Income Tax Calculation FY 2020-21 – Which Tax Structure to Select? With Automated Income Tax Preparation Excel Based Software All in One for the Non-Govt Employees for F.Y.2020-21

How to do Income Tax Count for FY 2020-21? Which Tax Structure to Choose U/s 115 BAC?

According to Financial plan 2020, you can't claim any tax deduction or exception on the off chance that you intend to pick a new tax structure. Along these lines, as an individual taxpayer on the off chance that you choose the new tax system with diminishes tax rate you have to swear off all tax breaks available today. Luckily, you have an alternative to proceeding with the old tax structure. A salaried individual can switch among old and new tax structure. 

Right off the bat, we will discuss which tax deduction and exception you have to renounce on the off chance that you settle on new tax structure with decrease tax rate. Also, we will step through hardly any exam cases and do income tax figuring for FY 2020-21 to realize which tax structure to choose?

Download Automated Income Tax Revised Form 16 Part A&B for the Financial Year 2020-21 as per New Section 115 BAC- New and Old Tax Regime Option [ This Excel Utility can prepare at a time 50 Employees Form 16 Part A&B]

 A list of Tax Deductions and Exclusion not permitted in new Tax Structure

1 Tax Deduction Under Section 80 C

The most mainstream tax deduction of 1.5 Lakh under section 80C isn't material for new tax structure. This implies you can't claim any profit for venture made in the instruments, for example, PF, PPF, Disaster protection premium, school education costs of kids, ELSS, PPF, NPS and so forth.

You can claim deduction under section 80 CCD for the business commitment because of representative for NPS.

2 Tax Deduction Under Section 80 D

No tax deduction is considered the clinical protection premium and preventive wellbeing test under section 80D for new tax structure.

3 No LTA Advantages

For new tax structure LTA – Leave travel stipend exclusion which is right now available to a salaried representative for twice in a square of four years isn't permitted.

4 HRA

HRA is house lease stipend. HRA is paid to salaried people by the manager as a piece of compensation. The prior taxpayer had the option to claim HRA up as far as possible. In new tax structure it isn't passable.

5 Standard Deduction

A standard deduction advantage of Rs.50000 as of now available to the salaried tax payer isn't appropriate in new tax piece.

6 Section 80TTA Advantages

Section 80TTA gives a deduction of Rs.10000 on intrigue income. On new tax system of this advantage isn't available.

7 Section 80DDB Advantages

Advantages for handicap under section 80DDB up to Rs.40000 not available on the off chance that you are intending to choose new diminished tax structure.

8 Section 80E Instruction Credit

Tax break allowable on the intrigue paid on training credit won't be claimable under section 80E.

9 Section 80G 

You had the option to make gift under section 80G and claim income tax advantage of the identical sum. The said deduction isn't available in the decreased tax structure.

10 Section 24 Home Credit Intrigue

Under section 24 of the Income-tax act, an individual had the option to claim tax deduction on the intrigue instalment on the lodging credit up to a greatest measure of Rs.200000. This advantage isn't expanded on the off chance that you choose new tax structure.

So, all deduction material under part By means of like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, and so on) won't be claimable by those selecting the new tax system.

Conclusion:-

In a large portion of the cases old tax rate with deduction offers higher tax benefits. New diminished tax rate is helpful just in the event that you are not claiming any deductions starting at now. (which is uncommon)

On the off chance that you have home advance and higher income you will get higher tax benefits in old tax rate contrasted with new tax rate.

Download Automated Income Tax Preparation Excel Based Software All in One for the  Non-Govt (Private) Employees for the F.Y.2020-21 and A.Y.2021-22

Feature of this Excel Utility:-

1) This Excel utility prepares and calculate your income tax as per the New Section 115 BAC (New and Old Tax Regime)

2) This Excel Utility has an option where you can choose your option as New or Old Tax Regime

3) This Excel Utility has a unique Salary Structure for All the Non-Government (Private) Employee’s Salary Structure.

4) Automated Income Tax Form 12 BA

5) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21

6) Automated Income Tax Revised Form 16 Part B for the F.Y.2020-21

7) Individual Salary Sheet

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Income Tax Calculation FY 2020-21 – Which Tax Structure to Select? With Automated Income Tax Revised Form 16 Part A&B and Part B for F.Y. 2019-20

How to do Income Tax The calculation for FY 2020-21? Which Tax Structure to Select?

According to Taxplan 2020, you can't guarantee any assessment reasoning or exclusion on the off chance that you intend to pick a new Income Tax Slab. Along these lines, as an individual citizen on the off chance that you settle on the new assessment system with a decrease charge rate, you have to do without all tax cuts accessible today. Luckily, you have an alternative to proceeding with old duty structure. A salaried individual can switch among old and new assessment structure.

Therefore, we will discuss which charge conclusion and exception you have to do without on the of the chance that you pick new expense structure with the diminishing charge rate. Furthermore, we will step through hardly any exam cases and do annual assessment estimation for FY 2020-21 to realize which duty structure to choose?

In other words, reduce of Tax Deductions and Exemption not permitted in new Tax Structure

1 Tax Deduction Under Section 80C

However, the most well-known duty the finding of 1.5 Lakh under segment 80C isn't appropriate for new expense structure. This implies you can't guarantee any profit for venture made in the instruments, for example, PF, PPF, Life protection premium, school education costs of youngsters, ELSS, PPF, NPS and so on.

You can guarantee a conclusion under area 80CCD for business commitment because of a representative for NPS.

2 Tax Deduction Under Section 80D

No duty finding takes into consideration the clinical protection premium and preventive wellbeing test under segment 80D for new expense structure.

