TaxTMI 
TaxTMI 
INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2005-2006 UNDER SECTION 192 OF THE INCOME-TAX
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....at the following rates: RATES OF INCOME-TAX A. Normal Rates of tax : 1. Where the total income does not exceed Rs.1,00,000. Nil 2. Where the total income exceeds Rs. 1,00,000 but does not exceed Rs. 1,50,000. 10 per cent of the amount by which the total income exceeds Rs. 1,00,000. 3. Where the total income exceeds Rs. 1,50,000 but does not exceed Rs. 2,50,000. Rs. 5,000 plus 20 per cent of the amount by which the total income exceeds Rs.1,50,000. 4. Where the total income exceeds Rs. 2,50,000. Rs. 25,000 plus 30 per cent of the amount by which the total income exceeds Rs. 2,50,000. B. Rates of tax for a woman, resident in India and below sixty-five years of age : 1. Where the total income does not exceed Rs.1,35,000. Nil 2. Where the total income exceeds Rs. 1,35,000 but does not exceed Rs.1,50,000. 10 per cent of the amount by which the total income exceeds Rs. 1,35,000. 3. Where the total income exceeds Rs.1,50,000 but does not exceed Rs. 2,50,000. Rs. 1,500 plus 20 per cent of the amount by which the total income exceeds Rs. 1,50,000. 4. Where the total income exceeds Rs. 2,50,000. Rs. 21,500 plus 30 per cent of the amount by which the total income e....
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....s himself without making any TDS from the salary of the employee. The employer will have to pay such tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head salaries to the employee. Computation of Average Income Tax: 3.3 For the purpose of making the payment of tax mentioned in para 3.2 above, tax is to be determined at the average of income tax computed on the basis of rate in force for the financial year, on the income chargeable under the head "salaries", including the value of perquisites for which tax has been paid by the employer himself. ILLUSTRATION: Suppose that the income chargeable under the head salary of a male employee below sixty-five years of age for the year inclusive of all perquisites is Rs.2,40,000/-, out of which, Rs.40,000/- is on account of non-monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions discussed in para 3.2 above. STEPS: Income chargeable under the head "Salaries" inclusive of all perquisites : Rs. 2,40,000 Tax on Total Salaries : Rs. 23,000 Average Rate of Tax [(23,000/2,40,000) × 100]: 9.58% Tax payable on Rs.40,000 (9.58....
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....y verified by the taxpayer in the same manner as in Form 12C.) (ii) Such income should not be a loss under any such head other than the loss under the head "Income from House Property" for the same financial year. The person responsible for making payment (DDO) shall take such other income and tax, if any, deducted at source from such income, and the loss, if any, under the head "Income from House Property" into account for the purpose of computing tax deductible under section 192 of the Income-tax Act. However, this sub-section shall not in any case have the effect of reducing the tax deductible (except where the loss under the head "Income from House Property" has been taken into account) from income under the head "Salaries" below the amount that would be so deductible if the other income and the tax deducted thereon had not been taken into account'. In other words, the DDO can take into account any loss (negative income)only under the head income from House Property and no other head for working out the amount of total tax to be deducted. While taking into the account the loss from House Property, the DDO shall ensure that the assessee files the declaration referred to above a....
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....t, as long as its construction/acquisition is completed within three years, from the end of the financial year in which capital was borrowed the higher deduction would be available in respect of the capital borrowed after 1.4.1999. It may also be noted that there is no stipulation regarding the construction/ acquisition of the residential unit being entirely financed by capital borrowed on or after 01.4.1999.The loan taken prior to 01.4.1999 will carry deduction of interest up to Rs.30,000/ only. However, in any case the total amount of deduction of interest on borrowed capital will not exceed Rs.1,50,000/- in a year. Adjustement for Excess or Shortfall of Deduction: 3.8 The provisions of sub-section (3) of Section 192 allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within that financial year itself. TDS on Payment of Balance Under Provident Fund and Superannuation Fund: 3.9 The trustees of a Recognized Provident Fund, or any person authorized by the regulations of the Fund to make payment of accumulated balances due to employees, shall, in cases where s....
