/s. 234A, 234B and 234C the amount of Advance Tax, TDS/TCS, Relief u/s. 90,90A or 91, MAT & AMT credit is allowed to be reduced from the tax liability but relief u/s. 89 was not allowed to be reduced form the amount of tax liability.Therefore tax payer was bound to pay more interest on his/her tax liability whenever he/she was getting any arrears of salary or pension etc.
Now from Assessment Year 2020-21, the said relief is also required to be reduced while calculating the amount on which interest u/s. 234A, 234B and 234C shall be determined and payable.
Similar amendment is also made in section 140A ( Self Assessment Tax to be paid ) for calculation of self assessment tax payable before filing the return of income.
Read earlier parts:-
1. Part-1