TaxTMI 
TaxTMI 
Instruction for deduction of tax at source from salaries during the Financial year 2001-2002 under section 192
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....1. Where the total income does not Nil exceed Rs. 50,000. 2. Where the total income exceeds 10 per cent, of the amount by Rs. 50,000 but does not exceed which the total income exceeds Rs. 60,000. Rs. 50,000 3. Where the total income exceeds Rs. 1,000 plus 20 per cent of the Rs. 60,000 but does not exceed amount by which the total income Rs. 1,50,000 exceeds Rs. 60,000 4. Where the total income exceeds Rs. 19,000 plus 30 per cent of Rs. 1,50,000 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 VIIIA and the income tax so reduced shall be increased by a surcharge at the rate of two per cent of such income-tax where the total income exceeds sixty thousand rupees. However, the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on a total income of Rs. 60,000 by more than the amount....
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....the University Grants Commission Act, 1956 (3 of 1956), to be University for the purpose of the Act. 3.4 Sub-section (2B) of section 192 enables a tax payer to furnish particulars of income under any head other than Salaries and of any tax deducted at source thereon, in the prescribed Form (No. 12C) vide Annexure 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 deducible under section 192 of the Income-tax Act. It is, however, provided that 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 the loss from house pr....
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....) 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 during that financial year itself. 3.6 The trustees of a Recognised Provident Fund or any person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall, in cases where sub-rule (1) of rule 9 of Part A of the Fourth Schedule to the Act applies, at the time when the accumulated balance due to an employee is paid, make therefrom the deduction specified in rule 10 of Part A of the Fourth Schedule. 3.7 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. 3.8 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)....
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....ll be between 3 months and 7 years and with fine. 4.6 According to the provisions of section 203, every person responsible for deducting tax at source is required to furnish a certificate to the payee to the effect that tax has been deducted and to specify therein the amount deducted and certain 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. 940(E), dated 25-9-2001. 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 pers....
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....1. 4.8 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 pubic 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 31st May 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 shall be Rs. 100 for every day during which the failure continues, so, however that this sum shall not exceed the amount of tax which was deductible at source. 4.9 A return filed on a floppy, diskette, magnetic cartridge tape, CD-ROM or....
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.... certificate of tax deducted in Form 16 to the pensioners also vide CBDT Circular No. 761, dated 13-1-1998. 4.12 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 Government Account etc., but they should in any case satisfy themselves regarding the genuineness of the certificates produced before them : Circular No. 747, dated 27-12-1996. 4.14 There is a specific procedure laid down for refund of payments made by the deductor in excess of taxes deducted at source, vide Circular No. ....
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....m 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 the value of any benefit or amenity granted or provided free of cost or at concessional rate, in specified cases. Perquisites are charged to tax under the existing provisions for employees who are directors of companies or have substantial interest in a company, or have an income from salaries, excluding the value of all benefits or amenities, exceeding Rs. 24,000. The Finance Act, 2001 amends the provision to raise the monetary limit to Rs. 50,000. The definition of perquisite has also been amended to include the value of any other fringe benefit or amenity as may be prescribed. The details of fringe benefits are to be c....
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....7(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. 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 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 a hotel shall be charged. It may be clarified that while services provided as an integral part of the accommodation, need not be valued separately as perquisite any other services over and above that for which the employer makes payment or reimburses the employee shall be valued as a perquisite as per the residual clause. In other words, composite tariff for accommodation wil....
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....However, where a second and additional cars are provided, such other cars shall be deemed to be for personal use and the value of perquisite shall be computed accordingly. Where fuel and upkeep cost of the employees car is borne or reimbursed by the employer, the amount reasonably attributable to business use is not to be charged as perquisite. For this, user details in the form of log books, odometer reading, etc. should be maintained. Where the car is used partly for purposes of official duties and partly for private or personal use and such details are not available or not properly maintained, the amount paid for or reimbursed less Rs. 1,200 per month for small car or Rs. 1,600 per month for large car would be valued as a perquisite. A higher amount may be deducted on the basis of proper maintenance of details of official use. For claiming higher amount of official use in respect of reimbursement of car expenses or wholly official use of car provided by an employer, the following details and documents need to be maintained: (i) the employer has maintained complete details of journeys undertaken for official purpose which may include date of journey, destina....
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....ue 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 sub-rule shall not apply if the cost of such education or such benefit per child does not exceed Rs. 1,000 p.m. VI. Free or concessional journeys - Under the old rules where an employee avails of free or concessional journeys in conveyance owned by the undertaking for the purpose of transport of passengers or goods, the value of perquisite was taken as Nil. However, under the new rules the value at which such benefit or amenity is offered by such undertaking to the public, the value of perquisite shall now be take....