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....ent has to be made within one week from the last day of month in which deduction is made. Penalty for Failure to Deposit Tax Deducted: 4.5 If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201. Sub-section (1A) of section 201 lays down that such person shall be liable to pay simple interest at twelve per cent per annum w.e.f. 08.9.2003 on the amount of such tax from the date on which such tax was deductible to the date on which the tax is actually paid. Section 271C lays down that if any person fails to deduct tax at source, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted by him. Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time the tax deducted at source by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, and with fine. Furnishing of Certificate for Tax Deducted: 4.6 A....
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....vided to the employee is a serious responsibility of the employer, which is expected to be discharged in accordance with law and rules of valuation framed thereunder. Any false information, fabricated documentation or suppression of requisite information will entail consequences therefore provided under the law. The certificates in form no.12BA and form no. 16 are to be issued on tax-deductor's own stationery within one month from the close of the financial year i.e. by April 30 of every year. If he fails to issue these certificates to the person concerned, as required by section 203, he will be liable to pay, by way of penalty, under section 272A, a sum which shall be Rs.100/- for every day during which the failure continues. Mandatory Quoting of PAN and TAN: 4.7 According to the provisions of section 203A of the Income-tax Act, it is obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax-deduction Account No. (TAN) in the Challans, TDS-certificates, returns etc. Detailed instructions in this regard are available in this Department's Circular No.497 (F.No.275/118/87-IT(B) dated 9.10.1987). If a person fails to comply with the provisions of....
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....e payment of tax deducted at source to the credit of the Central Government, it may be ensured that the correct amount of income-tax is recorded in the relevant challan. It may also be ensured that the right type of challan is used. The relevant challan for making payment of tax deducted at source from salaries is challan no. ITNS-281. Where the amount of tax deducted at source is credited to the Central Government through book adjustment, care should be taken to ensure that the correct amount of income-tax is reflected therein. TDS on Income from Pension: 4.11. In the case of pensioners who receive their pension from a nationalized bank, the instructions contained in this circular shall apply in the same manner as they apply to salary-income. The deductions from the amount of pension under section 80C on account of contribution to Life Insurance, Provident Fund, NSC etc., if the pensioners furnish the relevant details to the banks, may be allowed. Necessary instructions in this regard were issued by the Reserve Bank of India to the State Bank of India and other nationalized Banks vide RBI's Pension Circular(Central Series) No.7/C.D.R./1992 (Ref. CO: DGBA: GA (NBS) No.60/GA.64(11....
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....pect of the first three quarters of the financial year and on or before the 15th Junefollowing the last quarter of the financial year. b) The Quarterly Statements are be filed on computer media only in accordance with rule 31A of the Income-tax Rules, 1962. In case of failure in filing of the Quarterly Statement, the person deducting the tax shall be liable for a penalty under section 272A(2)(k) of Rs.100 for each day of default. These Quarterly Statements compulsorily require quoting of the Tax Deduction Account Number (TAN) of the tax deductor and the Permanent Account Number(PAN) of the employees whose tax has been deducted. Therefore, all Drawing and Disbursing Officers of the Central and State Governments/ Departments, who have not yet obtained TAN, must immediately apply for and obtain TAN. Similarly, all employees (including non-resident employees) from whose income, tax is to be deducted may be advised to obtain PAN, if not already obtained, and to quote the same correctly, as otherwise the credit for the tax deducted cannot be given. A penalty under section 272B of Rs.10,000/- has been prescribed for willfully intimating a false PAN. 5. ESTIMATION OF INCOME UNDER THE HE....
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....-clause, the expression Keyman insurance policy shall have the meaning assigned to it in clause (10D) of section 10. It may be noted that, since salary includes pensions, tax at source would have to be deducted from pension also, if otherwise called for. However, no tax is required to be deducted from the commuted portion of pension as explained in clause (3) of para 5.2 of this Circular. (4) Section 17 defines the terms "salary", "perquisite" and "profits in lieu of salary". Perquisite includes: a) The value of rent free accommodation provided to the employee by his employer; b) The value of any concession in the matter of rent in respect of any accommodation provided to the employee by his employer; c) The value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases: i) By a company to an employee who is a director of such company; ii) By a company to an employee who has a substantial interest in the company; iii) By an employer (including a company)to an employee, who is not covered by (i) or (ii) above and whose income under the head Salaries ( whether due from or paid or allowed by one or more employers), exclu....
