Salaried individuals can change choice of tax regime when filing ITR

Published: July 21, 2020 5:00 AM

TDS under Section 194A (on interest income) is deducted if aggregate interest income exceeds Rs 50,000 (in case of a senior citizen).

Individuals not having business income can select between the old or new scheme each year, and thus, may exercise the more beneficial option after careful evaluation each year. Individuals not having business income can select between the old or new scheme each year, and thus, may exercise the more beneficial option after careful evaluation each year.

By Chirag Nangia

My salary is Rs 6.5 lakh a year. In March 2020, I had declared HRA but I have chosen the new tax slab without deduction. If I declare PPF and other mutual fund investments, will they consider that now?
—Girish
While calculating taxable income under the old scheme, individuals are entitled to claim tax free allowances like Leave Travel Concession (LTC), House Rent Allowance (HRA), deductions in respect of specified tax saving investments under Chapter VI A, etc. which help reduce the final tax outgo. However, the alternative tax regime offers 6 slabs with lower rates on the condition that taxpayers forego a set of 70 exemptions and deductions available under income tax laws (including LTC, HRA, standard deduction, deduction under chapter VI A, etc.), which gives the taxpayers freedom of investment.

Individuals not having business income can select between the old or new scheme each year, and thus, may exercise the more beneficial option after careful evaluation each year. Salaried individuals can choose between the old or new scheme at the time of making their tax declaration to their employer for the purpose of TDS. However, he is free to change the option and select another one, at the time of filing the ITR.

I am a senior citizen and hold fixed deposits in banks and total interest is less than Rs 50,000 a year. Is it necessary for me to submit 15H to the bank so as to avoid deduction from TDS?
—S Viswanathan
TDS under Section 194A (on interest income) is deducted if aggregate interest income exceeds Rs 50,000 (in case of a senior citizen). Since total FD interest earned by you is less than Rs 50,000, you may choose to not file Form 15H with the bank and no TDS shall be deducted.

I have incurred a long term capital loss by selling shares in FY 2019-20. I want to carry forward this loss to be offset next year. I have no other taxable income. Do I have to report this loss while filing ITR this year?
—Gunjan Shah
Carry forward of long term capital loss is permissible only if an ITR has been furnished for the assessment year to which such loss pertains. You must disclose the amount of loss incurred in the ITR, only then, you shall be eligible to carry forward the said loss.

The writer is director, Nangia Andersen Consulting. Send your queries to fepersonalfinance@expressindia.com

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