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....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 recognised and was admissible upto 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 employer, such amount shall be reduced from the value of perquisite. Such free or subsidised meal should, however, be provided at office premises or through non-transferable vouchers meant for only meals during working hours. These vouchers should be provided by employers encashable only at an eatery, a restaurant or a cafe. Tea or similar non-alcoholic beverages and snacks - in the form of light refreshments during working hours are not charged as perquisite. Also, arrangements for meals in remote areas as prescribed in para 5.1 and similar off-shore sites as specified, shall be exempt. However, expenditure on provision of free meals by the employer in excess of Rs. 50 should be treated as perquisite, as reduced by recoveries made from the employee. X. Gift, v....
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....iture to the effect that the same was incurred wholly and exclusively for the performance of official duties; (d) where an employee incurs expenditure on entertainment and claims the same to have been incurred wholly and exclusively in the performance of his duties, details of such entertainment expenses including the nature and purpose of entertainment and persons entertained. XII. Use of assets - It is common practice for an asset owned by the employer to be used by the assessee. This perquisite is to be charged at the rate of 10% of the original cost of the asset as reduced by any charges paid for such use. However, Computers and laptops are exempt. Further, the value of perquisite for an asset used for income for more than ten years would be taken as Nil. 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 ....
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.... day of April, 2001 it has been provided that the employee may, at his option, compute the value of perquisites made available to him or any member of his household for the period beginning on 1st day of April, 2001 and ending on 30th day of September, 2001 in accordance with the Rules, as they stood prior to this amendment. It may, therefore, be desirable for the employer to obtain a declaration from each employee as to the option he wants to follow for purposes of tax deduction at source. However, it should be noted that the option to the taxpayer of using the old or new rules for the period specified above shall be applied uniformly in respect of all perquisites, in case of a particular taxpayer. In other words, one cannot selectively value a particular perquisite by the old rule and another one by the new rule. It is pertinent to mention that benefits specifically exempt under section 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. However, administrative circulars and instructions relating to perquisi....
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....superannuation or otherwise, is exempt under sub-clause (i) of clause (10AA) of section 10. In the case of other employees, this exemption will be determined with reference to the leave to their credit at the time of retirement on superannuation, or otherwise, 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. 1015(E) dated 27-11-1997 at Rs. 2,40,000. (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. (6....
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....ax 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 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 ....
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....d 13-5-1998 (Annexure VI). (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 7-6-1989, as amended by Notification No. F. 2/14/89-NS-II, dated 12-10-1989, 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 award as may be specifically notified by the Central Government. Such notification has been made vide Notifications No. SO 1948(E), dated 24-11-2000 and 81(E), dated 29-1-2....
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....ndard deduction available is as under : in the case of an assessee whose income from salary, before allowing a deduction under this clause : (a) does not exceed one lakh fifty thousand rupees, a deduction of a sum equal to thirty-three and one-third per cent of the salary or thirty thousand rupees, whichever is less : (b) exceeds one lakh fifty thousand rupees but does not exceed three lakh rupees, a deduction of a sum of twenty five thousand rupees. (c) exceeds three lakh rupees but does not exceed five lakh rupees, a deduction of a sum of twenty thousand rupees; No standard deduction is available to an assessee whose income from salary exceeds 5 lakh rupees. Explanation.For the purposes of this clause, 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. 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....
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....re : (a) 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. (b) 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. (3) Under section 80DD an assessee, who is a resident in India being an individual or a Hindu Undivided Family has during the previous year (a) incurred any expenditure for the medical treatment (including Nursing), training and rehabilitation of a handicapped dependent; or (b) paid or deposited any amount under a Scheme framed in this behalf by the Life Insurance....
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....pees in respect of that previous year in which such expenditure was actually incurred. However, if the assessee or his dependent relative or any member of the Hindu Undivided Family of the assessee, is a senior citizen, deduction of a sum of Rs. 60,000 shall be allowed in respect of that previous year in which such expenditure was actually incurred. Such deduction shall be reduced by the amount received, if any, under an insurance from an insurer on the medical treatment of the person referred to above. The listed diseases as per the relevant Rule 11DD are specified neurological diseases, and 40% and above disability caused by cancer, full-blown AIDS, Chronic Renal Failure, Nemophiha and Thalassaemia : Provided that no such deduction shall be allowed unless the assessee furnishes a certificate in such form and from such authority as may be prescribed. The form is Form 10-1, and the prescribed authority is any doctor registered with the Indian Medical Association and holding Post-graduate qualifications. For the purposes of this section, dependant means a person who is not dependant for his support or maintenance on any person other than the assessee. (5) Under section 80E ....