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....ther be located in a remote area or where it is not located in a remote area, the accommodation should be of a temporary nature having plinth area of not more than 800 square feet and should not be located within 8 kilometers of the local limits of any municipality or cantonment board. A project execution site for the purposes of this sub-rule means a site of project up to the stage of its commissioning. A "remote area" means an area located at least 40 kilometers away from a town having a population not exceeding 20,000 as per the latest published all-India census. Off-shore sites of similar nature do not have to meet any requirement of distance. If an accommodation is provided by an employer in a hotel the value of the benefit in such a case shall be 24% of the annual salary or the actual charges paid or payable to such hotel, whichever is lower, for the period during which such accommodation is provided as reduced by any rent actually paid or payable by the employee. However, where in cases the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on transfer from one place to another, no perquisite value for such accommodation provided in....
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....he above amount. However, where such educational institution itself is maintained and owned by the employer or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality if the cost of such education or such benefit per child exceeds Rs.1000/- p.m. V Interest free or concessional loans - It is common practice, particularly in financial institutions, to provide interest free or concessional loans to employees or any member of his household. The value of perquisite arising from such loans would be the excess of interest payable at prescribed interest rate over interest, if any, actually paid by the employee or any member of his household. The prescribed interest rate would now be the rate charged per annum by the State Bank of India as on the 1st day of the relevant financial year in respect of loans of same type and for the same purpose advanced by it to the general public. Perquisite value would be calculated on the basis of the maximum outstanding monthly bal....
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....tween the exercise price and the fair market value on the date of exercise), and as capital gains at the time of transfer of the same. With effect from 1.4.2001 (relevant to assessment year 2001-2002) onward, stock options issued as per guidelines of the Central Government are to be taxed only once, at the time of sale, as capital gains. In cases, where perquisite has been assessed with reference to exercise of the option by the employee under Section 17(2), the fair market value at the time of exercise of the option shall be the cost of acquisition of share for working out the capital gains. The relevant guidelines of the Central Government have been issued vide Notification No.1021(E) dt.11.10.2001. Stock options not in conformity with the above guidelines (non-qualified stock options) shall continue to be taxed at both the stages. It is pertinent to mention that benefits specifically exempt u/s 10(13A), 10(5), 10(14), 17 etc. would continue to be exempt. These include benefits like travel on tour and transfer, leave travel, daily allowance to meet tour expenses as prescribed, medical facilities subject to conditions. 5.2 Incomes not included in the Head "Salaries"(Exemptions)....
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....ise, subject to a maximum of ten months' leave. This exemption will be further limited to the maximum amount specified by the Government of India Notification No.S.O.588(E) dated 31.05.2002 at Rs. 3,00,000/- in relation to such employees who retire, whether on superannuation or otherwise, after 1.4.1998. (5) Under Section 10(10B), the retrenchment compensation received by a workman is exempt from income-tax subject to certain limits. The maximum amount of retrenchment compensation exempt is the sum calculated on the basis provided in section 25F(b) of the Industrial Disputes Act, 1947 or any amount not less than Rs.50,000/- as the Central Government may by notification specify in the official gazette, whichever is less. These limits shall not apply in the case where the compensation is paid under any scheme which is approved in this behalf by the Central Government, having regard to the need for extending special protection to the workmen in the undertaking to which the scheme applies and other relevant circumstances. The maximum limit of such payment is Rs. 5,00,000 where retrenchment is on or after 1.1.1977. (6) Under Section 10(10C), any payment received or receivable (even if....
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....nt (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from Income-tax to the extent as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations. According to rule 2A of the Income-tax Rules, 1962, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be: (a) The actual amount of such allowance received by an employer in respect of the relevant period; or (b) The actual expenditure incurred in payment of rent in excess of 1/10 of the salary due for the relevant period; or (c) Where such accommodation is situated in Bombay, Calcutta, Delhi or Madras, 50% of the salary due to the employee for the relevant period; or (d) Where such accommodation is situated in any other place, 40% of the salary due to the employee for the relevant period, whichever is the least. For this purpose, "Salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites. It has to be noted that only the expenditure actually incurred on payment of rent in resp....
