CBDT in line with the new taxation regime, has made certain amendments to the Rules vide its notification no 82/2020 dated 01.10.2020, to be applied w.e.f income tax return, tax audit and Form 3 CEB to be filed on or after 01.10.2020.
Under new tax regime companies have option to exercise lower income tax rates of 15% / 22% (subject to certain conditions) against prevailing income tax rate of 25 or 30% as applicable (excluding surcharge)
Below are the highlights of changes as per notification:
Capping of Depreciation allowance u/s 32(1)(ii) to 40%
ITR schedule amended and the depreciation allowance u/s 32(1)(ii) shall be restricted to 40 per cent where Domestic company or individual or co-operative society has opted for lower income tax rate regime.
Relaxation in respect of unabsorbed depreciation attributable to provisions u/s 32(1)(iia)
In cases where an assessee has opted for new income tax regime of lower rate and there exists an unabsorbed additional depreciation in accordance with provisions u/s 32(1)(iia), then relaxation has been provided, wherein instead of lapsing such unabsorbed additional depreciation assessee can increase the opening written down value of the block of asset as on 01.04.2019 by such amount.
Earlier, the entire unabsorbed additional depreciation u/s 32(1)(iia) was disallowed while computing the total income of the assessee.
ITR Schedule has been amended suitably to enable taxpayer to record such adjustment.
Changes in Form 3CD and Form 3CEB
Following changes in Form 3CD has been made;
- Option given to assessee under Clause 8a, to intimate his acceptance of new tax regime u/s 115BA/115BAA/115BAB.
- Clause 18(ca) and 18(cb) amended to include the adjustment in Depreciation Schedule for opening written down value as on 01.04.2019.
- Clause 32(a) amended to include the details of brought forward losses or allowances which are disallowed due to opting new tax regime.
Following changes in Form 3CEB has been made
- Clause 22 with respect to Specified Domestic transactions with relatives defined u/s 40A(2)(b) is omitted.
- Subsequent clauses re-numbered.
- New clause 24 inserted wherein assessee has to report specified domestic transaction(s) with its associated enterprise referred to in sub-section (6) of section 115BAB which has resulted in more than ordinary profits expected to arise in such business.
Forms introduced to exercise the new taxation regime for individual & Co-operative society
Form 10-IE for individual new tax regime and Form 10-IF for co-operative society new tax regime are introduced to capture information for the assessee for opting new taxation regime.
Form 10-IC and 10-ID are already notified for companies opting concessional rate of 22% and 15% respectively
Source: Notification No. 82/2020 dated 01.10.2020 [F. No. 370142/30/2020-TPL]