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....on due verification may allow donations to the following bodies to the extent of 50% of the contribution : i. Jawaharlal Nehru Memorial Fund. ii. The Prime Ministers Drought Relief Fund. iii. The National Childrens Fund. iv. The Indira Gandhi Memorial Trust. v. The Rajiv Gandhi Foundation. and to the following bodies to the extent of 100% of the contribution : i. National Defence Fund or The Prime Ministers National Relief Fund. ii. The Prime Ministers Armenia Earthquake Relief Fund. iii. The Africa (Public Contributions-India) Fund. iv. The National Foundation for Communal Harmony. v. Chief Ministers Earthquake Relief Fund, Maharashtra. vi. National Blood Transfusion Council. vii. State Blood Transfusion Council. viii. Army Central Welfare Fund. ix. Indian Naval Benevolent Fund. x. Air Force Central Welfare Fund. xi. The Andhra Pradesh Chief Ministers Cyclone Relief Fund - 1996. xii.&....
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....on of evidence of actual payment of rent. (8) Section 80L of the Income-tax Act allows deduction of interest from certain specified investments including interest on bank deposits and certain securities. The limit of Rs. 12,000 deductible on account of such interest hitherto available has been now reduced to Rs. 9,000. The deduction of Rs. 3,000 for Government Securities separately available shall, however, continue to be available. (9) Section 80U allows deduction of forty thousand rupees in computing the total income of a resident individual, who at the end of the previous year, is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability, or mental retardation, specified in rule 11D of the Income-tax Rules, 1962, which is certified by a physician, surgeon, occulist or psychiatrist as the case may be, working in a Government hospital and which has the effect of reducing considerably such individuals capacity for normal work or engaging in a gainful employment or occupation. The expression Government hospital will include a departmental dispensary or a hospital maintained by a local authori....
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....al Gazette, specify in this behalf. Interest on NSC (VI Issue) and NSC (VIII Issue) which is deemed investment also qualifies for the rebate. (7) 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. (8) 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; (9) Any subscription not exceeding rupees ten thousand, made to any units of any Mutual Fund, notified under clause (23D) of section 10, by the Unit Trust of India established under the Unit Trust of India Act, 1963, under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf; (10) Any contribution made by an individual to any pension fund set up by any Mutual Fund notified under clau....
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....l 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 which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out. Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Income-tax Act will also not be included in payments towards the cost of purchase or construction of a house property. Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he received back, by way of refund or otherwise, any sum specified in section 88(2)(xv), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deduction of income-tax so allowed in the earlier years shall be added to the tax on the total income of the as....
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.... purposes of this clause - eligible issue of capital means an issue referred to in clause (i) of Explanation to clause (xvi) in sub-section (2) of section 88. (16) Subject to the limits mentioned for the various items, the entitlement to tax rebate will be calculated at the rate of 20% of the total amount of the aforesaid savings etc., in the case of individuals, and at the rate of 25% in the case of an author or playwright or artist or musician or actor or sportsman (including an athlete) whose income derived from the exercise of his profession as such author/playwright/artist/musician/actor/sportsman/athlete constitutes twenty-five per cent or more of his total income. The maximum tax-rebate allowable will be Rs. 16,000 generally, and Rs. 17,500 in the case of authors, playwrights, artists, musicians, actors, sportsmen and athletes. There will, therefore, be an overall limit for savings which will qualify for tax-rebate. In the case of individuals, the limit on investments made as above, excluding that mentioned in paras 14 & 15, will be Rs. 60,000 and in the case of authors, sportsmen etc. Rs. 70,000. Further, in the case of a taxpayer having a gross salary of upto Rs. ....
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....ot exceed the figure of (b) and if it exceeds, it should be restricted to that amount. This will be the amount of income under the head Salaries on which income-tax would be required to be deducted. This income should be rounded off to the nearest multiple of ten rupees. 7.2 Income-tax on the estimated income from salary as shown in para 7.1 shall be calculated at the rates given in para 2. 7.3 The amount of tax rebates computed under para 6 shall be deducted from the income-tax calculated according to para 7.2. However, it is to be ensured that the tax rebates given as per para 6 is limited to the income-tax calculated as per para 7.2. Further, tax payable so arrived at shall be increased by surcharge at the rate of two per cent to arrive at the total tax payable. 7.4 It is also to be noted that deductions under Chapter VIA of the Act as mentioned in para 5.4 and the tax rebates as mentioned in para 6 are allowed only if the investments or the payments have been made out of the income chargeable to tax during the financial year 2001-2002. 7.5 The amount of tax as arrived at para 7.3 should be deducted every month in equal instalments. The net amount of tax deductible s....
