TaxTMI 
TaxTMI 
Deduction of tax at source — Income–Tax deduction from salaries under section 192 of the income–tax act, 1961 - during the financial year 2007-2008
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....d Salaries for the financial year 2007-08 (i.e., assessment year 2008-09) at the following rates: Rates of income-tax A. Normal Rates of tax : 1. Where the total income does not exceed Rs. 1,10,000. Nil 2. Where the total income exceeds Rs. 1,10,000 but does not exceed Rs. 1,50,000. 10 per cent of the amount by which the total income exceeds Rs. 1,10,000 3. Where the total income exceeds Rs. 1,50,000 but does not exceed Rs. 2,50,000. Rs. 4,000 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. 24,000 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 at any time during the financial year : 1. Where the total income does not exceed Rs. 1,45,000. Nil 2. Where the total income exceeds Rs. 1,45,000 but does not exceed Rs. 1,50,000. 10 per cent of the amount by which the total income exceeds Rs. 1,45,000 3. Where the total income exceeds Rs. 1,50,000 but does not exceed Rs. 2,50,000. Rs. 500 plus 20 per cent of....
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....owever, be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 1,10,000 or Rs. 1,45,000 or Rs. 1,95,000, as the case may be, depending upon the age and gender of the employee. (Some typical examples of computation of tax are given at Annexure-I). 3.2 Payment of Tax on Non-monetary Perquisites by Employer - An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at his option, make payment of the tax on such perquisites 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. 3.3 Computation of Average Income-tax - 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 employe....
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....shed or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be University for the purposes of the Act. 3.6 Form 12C has been omitted by the IT (24th Amendment) Rules, 2003 w.e.f. 1-10-2003 - (i) Sub-section (2B) of section 192 enables a taxpayer to furnish particulars of income under any head other than Salaries and of any tax deducted at source thereon. Form No. 12C, which was earlier prescribed for furnishing such particulars (Annexure-II) , has since been omitted from the Income-tax Rules. However, the particulars may now be furnished in a simple statement, which is properly verified by the taxpayer in the same manner as was required to be done in Form No. 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 deducti....
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....ing the amount of interest payable by such employee for the purpose of construction or acquisition of the residential house or for conversion of a part or whole of the capital borrowed, which remains to be repaid as a new loan. (ii) The essential conditions for availing higher deduction of interest of Rs. 1,50,000 in respect of a self-occupied residential house are that the amount of capital must have been borrowed on or after 1-4-1999 and the acquisition or construction of residential house must have been completed within three years from the end of the financial year in which capital was borrowed. There is no stipulation regarding the date of commencement of construction. Consequently, the construction of the residential house could have commenced before 1-4-1999 but, 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 1-4-1999. The loan....
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....the absence of such a certificate furnished by the employee, the employer should deduct income-tax on the salary payable at the normal rates: (Circular No. 147, dated 28-10-1974). 4.4 Deposit of Tax Deducted : According to the provisions of section 200, any person deducting any sum in accordance with the provisions of section 192 or paying tax on non-monetary perquisites on behalf of the employee under section 192(1A), shall pay the sum so deducted or tax so calculated on the said non-monetary perquisites, as the case may be, to the credit of the Central Government in prescribed manner (vide Rule 30 of the Income-tax Rules, 1962). In the case of deductions made by, or, on behalf of the Government, the payment has to be made on the day of the tax-deduction itself. In other cases, the payment has to be made within one week from the last day of month in which deduction is made. 4.5 Penalty for Failure to Deposit Tax Deducted : 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 t....
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....on relating to the nature and value of perquisites is to be provided by the employer in Form No. 12BA in case of salary above Rs. 1,50,000. In other cases, the information would have to be provided by the employer in Form No. 16 itself. In either case, Form No. 16 with Form No. 12BA or Form No. 16 by itself will have to be furnished within a period of one month from the end of relevant financial year. An employer, who has paid the tax on perquisites on behalf of the employee as per the provisions discussed in paras 3.2 and 3.3, shall furnish to the employee concerned a certificate to the effect that tax has been paid to the Central Government and specify the amount so paid, the rate at which tax has been paid and certain other particulars in the amended Form No. 16. The obligation cast on the employer under section 192(2C) for furnishing a statement showing the value of perquisites provided 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 there-under. Any false information, fabricated documentation or suppression of requisite information will entail consequences therefor provid....
