TaxTMI 
TaxTMI 
Section 192 of the Income-tax Act, 1961 - Deduction of tax at source - Salaries - Income-tax deduction from salaries during the financial year 2003-2004 under section 192
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....e. assessment year 2004-2005) at the following rates : Rates of Income-tax 1. Where the total income does not exceed Rs. 50,000. Nil 2. Where the total income exceeds Rs. 50,000 but does not exceed Rs. 60,000. 10 per cent, of the amount by which the total income exceeds Rs. 50,000. 3. Where the total income exceeds Rs. 60,000 but does not exceed Rs. 1,50,000. Rs. 1,000 plus 20 per cent of the amount by which the total income exceeds Rs. 60,000. 4. Where the total income exceeds Rs. 1,50,000. Rs. 19,000 plus 30 per cent of the amount by which the total income exceeds Rs. 1,50,000. Surcharge on income-tax : The amount of income-tax computed in accordance with the preceding provisions of this paragraph shall be reduced by the amount of rebate of income-tax calculated under Chapter VIII and the income-tax so reduced shall be increased by a surcharge at the rate of ten per cent of such income-tax where the total income exceeds eight hundred and fifty thousand rupees. However, the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-taxon a total income of Rs. 8,50,000 by more than the am....
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....employer shall be deemed to be TDS made from the salary of the employee. 3.4 Salary from more than one employer - Sub-section (2) of section 192 deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the taxpayer may choose) from the aggregate salary of the employee who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head Salary due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer). 3.5 Relief when salary paid in arrear or advance - Under sub-section (2A) of section 192 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 sub-sec....
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....e person to whom such payment is made a statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in such form and manner as may be prescribed (Annexure III-A & B). These forms are required to be filed by the employee along with the Return of Income for the relevant year. 3.7 Conditions for claim of deduction of interest on borrowed capital for computation of income from house property - (i) For the purpose of computing income/loss under the head Income from house property in respect of a self-occupied residential house, a normal deduction of Rs. 30,000 is allowable in respect of interest on borrowed capital. However, a deduction on account of interest up to a maximum limit of Rs. 1,50,000 is available if such loan has been taken on or after 1-4-1999 for constructing or acquiring the residential house and the construction or acquisition of the residential unit out of such loan has been completed within three years from the end of the financial year in which capital was borrowed. Such higher deduction is not allowable in respect of interest on capital borrowed for the purposes of repairs or renovation of an....
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....0 Where any contribution made by an employer, including interest on such contributions, if any, in an approved Superannuation Fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the Fund to the extent provided in rule 6 of Part B of the Fourth Schedule to the Act. 3.11 Salary paid in foreign currency - For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the prescribed rate of exchange. Persons responsible for deducting tax and their duties 4.1 Under clause (i) of section 204 of the Act the persons responsible for paying for the purpose of section 192 means the employer himself or if the employer is a Company, the Company itself including the Principal Officer thereof. 4.2 The tax determined as per para 7 should be deducted from the salary under section 192 of the Act. 4.3 Deduction of tax at lower rate - Section 197 enables the taxpayer to make an application in Form No. 13 to his Assessing Officer, and, if the Assessing Officer is satisfied that the total income of the taxpayer justifies the deduction of income-tax at any lower rate or no deduct....
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....other particulars. This certificate, usually called the TDS certificate, has to be furnished within a period of one month from the end of the relevant financial year. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. In the case of employees receiving salary income including pension, the certificate has to be issued in Form No. 16 which has been prescribed under Boards Notification No. S.O. No. 1062(E), dated 4-10-2002. It is, however, clarified that there is no obligation to issue the TDS certificate (Form 16) in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions. As per the amended section 192, the responsibility of providing correct and complete particulars of perquisites or profits in lieu of salary given to an employee is placed on the person responsible for paying such income i.e., the person responsible for deducting tax at source. The form and manner of such particulars as prescribed in Rule 26A, Form No. 12BA and Form No. 16 of the Income-tax Rules as amended by notification No. S.O. No. 1062(E), dated 4-10-2002 (copy enclosed as Annexures III-A & III-B). Information relati....