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....0 1,50,960 For Assessment year 2002-03 Example 2 Calculation of Income-tax in the case of assessee having handicapped dependent. Particulars (Rupees) 1. Gross Salary 3,20,000 2. Amount spent on treatment of dependent who is handicapped 7,000 3. Amount paid to LIC with regard to annuity for the maintenance of handicapped dependent 40,000 4. G.P.F. contribution 25,000 5. LIP paid 10,000 Computation of tax 1. Gross Salary 3,20,000 2. Less Standard deduction 20,000 3,00,000 (Less: Deduction u/s 80DD(1) 40,000 (Restricted to Rs. 40,000 only) Taxable Income 2,60,000 Income-tax thereon 52,000 Rebate u/s 88 GPF 25,000 LIP 10,000 Total 35,....
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....nbsp; For Assessment year 2002-03 Example - 4 Illustrating 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 Time Deposit 2,400 9. Contribution to Mutual Fund 12,000 Computation of total income and tax payable thereon 1. Salary + D.A. + C.C.A. 94,380 House rent allowance 9,600 2. Total Salary Income 1,03,980 3. Less: House Rent allowance exempt u/s 10(13A) : Least of (a) Actual amount of HRA received = 9,600 (b) Expenditure of rent in excess of 10% of salary ....
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.... 24,000 11. Contribution to infrastructure bonds u/s 88 (xvi) 15,000 Computation of total income and tax payable thereon 1. Salary 1,08,000 2. Bonus 12,000 3. Total Salary for valuation of perquisite @ 10,000 p.m. 1,20,000 4. Valuation of perquisites: (a) Perquisite for flat Less of (10% of salary for ten months) = Rs. 10,000 actual rent paid = Rs. 65,000) 10,000 (b) Perquisite for hotel Less of (24% of salary of 2 months = Rs. 4,800, actual payment = Rs. 30,000) 4,800 (c) Perquisite for furniture @ 10% 5,000 Less: Rent recovered from employee 5,000 (d) Add perquisite of free gas, electricity, water 6,000 (e) Add perquisite for car expenses reimbursement (40,200 12(1600 + 600) 13,800 Gross total Income 1,54,600 Less Standard deduction u/s 16(i) ....
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....sp; Total Salary Income 1,59,800 Less: Standard deduction 25,000 Total Taxable Income 1,34,800 Tax on total income 15,960 Tax rebate u/s 88 (i) Provident Fund 20,000 (ii) LIP 10,000 (iii) NSC VIII Issue 20,000 (iv) Repayment of HBA 12,000 (v) Subscription to eligible issue of capital of a Co. approved u/s 88(xvi) 5,000 (vi) Subscription of units of mutual fund (u/s 88(xvii) 15,000 82,000 limited to 80,000 @20% 15,960 (restricted) Net Tax Payable Nil For Assessment year 2002-03 Example 7 Income-tax calculation in the case of an employee who claims loss u....
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.... Taxable Income and Tax thereon 1. Salary Income 4,00,000 Gross Salary Less: Standard deduction 20,000 Taxable Salary 3,80,000 2. Income from House Property Annual value Nil Interest payable on loan u/s 24 2,00,000 Loss from House property (maximum allowable for loans taken before 1-4-1999) 30,000 Gross total income 3,50,000 Less : Deduction u/s 80G 50% of Rs. 5,000 2,500 Net Taxable Income 3,47,500 Tax thereon 78,250 Less: Rebate u/s 88 G.P.F. 20,000 N.S.C. 10,000 ....
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.... (in case of loss, enclose computation thereof) (ii) Profits and gains of business or profession .................................. (iii) Capital gains .................................. (iv) Income from other sources .................................. (a) Dividends (b) Interest (c) Other incomes (specify) Total ................................. . 5. Aggregate of sub-items (i) to (iv) of item 4 6. Tax deducted at source (enclose certificates) issued under section 203 Place : .................................. Date : .................................. . ......................................................... Signature of the employee Verification I, ..................................., do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today, the...................day of..............2001. Place : .................................. Date : .................................. . ...........