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....ion Account No. (TAN) in the challans, TDS- certificates, statements and other documents. Detailed instructions in this regard are available in this Departments Circular No. 497 [F.No. 275/118/87-IT(B), dated 9-10-1987]. If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of ten thousand rupees. Similarly, as per section 139A(5B), it is obligatory for persons deducting tax at source to quote PAN of the persons from whose income-tax 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 200(3) of the Income-tax Act, 1961. 4.9 All tax deductors/collectors are required to file the TDS returns in Form No. 24Q (for tax deducted from salaries). As the requirement of filing TDS/TCS certificates has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted. It has, therefore, been decided that TDS returns for salaries, i.e., Form No. 24Q with less than 90 per cent of PAN data will not be accepted for the quarter ending on 30-....
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....ductor 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 wilfully intimating a false PAN. For and from the quarter ending 30-9-2007, filing of TDS returns in electronic form is also mandatory for deductors required to get their accounts audited under section 44AB of the Income-tax Act in the immediately preceding financial year or where the number of deductees records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty. TDS returns in paper form will no longer be accepted from such tax deductors. 4.11 A return filed on the prescribed computer readable media shall be deemed to be a return for the pur....
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....een 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. 4.16 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. 285, dated 21-10-1980. 4.17 In respect of non-residents, the salary paid for services rendered in India shall be regarded as income earned in India. It has been specifically provided in the Act that any salary payable for rest period or leave period which is both preceded or succeeded by service in India and forms part of the service contract of employment will also be regarded as income earned in India. 5. Estimation of income under the head Salaries 5.1 Income chargeable under the head Salaries : (1) The following income shall be chargeable to income-tax under the head Salaries : (a) any salary due from an employer or a former....
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....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), exclusive of the value of all benefits and amenities not provided by way of monetary payment, exceeds Rs. 50,000. The valuation of such benefits and amenities have been prescribed in Explanation 1 to 4 below 17(2)(ii) of the Income-tax Act, 1961. It is further provided that profits in lieu of salary shall include amounts received in lump sum or otherwise, prior to employment or after cessation o....
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....n 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. 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 paymen....
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....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. 1,000 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 balance method. For valuing perquisites under this rule, any other method of calculation and adjustment otherwise adopted by the employer shall not be relevant. However, small loans up to Rs. 20,000 in the aggregate are exem....
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....s 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 f....
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....nt 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 1-1-1997. (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) Local Aut....
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.... 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 per cent of the salary due to the employee for the relevant period; or (d) Where such accommodation is situated in any other place, 40 per cent 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 al....
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....nth vide notification S.O. No. 395(E) dated 13-5-1998. (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 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/S9-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 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 or family pension received by any member of the family of such individual. Family for this purpose shall have the meaning assigned to it in section 10(5) o....
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....s. For the purpose of availing exemption on expenditure incurred on medical treatment, 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 holly or mainly dependent on the individual. 5.3 Deductions under section 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. No deduction or account of entertainment allowance is available to non-government employees. 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 Standar....
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....uch deposit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf; (b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, 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 referred to in clause (23D) of section 10 and as notified by the Central Government. [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 ....
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.... the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both. [The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O. No. 37(E), dated 11-1-2007, for the purposes of section 80C(2)(xvi)(a)]. (12) 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 institutions engaged in the business of providing long term finance for....
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....ed that full-time education includes play-school activities, pre-nursery and nursery classes. It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature. (14) Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution. (15) Subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board, if the amount of subscription to such units is subscribed only in eligible issue of Capital of any company. (16) Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes. [The Central Government has since no....
