Following section 115BAC shall be inserted by the Finance Act, 2020, w.e.f. 1-4-2021 :
Section 115BAC of Income Tax Act "Tax on income of individuals and Hindu undivided family"
115BAC. (1) Notwithstanding anything contained in this
Act but subject to the provisions of this Chapter, the
income-tax payable in respect of the total income of a
person, being an individual or a Hindu undivided family, for
any previous year relevant to the assessment year beginning
on or after the 1st day of April, 2021, shall, at the option
of such person, be computed at the rate of tax given in the
following Table, if the conditions contained in sub-section
(2) are satisfied, namely:-
| Sl. No. | Total Income | Rate of Tax |
| (1) | (2) | (3) |
| 1. | Upto Rs. 2,50,000 | Nil |
| 2. | From Rs. 2,50,001 to Rs. 5,00,000 | 5 Per cent |
| 3. | From Rs. 5,00,001 to Rs. 7,50,000 | 10 Per cent |
| 4. | From Rs. 7,50,001 to Rs. 10,00,000 | 15 Per cent |
| 5. | From Rs. 10,00,001 to Rs. 12,50,000 | 20 Per cent |
| 6. | From Rs. 12,50,001 to Rs. 15,00,000 | 25 Per Cent |
| 7. | Above Rs. 15,00,000 | 30 Per Cent |
Provided that where the person fails to satisfy the
conditions contained in sub-section (2) in any previous
year, the option shall become invalid in respect of the
assessment year relevant to that previous year and other
provisions of this Act shall apply, as if the option had not
been exercised for the assessment year relevant to that
previous year:
Provided further that where the option is exercised under
clause (i) of sub-section (5), in the event of failure to
satisfy the conditions contained in sub-section (2), it
shall become invalid for subsequent assessment years also
and other provisions of this Act shall apply for those years
accordingly.
(2) For the purposes of sub-section (1), the total income of
the individual or Hindu undivided family shall be computed,-
(i) without any exemption or deduction under the provisions
of clause (5) or clause (13A) or prescribed under clause
(14) (other than those as may be prescribed for this
purpose) or clause (17) or clause (32), of section 10 or
section 10AA or section 16 or clause (b) of section 24 (in
respect of the property referred to in sub-section (2) of
section 23) or clause (iia) of sub-section (1) of section 32
or section 32AD or section 33AB or section 33ABA or
sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of
sub-section (1) or sub-section (2AA) of section 35 or
section 35AD or section 35CCC or clause (iia) of section 57
or under any of the provisions of Chapter VI-A other than
the provisions of sub-section (2) of section 80CCD or
section 80JJAA;
(ii) without set off of any loss,-
(a) carried forward or depreciation from any earlier
assessment year, if such loss or depreciation is
attributable to any of the deductions referred to in clause
(i);
(b) under the head "Income from house property" with any
other head of income;
(iii) by claiming the depreciation, if any, under any
provision of section 32, except clause (iia) of sub-section
(1) of the said section, determined in such manner as may be
prescribed; and
(iv) without any exemption or deduction for allowances or
perquisite, by whatever name called, provided under any
other law for the time being in force.
(3) The loss and depreciation referred to in clause (ii) of
sub-section (2) shall be deemed to have been given full
effect to and no further deduction for such loss or
depreciation shall be allowed for any subsequent year:
Provided that where there is a depreciation allowance in
respect of a block of assets which has not been given full
effect to prior to the assessment year beginning on the 1st
day of April, 2021, corresponding adjustment shall be made
to the written down value of such block of assets as on the
1st day of April, 2020 in the prescribed manner, if the
option under sub-section (5) is exercised for a previous
year relevant to the assessment year beginning on the 1st
day of April, 2021.
(4) In case of a person, having a Unit in the International
Financial Services Centre, as referred to in sub-section
(1A) of section 80LA, which has exercised option under
sub-section (5), the conditions contained in sub-section (2)
shall be modified to the extent that the deduction under
section 80LA shall be available to such Unit subject to
fulfilment of the conditions contained in the said section.
Explanation.-For the purposes of this sub-section, the term
"Unit" shall have the meaning assigned to it in clause (zc)
of section 2 of the Special Economic Zones Act, 2005 (28 of
2005).
(5) Nothing contained in this section shall apply unless
option is exercised in the prescribed manner by the person,-
(i) having income from business or profession, on or before
the due date specified under sub-section (1) of section 139
for furnishing the returns of income for any previous year
relevant to the assessment year commencing on or after the
1st day of April, 2021, and such option once exercised shall
apply to subsequent assessment years;
(ii) having income other than the income referred to in
clause (i), alongwith the return of income to be furnished
under sub-section (1) of section 139 for a previous year
relevant to the assessment year:
Provided that the option under clause (i), once exercised
for any previous year can be withdrawn only once for a
previous year other than the year in which it was exercised
and thereafter, the person shall never be eligible to
exercise option under this section, except where such person
ceases to have any income from business or profession in
which case, option under clause (ii) shall be available.
What is Tax on distributed profits of domestic companies? Section 115 O of Income Tax Act 1961
Section 115BAA Tax on income of certain domestic companies
Section 115BAB Tax on income of new manufacturing domestic companies
Section 115BAC Tax on income of individuals and Hindu undivided family
Section 115 BAD Tax on income of certain resident co-operative societies