Allowances / Perquisites allowable to assessee exercising option u/s 115BAC

Allowances and Perquisites allowable to assessee who exercises option u/s 115BAC under New Tax Regime

(Department of Revenue)

Notification No. 38/2020

New Delhi, the 26th June, 2020


G.S.R.  415(E).—In exercise  of  the  powers  conferred  by  sub-section  (2)  of  section  115BAC  read  with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules,1962, namely:‒

1. Short title and commencement: -(1) These rules may be called the Income-tax (13th Amendment) Rules, 2020.

(2) They shall come into force from the 1st day of April, 2021 and shall accordingly apply in relation to the assessment year 2021-22 and subsequent assessment years.

2. In the Income-tax Rules, 1962,-

(a) in rule 2BB, after sub-rule (2), the following sub-rule shall be inserted, namely:—

“(3) Notwithstanding anything contained in sub-rule (1) and (2), an employee, being an assessee, who has  exercised  option  under  sub-section  (5)  of  section  115BAC  shall  be  entitled  to  exemption  only  in respect of the allowances mentioned in sub-clauses (a) to (c) of sub-rule (1) and at serial no. 11 of the Table below sub-rule (2) to the extent and subject to the conditions, if any, specified therein.”;

(b) in  rule  3,  in  sub-rule  (7),  in  clause  (iii),  after  the  proviso,  the  following  proviso  shall  be  inserted, namely:—

Provided further that the exemption provided in the first proviso in respect of free food and non-alcoholic  beverage  provided  by  such  employer  through  paid  voucher  shall  not  apply  to  an  employee, being an assessee, who has exercised option under sub-section (5) of section 115BAC.”.

[F. No.370142/15/2020-TPL]

GUDRUN NEHAR, Director (Tax Policy and Legislation)

Note: The  principal  rules  were  published  in  the  Gazette  of  India,  Extraordinary,  Part-II,  Section-3,  Sub-section  (ii) vide number S.O. 969 (E),dated the 26th March, 1962 and  last amended by the Income-tax (12th Amendment) Rules, 2020, vide notification number G.S.R. 338 (E) dated 29.5.2020.

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