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.... has been deducted in the statement furnished under section 192(2C), certificates furnished under section 203 and all returns prepared and delivered as per the provisions of section 206 of the Income-tax Act, 1961. 4.8 Annual return of TDS - According to the provisions of section 206 of the Income-tax Act, read with rules 36A and 37 of the Income-tax Rules, the prescribed person in the case of every office of Government, the principal officer in the case of every company, the prescribed person in the case of every local authority or other public body or association, every private employer and every other person responsible for deducting tax under section 192, from Salaries shall, after the end of each financial year, prepare and deliver, by 30th June following the financial year, an annual return of deduction of tax to the designated/concerned Assessing Officer. This return has to be furnished in Form No. 24. It may be noted that a copy of each of the TDS certificates issued during the financial year should be enclosed with the annual return. If a person fails to furnish in due time the annual return, he shall be liable to pay by way of penalty under section 272A, a sum which sh....
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...../1992 (Ref. CO:DGBA:GA(NBS) No. 60/GA.64 (11CVL)-91/92), dated April 27, 1992, and , these instructions should be followed by all the branches of the Banks, which have been entrusted with the task of payment of pensions. Further all branches of the banks are bound under section 203 to issue certificate of tax deducted in Form No. 16 to the pensioners also vide CBDT Circular No. 761, dated 13-1-1998. 4.12 Important circulars - Where non-residents are deputed to work in India and taxes are borne by the employer, if any refund becomes due to the employee after he has already left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it : Circular No. 707, dated 11-7-1995. 4.13 TDS certificates issued by Central Government departments which are making payments by book adjustment, should be accepted by the Assessing Officers if they indicate that credit has been effected to the Income-tax Department by book adjustment and the date of such adjustment is given therein. In such cases, the Assessing Officers may not insist on details like challan numbers, dates of payment into Governm....
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....ployee, along with interest applicable, shall be included in the income of the assessee for the previous year. Other times included in salary, profits in lieu of salary and perquisites are described in section 17 of the Income-tax Act. The scope of the term profit in lieu of salary has been amended so as not to include interest on contributions or any sum received under a Keyman Insurance Policy including the sum allocated by way of bonus on such policy. For the purposes of this sub-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 t....
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....ans 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. The definition of Salary for calculating perquisite value is the same as per earlier Rules. The only change is that medical allowances and reimbursement for treatment of serious illness as prescribed in the proviso below section 17(2)(vi) have now been excluded from the definition of salary for this purpose. For furnished accommodation, the provision of valuation of perquisite of furnishing, fittings and furniture at 10 per cent of original cost per annum or actual hire charges is continued. In case of employer other than Central and State Government, where accommodation is taken on lease or rent by employer, actual amount of lease rental paid or payable by the employer or 10 per cent of salary whichever is lower, as reduced by the rent, if any, actually paid by the employee, is taken as perquisite. If an accommodation is provided by an employer in a hotel the value of the benefit in such a case shall be 24 per cent of the annual salary or the act....
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....ng remuneration of the chauffeur, if any), as increased by the amount representing 10 per cent of the actual cost of the motor car on account of normal wear and tear and as reduced by any amount charged from the employee for such use. (c) Where the motor car is owned by the employee but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are reimbursed to him by the employer and such reimbursement is for the use of the vehicle partly for official and partly for personal or private purposes, the value of perquisite shall be the actual amount of expenditure incurred by the employer as reduced by the amounts specified in column (1) of the Table below. (d) Where the motor car is owned or hired by the employer and is used partly in the performance of his duties and partly for personal or private purposes, the value of perquisite shall be determined as per the Table below : Small car (upto 1.6 ltrs. engine capacity) Large car (above 1.6 ltrs. engine capacity) If chauffeur provided by employer to run the motor car, an additional amount as below is also charged (i) Car owned/hired by....
