Income-tax (13th Amendment) Rules, 2020. dt 26/06/2020

CBDT issued notification 38/2020 inserting new sub-rule  3 in rule 2BB(. [Prescribed allowances for the purposes of clause (14) of section 10). Budget 2020 introduces a new regime under section 115BAC giving an option to individuals and HUF taxpayers to pay income tax at lower rates, without availing certain specified exemptions and deductions. Now, CBDT provides employee can avail exemption mentioned in sub-clause a to c of sub-rule (1) and at Sr No 11 of the table under sub-rule (2). Here is the full text of the said notification:

(Department of Revenue)
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 nonalcoholic 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.”. 

[Notification No. 38/2020/F. No.370142/15/2020-TPL]
Director (Tax Policy and Legislation)


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