1. Section 115BAC has been inserted by the Finance Act,
2. It is applicable for FY 2020-21, which is relevant for AY 2021-22.
3. As per section 115BAC(1) an *Individual* or *HUF* can *opt* to pay income-tax for assessment year 2021-22 or any subsequent assessment year at the rates specified therein, instead of the rates specified in section 4(1) of the Income Tax Act, 1961, w. section 2(37A) of the Act and f.r.w. Paragraph A(I), (II), (III) of Part III of The First Schedule of the Finance Act, 2020.
4. The rates mentioned in Section 115BAC(1) of termed as *concessional rates*.
5. As per the rates specified in Part III of the Finance Act, separates are specified for following *individual* assesses:
   • resident as well as non-resident assessee below the age of 60 years;
   • resident assesses of 60 years or more but below the age of 80 years;
   • resident assessee of 80 years or

6. However, in *concessional rates* there is no such distinction.

7. Since the *concessional rates* specified in section  115BAC  are  applicable  from AY 2021-22, therefore, the same are also for tax to be ducted u/s 192 from payment  of salary during the FY 2020-21 and subsequent financial years, if opted.
8. As per section 115BAC(5), an assessee is obliged to exercise option to pay tax as per the *concessional rates* mentioned in u/s 115BAC(1), along with the return due to be filed u/s 139(1) / on or before the date u/s 139(1).

Question

9. A question arises, how, at the time of deducting tax at  source u/s 192  during  the  FY 2020-21 an employer would come to know as to whether the employee would opt *concessional rates* under section 115BAC or not?

10. Another question arises, whether the provisions of section 115BAC are to be considered at the time of deduction of tax at source u/s 192?

Answer 

11. In this regards CBDT has issued a Circular No. C 1 of 2020 dated 13.4.2020 u/s 119 of the Act, clarifying as follows:

• An employee having income other than income from business or profession and intends to opt for concessional rates of tax u/s 115BAC, may intimate such intension to his employer (dedcutor) for each previous year;
• On such intimation the employer shall compute his total income (estimated income in terms of section 192) and shall deduct tax thereon at the rates specified u/s
• Such intimation of option to the employer shall be only for the purpose of TDS during the relevant previous
• Such intimation of option, once made to the employer for the purpose of TDS, shall not be modified during that
• If an employee does not intimate such option, the employer shall deduct tax at source without considering the provisions of section
• However, the option at the time of filing of return, as required u/s 115BAC(5), could be different from the option intimated to the employer for the purpose of TDS for that
• Finally, in case at the time of filing of return such assessee opt to pay tax as per section 115BAC, then for the purpose of deduction of tax at source for next financial year, he will not deviate from such
• However, if an assessee does not opt for *concessional rates* u/s 115BAC at the time of filing his return of income, he may opt the *concessional rates* for the purpose of TDS in the subsequent financial

Note: 

{A detailed update on Section 115BAC is being prepared separately}