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....f his residence and the place of duty is exempt to the extent of Rs.800 per month vide notification S.O.No. 395(E) dated 13.5.98. (11) Under Section 10(15)(iv)(i) of the Income-tax Act, interest payable by the Government on deposits made by an employee of the Central Government or a State Government or a public sector company from out of his retirement benefits, in accordance with such scheme framed in this behalf by the Central Government and notified in the Official Gazette is exempt from income-tax. By notification No.F.2/14/89-NS-II dated 7.6.89, as amended by notification No.F.2/14/89-NS-II dated 12.10.89, the Central Government has notified a scheme called Deposit Scheme for Retiring Government Employees, 1989 for the purpose of the said clause. (12)Clause (18) of Section 10 provides for exemption of any income by way of pension received by an individual or family pension received by any member of the family of an individual who has been in the service of the Central Government or State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or "Vir Chakra" or such other gallantry ward as may be specifically notified by the Central Government. Such notificat....
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....t, "hospital" includes a dispensary or clinic or nursing home, and "family" in relation to an individual means the spouse and children of the individual. Family also includes parents, brothers and sisters of the individual if they are wholly or mainly dependent on the individual. 5.3 Deductions u/s 16 of the Act Entertainment Allowance: A deduction is also allowed under clause (ii) of section 16 in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee, who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary(exclusive of any allowance, benefit or other perquisite) or five thousand rupees whichever is less. The deduction hitherto available to non-government employees has been withdrawn. Tax On Employment: The tax on employment (Professional Tax) within the meaning of clause (2) of Article 276 of the Constitution of India, leviable by or under any law, shall also be allowed as a deduction in computing the income under the head "Salaries". It may be clarified that Standard Deduction from gross salary income of Rs. 30,000/- or Rs. 20,000/-, depending upon the amount of salaries, w....
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....y, by notification in the Official Gazette, specify in this behalf. [The Central Government has since notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E) dated 3.11.05.] (6) Any sum paid as contribution in the case of an individual, for himself, spouse or any child, (a) for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust of India; (b) for participation in any unit-linked insurance plan of the LIC Mutual Fund notified by the Central Government under clause (23D) of section 10. [The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No. 1561(E) dated 3.11.05.] (7) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may by notification in the Official Gazette, specify; [The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification S.O. No. 1562(E) dated 3.11.05.] (8) Any subscription made to any units of any Mutual Fund, notified under claus....
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....r by way of any instalment or part payment of the amount due under any self-financing or other scheme of any Development Authority, Housing Board etc. The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act. The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property whic....
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....ssee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the Fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee's account, if any) as does not exceed the amount of ten thousand rupees in the previous year. Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate/ deduction with reference to such amount shall not be allowed under section 88 up to assessment year 2005-06 and under section 80C from assessment year 2006-07 onwards. C. As per the provisions of section 80CCD, where an assessee, being an individual employed by the Central Government on or after the 1st day of January, 2004, has in the previous year paid or deposited any amount in his account under a pension sche....
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....y established under sub-section (1) of Section 3 of the Insurance Regulatory and Development Authority Act, 1999. The categories of persons are : (i) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee. (ii) where the assessee is a Hindu Undivided Family, any sum paid to effect or to keep in force an insurance on the health of any member of the family. However, the deduction can be allowed for a sum not exceeding Rs. 15,000/- per annum where the assessee or his wife or husband, or dependent parents or any member of the family (in case the assessee is a Hindu Undivided Family) is a senior citizen which means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year. E. Under section 80DD, where an assessee, who is a resident in India, has, during the previous year,- (a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) paid or deposited any a....
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....nsfer of Undertaking and Repeal) Act, 2002 (58 of 2002) ; (b) dependant means (i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them; (ii) in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year; (c) disability shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996)and includes autism, cerebral palsy and multiple disability referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); (d) Life Insurance Corporation shall have the same meaning as in clause (iii) of sub-section (8) of section 88; (e) medical authority means the medical authority as referred to in clause (p) of section 2 of....