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....or valuation at 6.25 per cent of salary of the taxpayer for part official use. This has been discontinued. Under the new rules even where the supply is made from the employers own resources, the manufacturing cost per unit incurred by the employer would be the value of perquisite. Any amount paid by the employee for such facilities or services shall be reduced from the above amount. V. Free or concessional education : The old rules already provide that value of free education facility would be the expenditure incurred by the employer. Under the new rules free or concessional education shall be valued in a manner assuming that such expenses are borne by the employee, and would cover cases where an employer may be running, maintaining or directly or indirectly financing the educational institution. Any amount paid by the employee for such facilities or services shall be reduced from the 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 w....
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....epaid against the outstanding loan taken specifically for this purpose. VIII. Travelling, touring, accommodation and other holiday expenses : It is increasingly common for employees to be provided with vacation and holiday facilities. The value of such perquisite shall be the expenditure incurred by the employer. This would also apply to official tours extended as a vacation and family members accompanying taxpayers on official tours. However, leave travel as per section 10(5) and enjoyment of holiday home facilities available uniformly to all classes of employees would remain exempt. IX. Free meals : The provision of free meals varies widely from uniform canteen food, coupons etc. to lavish hotel meals. The scheme of free meals as a staff welfare measure had been recognized and was admissible up to Rs. 35 for each meal. The new rule does not treat as perquisite free meals if the cost per meal does not exceed Rs. 50. Where any amount is recovered from the employee, such amount shall be reduced from the value of perquisite. Such free or subsidised meal should however be provided at office premises or though non-transferable vouchers meant for only meals during working hours. T....
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.... needs to be maintained by the employer : (a) complete details in respect of such expenditure including the date of expenditure and the nature of expenditure; (b) a certificate by employer to the employee to the effect that the same was incurred wholly and exclusively for the performance of official duties. XII. Use of assets : It is common practice for an asset owned by the employer to be used by the employee. This perquisite is to be charged at the rate of 10 per cent of the original cost of the asset as reduced by any charges recovered from the employee for such use. However, the user of Computers and Laptops would not give rise to any perquisite. XIii. Transfer of assets : Often an employee or member of his household benefits from the transfer of movable asset (not being shares or securities) at no cost or at a cost less than its market value from the employer. The difference between the original cost of the movable asset (not being shares or securities) and the sum, if any, paid by the employee, shall be taken as the value of perquisite. In case of a movable asset, which has already been put to use, the original cost shall be reduced by a ....
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....er, 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) - Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act: (1) The value of any travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding (a) on leave to any place in India or (b) on retirement from service, or, after termination of service to any place in India is exempt under clause (5) of section 10 subject, however, to the conditions prescribed in rule 2B of the Income-tax Rules, 1962. For the purpose of this clause, family in relation to an individual means: (i) The spouse and children of the individual; and (ii) The parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual. It may also be noted that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for t....
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....h 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 received in instalments) by an employee of the following bodies at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of public sector company, a scheme of voluntary separation, is exempted from income-tax to the extent that such amount does not exceed five lakh rupees: (a) A public sector company; (b) Any other company; (c) An authority established under a Central, State or Provincial Act; (d) A local authority; (e) A co-operative society; (f) A university established or incorporated or under a Central, State or Provincial Act, or, an Institution declared to be a University under section 3 of the University Grants Commission Act, 1956; (g) Any Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institute of Technology Act, 19....
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....alary 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 respect of residential accommodation occupied by the assessee subject to the limits laid down in rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the house rent allowance or any portion thereof from the total income of the employee. Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measures that salaried employees drawing house rent allowance up to Rs. 3....
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....osit 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 award as may be specifically notified by the Central Government. Such notification has been made vide Notification Nos. S.O. 1948(E), dated 24-11-2000 and 81(E), dated 29-1-2001 which are enclosed as per Annexures IV and IVA. (13) Under section 17 of the Act, exemption from tax will also be available in respect of : (a) the value of any medical treatment provided to an employee or any member of his family, in any hospital maintained by the employer; (b) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or of any member of his family : (i) in any hospital maintained by the Government or any local authority or any other hospi....