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.... does not exceed ten per cent of his salary in the previous year. Where, in the case of such an employee, the Central Government makes any contribution to his account under such pension scheme, the employee shall be allowed a deduction in the computation of his total income, of the whole of the amount contributed by the Central Government as does not exceed ten per cent of his salary in the previous year. Where any amount standing to the credit of the assesses in his account under such pension scheme, in respect of which a deduction has been allowed as per the provisions discussed above, together with the amount accrued thereon, if any, is receive by the assessee or his nominee, in whole or in part, in any financial year, (a) account of closure or his opting out of such pension scheme; or (b) as pension received from the annuity plan purchase taken on such closure or opting out, the whole of the amount referred to in clause (a) or clause (b) above shall be deemed to be the income of the assessee or his nominee, as the case may be, in the financial year in which such amount is received, and shall accordingly be charged to tax as income of tha....
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....fe Insurance Corporation or any ether 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, the assessee shall be allowed a deduction of a sum of fifty thousand rupees from his gross total income of that year. However, where such dependant is a person with severe disability, an amount of seventy-five thousand rupees shall be allowed as deduction subject to the specified conditions. The deduction under this section shall be allowed only if the following conditions are fulfilled: (i) the scheme referred to in clause (b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made; (ii) the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability. However, if the dependant, b....
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.... authority means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical authority as may, by notification, be specified by the Central Government for certifying autism, cerebral palsy, multiple disabilities, person with disability and severe disability referred to in clauses (a), (c), (h), (j) and (o) 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); (f) person with disability means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or clause (j) 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); (g) person with severe disability means (i) a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) ....
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....cs 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 en such donations as admissible under section 3CG 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) 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 per cent 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 Commun....
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.... 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. However, where such individual is a person with severe disability, a higher deduction of seventy-five thousand rupees shall be allowable. Every individual claiming a deduction under this section shall furnish a copy of the certificate issued by the medical authority in the prescribed, form and manner along with the return of income, in respect of the assessment year for which the deduction is claimed. In cases where the condition of disabilit....
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....nt 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 2006. 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 notice of all Disbursing Officers and Undertakings including those under the control of the Central/State Governments. 7.4 Copies of the Circular are available with the Director of Income-tax (Research, Statistics & Publications and Public Relations), 6th Floor, Mayur Bhavan, Indira Chowk, New Delhi-110 001 and at the following websites : www.finmin.nic.in www.incometaxindia.gov.in....
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.... Rs. 50,000 4. GPF Contribution Rs. 25,000 5. LIP Paid Rs. 10,000 Computation of Tax Gross Salary Rs. 3,20,000 Less: Deduction under section 80DD (Restricted to Rs. 50,000 only) Rs. 50,000 Taxable Income Rs. 2,70,000 Less: Deduction under section 80C: GPF 25,000 LIP 10,000 Total 35,000 35,000 Total Income Rs. 2,35,000 Income-tax thereon/payable Rs. 21,000 Add: Surcharge Nil Education Cess @ 2% 420 Secondary and Higher Education Cess @1% 210 Total Income-tax payable Rs. 21,630 For assessment year 2008-2009 Example 3 Calculation of Income-tax in the case of a male employee where medical treatment expenditure was borne by the employer. Particulars: 1. Gross Salary Rs. 3,00,000 2. Medical Reimbursemen....
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....(b) Expenditure of rent in excess of 10 per cent of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-30,CCC) = 1,14,COO (c) 50 per cent of Salary (Basics + DA) = Rs. 1,50,000 Rs. 1,14,000 Gross Total Income: Rs. 3,12,000 Less: Deduction under section 80C: GPF 36,000 LIC 4,000 Subscription to Infr. Structure Bonds Total: 20,000 Rs. 60,000 Total Income 60,000 Rs. 2,52,000 Tax payable total income Rs. 21,100 Add: Surcharge Nil Education Cess @ 2% 422 Secondary and Higher Education Cess @ 1% 211 Total Income-tax payable Rs. 21,733 Rounded off to Rs. 21,730 For Assessment Year 2008....