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.... is paid in full by the assessee , whichever is earlier. For this purpose - (a) "approved charitable institution" means an institution established for charitable purposes and notified by the Central Government under clause (2C) of section 10, or, an institution referred to in clause (a) of sub-section (2) of Section 80G. (b) "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf; (c) "higher education" means full-time studies for any graduate or post-graduate course in engineering medicine, management, or, for post-graduate course in applied sciences or pure sciences, including mathematics and statistics; (d) "initial assessment year" means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan. G. No deduction should be allowed by the D.D.O. from the salary income in respect of any donations made for charitable purposes. The tax relief on such donation....
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....es will be computed before making any deduction under section 80GG. (d) The assessee does not own: (i) any residential accommodation himself or by his spouse or minor child or where such assessee is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or (ii) at any other place, any residential accommodation being accommodation in the occupation of the assessee, the value of which is to be determined under clause (a) of sub section (2) or, as the case may be, clause (a) of sub-section (4) of section 23: The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the assessee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of rent. I. Under section 80U, in computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of fifty thousand rupees. Ho....
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....the nearest multiple of ten rupees. 6.2 Income-tax on such income shall be calculated at the rates given in para 2 of this Circular keeping in view the age and gender of the employee. 6.3 The amount of tax payable so arrived at shall be increased by surcharge (if applicable) and additional surcharge (Education Cess) at the prescribed rate to arrive at the total tax payable. 6.4 The amount of tax as arrived at para 6.3 should be deducted every month in equal installments. Any excess or deficit arising out of any previous deduction can be adjusted by increasing or decreasing the amount of subsequent deductions during the same financial year. 7. MISCELLANEOUS: 7.1 These instructions are not exhaustive and are issued only with a view to helping the employers to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962 and the Finance Act 2005. 7.2 In case any assistance is required, the Assessing Officer/the local Public Relation Officer of the Income-tax Department may be contacted. 7.3 These instructions may be brought to the notic....
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.... & Kashmir, Srinagar 43.Accountant General, Manipur, Imphal 44.Accountant General, Tripura, Agartala 45.Accountant General, Nagaland, Kohima 46.Director of Audit(Central)Kolkatta 47.Director of Audit(Central Revenue), New Delhi 48.Director of Audit (Central), Mumbai 49.Director of Audit, Scientific & Commercial Department, Mumbai 50.All Banks (Public Sector, Nationalised including State Bank of India) 51.Secretary, Reserve Bank of India Central Office P.B.No.406, Mumbai-400001(25 copies for distribution to its Branches). 52.Accounts Officer, Inspector General of Assam Rifles, (Hqrs), Shillong 53.All Chambers of Commerce & Industry 54.Lok Sabha /Rajya Sabha Secretariat Libraries(15 copies each) 55.All Officers and Sections in Techinical Wing of CBDT 56.Controller of Accounts, Department of Economic Affairs, New Delhi 57.Manager, Reserve Bank of India, Public Debt Office, Ahmedabad/Bangalore/Bhubneshwar/Mumbai(Fort)/ Mumbai(Central)/Mumbai-8, Kolkatta/Hyderabad/Kanpur/ Jaipur/Chennai/Nagpur/NewDelhi/Patna/Guwahati/Trivandrum 58.Asst.Chief Inspector, R.B.I. Inspection Department Regional audit Cell/Mumbai/Kolkatta/Chennai/New Delhi/Kanpur 59.Accountant General, Post ....
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....aw (Deptt. of Legal Affairs), Shastri Bhawan New Delhi. 87.Food Corporation of India, 16-17, Barakhamba Lane, New Delhi-110001 88.IFCI, Bank of Baroda Building, 16, Parliament Street, New Delhi 89.IDBI, IDBI Tower, Cuff Parad, Mumbai-400 005 90.ICICI, 163, Backbay Reclamation, Mumbai-20 91.NABARD, Poonam Chambers,Dr.Annie Besant Road, P.B.No.552,Worli, Mumbai 92.National Housing Bank, 3rd Floor, Bombay Life Building, 45, Veer Nariman Road, Mumbai 93.IRBI, 19, Netaji Subhash Road, Kolkatta 94.All Foreign Banks operating in India 95.Air India, New Delhi 96.University Grants Commission, Bahadur Shah Jafar Marg, New Delhi 97.The Deputy Director(Admn.), NSSO (FOD), Mahalonobis Bhavan, 6th Floor, 164, G.L.Tagore Road, Kolkata-700108 ANNEXURE-I Example 1 Assessment Year 2006-2007 ANNEXURE-I Assessment Year 2006-07 Example 1 Calculation of Income-tax in the case of a male employee having gross salary income of : (i) Rs. 2,00,000, (ii) Rs. 5,00,000 and (iii) Rs. 10,00,000 Particulars (Rs.) (Rs.) (Rs.) (i) (ii) (iii) Gross Salary Income 2,00,000 5,00,000 10,00,000 (Including allowances) Contribution to G.P.F. 20,000 50,000 1,00,000 Computation of Tota....