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....eduction under this clause : (a) does not exceed five lakh rupees, a deduction of a sum equal to forty per cent of the salary or thirty thousand rupees, whichever is less; (b) exceeds five lakh rupees, a deduction of a sum of twenty thousand rupees. It is clarified that where salary is due from, or paid or allowed by, more than one employer, the deduction under this clause shall be computed with reference to the aggregate salary due, paid or allowed to the assessee and shall, in no case, exceed the amount specified under this clause. 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 to the assessee by an employer, 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 within the meaning of clause (2) of article 276 of the Constitution of India, leviable by or u....
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.... 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. (3) 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 amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in this regard and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, &n....
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....rator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer 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); (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 the Persons with Disabilities (Equa....
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....luding 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 repaying the loan or interest thereon. (5) 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 donations as admissible under section 80G of the Act, will have to be claimed by the tax payer in the return of income. However, D.D.O. on due verification may allow donations to following bodies to the extent of 50% of the contribution : (i) Jawaharlal Nehru Memorial Fund (ii) The Prime Ministers Drought Relief Fund (iii)&n....
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.... of 25 per cent thereof or Rs. 2,000 per month, whichever is less. The total income for working out these percentages 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 sub-clause (i) of clause (a), or as the case may be, clause (b) of sub-section (2) 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. (7) Section 80L of the Income-tax Act allows ded....
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....of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his wife or children, insofar as the sum deducted does not exceed 1/5th of the salary. (4) Any contribution made : (a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies; (b) to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or a minor, or of whom he is a guardian; (c) by an employee to a Recognized Provident Fund; (d) by an employee to an approved superannuation fund; It may be noted that contribution to any Fund shall not include any sums in repayment of loan. (5) Any deposit in a ten year account or a fifteen year account under the Post Office Savings Bank (Cumulative Time Deposit) Rules, 1959, as amended from time to time, where such sums are deposited in an account standing in the....
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....ial Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, deve-lopment or improvement of cities, towns and villages, or for both. (13) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under the head Income from house property (or which would, if it has not been used for assessees own residence, have been chargeable to tax under that head) where such payments are made towards or 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 repayment 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 institution....
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.... shares or debentures forming part of any eligible issue of capital made by a public company or by any public finance institution, which is approved by the Board. (16) Subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board for this purpose. (17) Total amount qualifying for rebate under section 88 - There is an overall limit of Rs. 1,00,000 invested in various items mentioned in sub-paras (1) to (16) of para 6, which qualifies for rebate under section 88. Out of this, amounts invested in items mentioned in sub-paras (1) to (14) can be up to a maximum of Rs. 70,000. Further, instalments paid towards purchase or construction of a residential house, as discussed in sub-para (13) would qualify for rebate only with respect to a maximum amount of Rs. 20,000. Moreover, the qualifying amount for rebate for tuition fees paid, as discussed in sub-para (14) would not exceed an amount of Rs. 12,000 per child. It is further provided that the amount of premium or other payment made on an insurance policy [other than a contract for deferred annuity mentioned in sub-para (2)] sh....
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....enty-thousand rupees, whichever is less. (20) Rebate to woman residents - Under section 88C, as inserted by Finance Act, 2000, an assessee, being a woman resident in India, and below the age of sixty-five years, at any time during the previous year, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under Chapter VIII) on her total income, with which she is chargeable for any assessment year, of an amount equal to hundred percent, of such income-tax or an amount of five thousand rupees, whichever is less. (21) DDOs to satisfy themselves of the genuineness of claim - The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/subscriptions/payments made by the employees, by calling for such particulars/information as they deem necessary before allowing the aforesaid rebate. In case the DDO is not satisfied about the genuineness of the employees claim regarding any deposit/subscription/payment made by the employee, he should not allow the same, and the employee would be free to claim the rebate on such amount by filing his return of income and furnishing the necessary proof etc., the....