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....; LIC : 20,000 Infrastructure Bond : 5,000 Total : 30,000 91,000 Rs. 91,000 Total Income Rs. 6,04,040 Tax Payable Rs. 1,30,212 Add : Surcharge Nil Education Cess @ 2% 2,604 Secondary and Higher Education Cess @ 1% 1,302 Total Income Tax Payable Rs. 1,34,118 Rounded off to Rs. 1,34,120 For assessment year 2008-2009 Example 6 Illustrating Valuation of perquisite and calculation of tax in the case of a female employee of a Private Company posted at Delhi and repaying HouseBuilding loan. Particulars: 1. Salary : Rs. 3,00,000 2. Dearness Allowance : Rs. 1,00,000 3. House Rent Allowance : Rs. 1,80,000 4. Special Duties Allowance : Rs. 12,000 5. Provident Fund : Rs. 60,000 6. LIP : Rs. 10,000 ....
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....bsp; (Loan taken after 1-4-1999) : 1,60,000 4. Donation paid to National Children Fund : 5,000 5. NSC Purchased : 10,000 6. GPF : 30,000 Computation of taxable income and tax thereon 1. Salary Income : Rs. 4,00,000 2. Income from house property Annual value Nil Interest payable on loan U/s 24 1,50,000 (Maximum allowable) : (-)Rs. 1,50,000 Gross total income : Rs. 2,50,000 Less: Deduction U/s 60G 50% of Rs. 5,000 Rs. 2,500 Less Deduction U/s 80C: GPF : 30,000 NSC : 10,000 Housing Loan repaid : 50,000 Total : Rs. 90,000 Total Deductions under Chapter VI....
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.... Nil Secondary and Higher 822 Education Cess @1% Total Income-tax payable 411 Rounded Off to Rs. 12,333 Rs. 42,330 For assessment year 2007-2008 Example - 9 Income Tax calculation in the case of a male pensioner who is more than 65 years : of age. Particulars (Rupees) Service Pension 2,40,000 Infrastructure Bond 30,000 N.S.C. purchased 20,000 Computation of Taxable Income and Tax thereon Income from Salary (Pension) 2,40,000 Less: Deduction under section 80C Infrastructure Bond 30,000 N.S.C. 20,000 Total 50,000 Total Income 1,90,000 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. 1,95,000. ANNEXURE II Form for sending particulars of income under section 192(2B) for the year ending 31st March,........... 1. Name and address of ....
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....sp; ............................ 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........................................ . Place ............................ Date ............................ ............................................................ Signature of the employee ....
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....; (9) Details of tax, (a) Tax deducted from salary of the employee under section 192(1) ........................................ (b) Tax paid by employer on behalf of the employee under section 192(1A) ........................................ (c) Total tax paid ........................................ (d) Date of payment into Government treasury ........................................ Declaration by employer I, ...................... s/o.................... working as ........................ (designation) do hereby declare on behalf of........................ (name of the employer) that the information given above is based on the books of account, documents and other relevant records or information available with us and the details of value of each such perquisite are in accordance with section 17 and rules framed thereunder and that such information is true and correct. Signature of the person responsible for deduction of tax Place......... Full Name....................... Date.......... Designation..................... Annexure-IV FORM NO. 16AA [See third....
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....ection 17(2) (as per Form No. 12BA, wherever applicable) Rs. .... (c) Profits in lieu of salary under section 17(3) (as per Form No. 12BA, wherever applicable) Rs. .... (d) Total Rs. ..... 2. Less : Allowance to the extent exempt under section 10 Rs. ..... Rs. ..... Rs. ..... Rs. ... 3. Balance (1-2) Rs. ...... 4. Deductions under section 16 : (a) Standard deduction Rs. ..... (b) Entertainment allowance Rs. ..... (c) Tax on Employment Rs. ..... 5. Aggregate of 4(a) to (c) Rs. .... 6. Income chargeable under the head Salaries 701 ___ 7. Add : Any other income reported by the employee &nb....