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....ustrative calculation of House Rent Allowance u/s 10 (13A)in respect of residential accommodation situated in Delhi in case of a female employee: Particulars : 1. Salary Rs. 2,00,000 2. Dearness Allowance Rs. 1,00,000 3. House Rent Allowance Rs. 1,20,000 4. C.C.A. Rs. 6,000 5. House rent paid Rs. 1,44,000 6. General Provident Fund Rs. 36,000 7. Life Insurance Premium Rs. 4,000 8. Subscription to Infrastructure Bonds Rs. 20,000 Computation of total income and tax payable thereon 1. Salary + D.A. + C.C.A. Rs. 3,06,000 House Rent Allowance Rs. 1,20,000 2. Total Salary income Rs. 4,26,000 3. Less: House Rent allowance exempt u/s 10(13A): Least of: a. Actual amount of HRA received = Rs. 1,20,000 b. Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-30,000) = 1,14,000 c. 50% of Salary(Basic+ DA)= Rs.1,50,000 Rs. 1,14,000 Gross Total Income : Rs. 3,12,000 Less : Deduction u/s 80C: GPF : 36,000 LIC : 4,500 Subscription to infrastructure bonds : 20,000 Total: : 60,000 Rs. 60,000 Total Income: Rs. 2,52,000 Tax on total income Rs. 21,900 Surch....
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....lowance : Rs. 12,000 5. Provident Fund : Rs. 60,000 6. LIP : Rs. 10,000 7. Deposit in NSC VIII issue : Rs. 30,000 8. Rent Paid by the employee for house hired by her : Rs. 1,20,000 9. Repayment of House Building Loan (Principal) : Rs. 60,000 10. Tuition Fees for three children : Rs. 30,000 (Rs.10,000 per child) Computation of total income and tax payable thereon 1. Gross salary : 5,92,000 (Basic+DA+HRA+SDA) Less : House rent allowance exempt u/s 10 (13A) Least of : a. Actual amount of HRA received : 1,80,000 b. Expenditure on rent in excess of 10% of salary (Including D.A.) assuming D.A. is including for retirement benefits (1,20,000 - 40,000) : 80,000 c. 50% of salary (including D.A.) : 2,00,000 (-) 80,000 Gross Total Taxable Income : 5,12,000 Less : Deduction u/s 80C: i. Provident Fund : 60,000 ii. LIP : 10,000 iii. NSC VIII Issue : 30,000 iv. Repayment of HBA : 60,000 v. Tuition Fees (Restricted to two children) : 20,000 Total : 1,80,000 Restricted to 1,00,000 Total Income : 4,12,000 Tax Payable 70,100 Surcharge : Nil Education Cess @ 2% 1,402 Total Tax Payable Rs....
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....the case of a male pensioner who is more than 65 years of age. (Rs.) Particulars Service Pension 1,80,000 Infrastructure bonds 30,000 N.S.C. purchased 20,000 Computation of Taxable Income and Tax thereon Income from Salary (Pension) 1,80,000 Less : Deduction u/s 80C G.P.F. 30,000 N.S.C. 20,000 Total 50,000 Total Income 1,30,000 Tax payable Nil Note: Taxpayers of sixty five years of age or above do not have to pay tax up to a total income of Rs.1,85,000 Annexure II Form for sending particulars of income under section 192(2B) for the year ending 31st March, 2002 1. Name and address of the employee 2. Permanent Account Number 3. Residential status 4. Particulars of income under any head of income other than "salaries" (not being a loss under any such head other than the loss under the head "Income from house property") received in the financial year— (i) Income from house property (in case of loss, enclose computation thereof) .................................. (ii) Profits and gains of business or profession .................................. (iii) Capital gains .................................. (iv) Income from other sources (a) Div....