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....er the control of the Central/State Governments. Annexure I For assessment year 2004-05 Example 1 Calculation of income-tax in the case of an employee having gross salary income of : (i) Rs. 1,00,000 (ii) Rs. 6,00,000 and (iii) Rs. 9,00,000 Particulars (Rupees) (Rupees) (Rupees) (i) (ii) (iii) Gross salary income 1,00,000 6,00,000 9,00,000 (Including allowances) Contribution to G.P.F. 10,000 20,000 30,000 Computation of total income and tax payable thereon Gross Salary 1,00,000 6,00,000 9,00,000 Less : Standard Deduction u/s 16(i) 30,000 20,000 20,000 Taxable Income 70,000 5,80,000 8,80,000 Tax thereon 3,000 1,48,000 2,38,000 Less : Tax rebate u/s 88 3,000 Nil Nil Income tax payable Nil 1,48,000 2,....
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.... 59,500 Rebate u/s 88 : GPF 20,000 LIC 20,000 Repayment of HBA (Maximum) 20,000 Tuition Fees (Restricted to max. of 12,000 per child or actuals, whichever is lesser) 22,000 Investment in infrastructural Bonds u/s 88(2)(xvi) 20,000 Total 1,02,000 Restricted to Rs. 90,000 (70,000 + 20,000) Rebate @ 15% on Rs. 90,000 13,500 Tax payable 46,000 Add : Surcharge Nil Total Tax Payable 46,000 Example 4 Illustrative calculation of House Rent Allowance u/s 10 (13A) in respect of residential accommodation situated in Delhi Particulars: (Rupees) 1. Salary 49,500 2. Dearness Allowance 43,680 3. House Rent Allowance 9,600 4. C.C.A. 1,200 5. House rent paid 18,000 6. General Provident Fund 24,000 7. Life Insurance Premium 2,500 8. Cumulative Ti....
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....nths) 30,000 (c) Rent recovered from employee 5,000 5. Car expenses reimbursed 40,200 6. Furniture at cost 50,000 7. Subscription to infrastructure bonds u/s 88(2)(xvi) 30,000 8. Life Insurance Premium 3,000 9. Subscription to NSC (VIII) Issue 18,000 10. Contribution to recognised P.F. 24,000 Computation of total income and tax paid thereon (Rupees) 1. Salary 1,08,000 2. Bonus 12,000 Total Salary for Valuation of perquisite i.e., Rs. 10,000 per month 1,20,000 Valuation of perquisites (a) Perq. for flat : Lower of (10% of salary for ten months = Rs. 10,000 actual rent paid = 65,000) 10,000 (b) Perq. for hotel Less of (24% of salary of 2 months = 4800, ....
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....bsp; (Rupees) 1. Gross salary 1,68,400 Less : House rent allowance exempt u/s 10(13A) a. Actual amount of HRA received 12,000 b. Expenditure on rent in excess of 10% of salary (including D.A.) as personal D.A. is including for retirement benefits 8,600) 8,600 c. 50% of salary (including D.....
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.... 50% of Rs. 5,000 2,500 Net taxable income 2,17,500 Tax thereon 39,250 Less rebate under section 88 GPF 20,000 NSC 10,000 Housing Loan repaid 20,000 Total 50,000 Rebate @ 15% of Rs. 50,000 7,500 Tax payable 31,750 Add : Surcharge Nil Total tax payable 31,750 Example 8 Income Tax calculation in the case of an employee who claims loss under the head Income from house property, loan taken before 1-4-1999. Particulars (Rupees) 1. Gross Salary 4,00,000 2. Housing Loan repaid (Principal) 30,000 3. Interest payable on housing loan (Loan taken before 1-4-1999) 2,00,000 4. Donation paid to National Childrens Fund 5,000 5. N.S.C. purchased....
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.... Rebate under section 88 @ 20% of Rs. 20,000 = Rs. 4,000 = restricted to Rs. 2,000 2,000 Tax payable Nil Note:- In the case of a woman assessee who is 65 years of age or more, she will be entitled to rebate only under section 88B of the Act meant for Senior citizens and not under section 88C of the Act. Annexure II Form for sending particulars of income u/s 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 ....