INCOME TAX ASSESSMENT 2022 CIRCULAR
INCOME TAX CIRCULAR NO. 24/2022, 7th December, 2022
Rates of Income-tax as per Finance Act, 2022
As per the Finance Act, 2022, the rates of income tax for the FY 2022-23 (i.e. Assessment Year 2023-24) are as follows:
Rates of tax
A. Normal Rates of tax: In the case of every individual other than the individuals referred
to in para (B) and (C) below:
Health and Education Cess
The amount of Income tax as increased by the applicable surcharge shall be further increased by an additional surcharge, for the purposes of Union, to be called “Health and Education Cess on Income-tax”. Health and Education Cess on Income-tax shall be levied at the rate of four percent of incometax including surcharge wherever applicable. No marginal relief shall be available in respect of such cess.
Concessional Rates of Tax u/s 115BAC
Section 115BAC of the Income-tax Act, 1961 was inserted by the Finance Act, 2020 w.e.f. Assessment Year 2021-22. The new section 115BAC provides that the income-tax payable in respect of the total income of a person, being an individual or a HUF, 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 concessional rates as given in table below:
Such person is required to exercise the option in the prescribed manner along with the return of income to be furnished under section 139(1) of the Act for the previous year relevant to the assessment year. The concessional rates of tax provided under section 115BAC are subject to the condition that the total income of the individual or HUF shall be computed without any exemption or deduction specified under clause (i) of sub-section (2) of section 115BAC and without set off of any loss specified in clause (ii) of sub-section 2 of the said section. Further, surcharge on income-tax as contained in Para 2.2 shall be applicable in case of person opting for concessional tax regime.
Further more, in case of a person having income from business or profession, such person is required to exercise the option in prescribed manner on or before the due date specified under such-section (1) of section 139 of the Act for any previous year relevant to assessment year commencing on or after 01.04.2021 and such option once exercised shall apply to subsequent assessment years. However, in case of such persons, the option once exercised can be withdrawn only once and such person shall never be eligible to exercise the option again unless such person ceases to have income from business or profession.
Relief When Salary Paid in Arrear or Advance
Section 89 of the Act provides for relief to an assessee to whom salary is being paid in arrear or advance as a result of which, his total income is assessed at a higher rate than that at which it would otherwise have been assessed. Such an assessee can make an application to the Assessing Officer who shall grant relief in the prescribed manner. Rule 21A of the Rules provide the manner for computation of such relief.
Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89, he/she may furnish to the person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E (Rule 21AA of the Income tax Rules) duly verified by him, and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars and take the same into account in making the deduction under Para(3.1) above. Further, such assessee shall upload the aforesaid Form 10E electronically in the e-Filing portal along with the return of income.