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.... 15. Tax payable on total income (12-14) and surcharge thereon 832 ___ 16. Less : Relief under section 89 (attach details) 837 ___ 17. Balance tax payable (15-16) 841 ___ 18. Less: (a) Tax deducted at source u/s 192(1) 868 ___ (b) Tax paid by the employer on behalf of the employee u/s 192(1A) on perquisites u/s 17(2) 872 ___ 19. Tax payable/refundable (17-18) 891 ___ Details of tax deducted and deposited into Central Government account Amount Date of payment Name of bank and branch where tax deposited I, ......................., son of Shri ..................... working in the capacity of ............. (designation) do hereby certify that a sum of rupees ............. (in words) has been deducted at source and paid to the credit of the Central Government. I further certify that the inform....
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........................................ . Receipt No. ..................... Date ........................... SEAL Signature of the assessee Signature of the receiving official Date .................. ................................................... Place .................. Annexure-V Notification No. 205/2003 [F.No. 142/31/2003 TPL], dated 26-8-2003 Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003 In exercise of the powers conferred by sub-section (2) of section 206 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby specifies the following Scheme for electronic filing of return of tax deducted at source, namely : Short title, commencement and application 1. (1) The Scheme may be called the Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003. (2) It shall come into force on the date of its publication in the Official Gazette. (3) It shall be applicable to all persons filing returns of tax deducted at source on computer media under sub-section (2) of section 206 of the Income-tax Act, 1961. Definitions....
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....the return pertains, the Form Number of the return and the volume number of the said media in case more than one volume of such media is used. (6) Separate computer media shall be used for each Form of e-TDS Return by the e-deductor. Furnishing of e-TDS Return 4. (1) The e-deductor shall furnish e-TDS Return on computer media to the e-TDS Intermediary duly supported by a declaration in Form No. 27A, as prescribed in the Rules, in paper format : Provided that in case any compression software has been used by the e-deductor for preparing the e-TDS Return, he shall also furnish such compression software along with the e-TDS Return on the same computer media. (2) In case the e-deductor has on-line connectivity with the server of the e-TDS Intermediary, as may be designated by e-filing Administrator for this purpose, he may transmit the electronic data of the e-TDS Return directly to such server and send Form No. 27A on paper format separately to the e-TDS Intermediary. Procedure to be followed by e-TDS intermediary 5. (1) The e-TDS Intermediary shall receive the e-TDS Return from e-deductors along with the declaration in Form No. 27A in paper format. (2) The e-T....
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....cts intimated by the Assessing Officer are rectified within the period of fifteen days or such further period as may be allowed by the Assessing Officer, the date of issue of provisional receipt shall be deemed to be the date of filing of e-TDS Return. General responsibilities of e-TDS Intermediary 6. (1) The e-TDS Intermediary shall ensure accurate transmission of the e-TDS Return to the e-filing Administrator : Provided that the e-TDS Intermediary shall not be responsible for any errors or omissions in the return of tax deducted at source prepared by the e-deductor. (2) The e-TDS Intermediary shall retain for a period of one year from the end of the relevant financial year in which the return is required to be filed, the electronic data of the TDS Return in the format as specified by the e-filing Administrator. (3) The e-TDS Intermediary shall retain for a period of one year from the end of the relevant financial year in which the return is required to be filed, the information relating to deficiency memo and provisional receipts issued in respect of the returns filed through it. (4) The e-TDS Intermediary shall ensure confidentiality of information that comes t....
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....individual may also have a voluntary tier-II withdrawable account at his option. This option is given as GPF will be withdrawn for new recruits in Central Government service. The Government will make no contribution into this account. These assets would be managed through exactly the above procedures. However, the employee would be free to withdraw part or all of the second tier of his money any time. This withdrawable account does not constitute pension investment, and would attract no special tax treatment. (iii) Individuals can normally exit at or after age 60 years for tier-I of the pension system. At the exit the individual would be mandatorily required to invest 40 per cent of pension wealth to purchase an annuity (from an IRDA- regulated life insurance company). In case of Government employees the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. The individual would received a lump sum of the remaining pension wealth, which he would be free to utilize in any manner. Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, the manda....