3 No LTA Benefits

For instance, a new Tax Rate of  LTA – Leave travel remittance exception which is at present accessible to a salaried worker for twice in the square of four years isn't permitted.

Download – 100 employees Automated Income Tax Revised Form 16 Part B for the Financial Year 2019-20 [ This Excel Utility can prepare at a time 100 employees Form 16 Part B ]

4 HRA

HRA is house lease recompense. HRA is paid to salaried people my boss as a piece of compensation. Prior citizen had the option to guarantee HRA up as far as possible. In a new assessment structure, it isn't passable.

5 Standard Deduction

A standard conclusion advantage of Rs.50000 as of now accessible to a salaried citizen isn't appropriate in the new assessment section.

6 Section 80TTA Benefits

Above all, Section 80TTA gives the conclusion of Rs.10000 on intrigue salary. On a new assessment system, this advantage isn't accessible.

7 Section 80DDB Benefits

In addition, advantages for handicap under segment 80DDB up to Rs.40000 not accessible in the event that you are intending to select new decreased duty structure.

Download – 50 Employees Automated Income Tax Revised Form 16 Part B for the Financial Year 2019-20 [ This Excel Utility can prepare at a time 100employees Form 16 Part B ]

8 Section 80E Education Loan

Tax reduction passable on the intrigue paid on training advance won't be claimable under area 80E.

9 Section 80G of Donation

After that, you had the option to make a gift under area 80G and guarantee annual tax cut of the identical sum. The said reasoning isn't accessible in decreased expense structure.

10 Section 24 Home Loan Interest

Under area 24 of the Income charge act, an individual had the option to guarantee charge finding on the intrigue instalment on the lodging advance up to a most extreme measure of Rs.200000. This advantage isn't broadened in the event that you pick new duty structure.

Similarly, all derivation material under part VIA like segment 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, and so forth) won't be claimable by those deciding on the new duty system.

Download – 100 Employees Automated Income Tax Revised Form 16 Part A&B for the Financial Year 2019-20 [ This Excel Utility can prepare at a time 100 employees Form 16 Part A&B ]

Income Tax Calculation FY 2020-21 (AY 2021-2022)

Now let’s calculate actual tax benefits by doing Income Tax Calculation and comparing both the tax structures in various cases.

Case 1 – Salaried Individual claiming common deduction (80C,80D) and Home Loan Benefits

In first case I will take example of salaried individual with income of 20 Lakh & 10 Lakh. Let’s consider in both the cases individual takes benefits of standard deduction Rs.50000, deduction of Rs.1.5 Lakh under section 80C, Rs.25000 under section 80D and Interest on home loan up to Rs.200000.

Now two options are available to the salaried individual. First he/she can opt for old tax structure with all above deduction or he/she can forgo all deduction and opt for new reduced tax structure.

Download – 50 Employees Automated Income Tax Revised Form 16 Part A&Bfor the Financial Year 2019-20 [ This Excel Utility can prepare at a time 50 employees Form 16 Part A&B ]

If individual has annual income of 20 Lakh and old tax structure is opted with tax deductions. Applicable tax is 2.85 Lakh. If new tax structure is adopted applicable tax amount is 3.37 Lakh. Similarly, if annual income is 10 Lakh and old tax structure is adopted applicable tax is Rs.27500. For new tax structure applicable tax is Rs.75000. Calculation is given below.

Case 2 – Salaried Individual claiming common deduction under section 80C, 80D and Standard Deduction

Gross Income Rs/-	Tax as per Old Tax Structure Rs/-	Tax as per New Tax Structure Rs/-	Additional Tax Saving Rs/- / Payable
7.5 Lakh	18200	39000	-20800
10 Lakh	70200	78000	-7800
12.5 Lakh	124800	130000	-5200
15 Lakh	202800	195000	7800
20 Lakh	358800	351000	7800

In the second case, we should expect that salaried individual is taking full advantages of area 80C, 80D and standard derivations starting at now. Under a new assessment system, these conclusions are not material. Assume the salary level of individual is 10 Lakh. In the event that the old assessment system is chosen payable duty is Rs.70200 then again if

New tax regime is selected payable tax is Rs.78000.

Download – One by One Prepare Automated Income Tax Revised Form 16 Part A&B and Part B  for the Financial Year2019-20 [ This Excel Utility can prepare One by One employees Form 16 Part A&B and Part B ]

Case 3 – Salaried Individual not claiming any deduction or exemptions

In third case let’s assume that salaried individual is not claiming any deduction of exemptions as of now. So, under new tax regime he/she will get benefit of reduced tax rates and he/she needs to pay less taxes. Suppose income level of individual is 15 Lakh. If old tax regime is selected payable tax is Rs.257400 on the other hand if new tax regime is selected payable tax is Rs.195000 only.

ross Income Rs/-	Tax as per Old Tax Structure Rs/-	Tax as per New Tax Structure Rs/-	Additional Tax Saving Rs/-
7.5 Lakh	54600	39000	15600
10 Lakh	106600	78000	28600
12.5 Lakh	179400	130000	49400
15 Lakh	257400	195000	62400
20 Lakh	413400	351000	62400

Download – One by One Prepare Automated Income Tax Revised Form 16 Part B and Part B  for the Financial Year 2019-20 [ This Excel Utility can prepare One by One employee's Form 16 Part B and Part B ]

In conclusion,

From the model of the above case clearly in the greater part of the cases old expense rate with derivation offers higher tax reductions. New diminished expense rate is advantageous just in the event that you are not guaranteeing any reasoning starting at now. (which is uncommon)

In the event that you have home advance and higher pay, you will get higher tax cuts in old assessment rate contrasted with new expense rate.

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