CBDT issued clarification on Perquisites & Allowances to taxpayers opting Lower Tax Rate Option u/s 115BAC of IT Act, 1961

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CBDT vide Notification dated June 26, 2020, made further amendments in the Income Tax Rules, 1962. The following are the amendment which is discussed as hereunder:-

(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 an 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 an option under sub-section (5) of section 115BAC.”.

The Notification can be accessed at: http://egazette.nic.in/WriteReadData/2020/220198.pdf

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