TaxTMI 
TaxTMI 
Instructions for deduction of tax at source from salary during financial year 1975-76 at the rates specified in Part III of First Schedule to Finance Bill, 1975 and Finance (Amendment) Act, 1975
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....during the financial year 1975-76 from income chargeable under the head "Salaries". These rates will be applicable to deduction of tax from salaries paid or payable on or after April 1, 1975. An extract of Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the Finance bill, 1975, insofar as it relates to levy of income-tax on "salaries" is enclosed [Annex 1]1. It is requested that pending the passing of the Finance Bill, 1975, deduction of tax from "salaries" may be made during the financial year 1975-76 accord­ing to the rates in the said Schedule. Three typical examples of calculations are given in Annex II. 2. The substance of the main provisions in the law insofar as they relate to income from "salaries" on which tax is to be deducted at source during the financial year 1975-76 is given hereunder : (1) No tax will be deductible at source in any case unless the estimated salary income for the financial year exceeds Rs. 6,000. (2) The Income-tax (Amendment) Rules, 1974 and the Income-tax (Third Amendment) Rules, 1974 notified by the Central Board of Direct Taxes on February 28, 1974 and September 21, 1974 respec­tively have made certain modificat....
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....his deduction will, however, not be admissible in the case of retired pensioners who have not been in employment at any time during the financial year 1975-76. In the case of persons who retire from service in the course of the financial year 1975-76, the standard deduction will be calcu­lated only with reference to the salary derived from employment during the financial year without taking into account the pension received by the employee. Further, the standard deduction will be limited to Rs. 1,000 only in cases (a) where the employee is in receipt of a conveyance allowance, or (b) where he is provided with any motor car, motor cycle, scooter or other moped by his employer (for use otherwise than wholly or exclusively in the performance of his duties) or where he is allowed the use of any one or more motor cars (otherwise than wholly or exclusively in the performance of his duties) out of a pool of motor cars owned or hired by the employer. In this connection, it may be noted that the use of a motor car by the employees for the purposes of going from his residence to the place where the duties of employ­ment are to be performed or from such place back to his residence wil....
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....hild(ren) wholly or mainly dependent on him and also declaring the nature of the course for which the child or children are studying. (8) In pursuance of the recommendation made by the Third Pay Commission the ceiling limit in respect of house rent allowance payable to Government employees has been raised from Rs. 300 p.m. to Rs. 400 p.m. As a logical corollary to this, the ceiling limit of Rs. 300 p.m. laid down in section 10(13A) for exemption of house rent allowance from income-tax is proposed to be raised to Rs. 400 p.m. by the Finance Bill, 1975. The proposed amendment will take effect from 1-4-1975 and will accordingly apply in relation to the assessment year 1975-76 and subsequent years. (9) The Finance Bill, 1975 seeks to make retrospective amendment in section 10(14) with effect from April 1, 1962 (the date from which the Act came into force) to clarify that any allowance [other than house rent allowance which is exempt from income-tax under section 10(13A) granted to a person to meet his personal expenses at the place where the duties are ordinarily performed or at the place where he ordinarily resides will not be regarded, for the purpose of section 10(14) a specia....
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....-ITJ], dated 22-3-1975. CLARIFICATION 2 Attention is invited to para 2(7) of this Ministry's Circular No. 161, dated 22-3-1975 [Clarification 1] relating to tax relief in regard to expenditure incurred on higher education of dependent children. The Finance Act, 1975 (as finally enacted) has extended the scope of this benefit. Deduction under section 80FF will be available not only in respect of expenditure incurred on the higher education of dependent children but also in respect of such expenditure incurred on any brother or sister of the assessee wholly or mainly dependent on him and extends to a course in business management in addition to that in medicine, architecture, engineering and technology. Further to what has been indicated in para 2(7) of this Ministry's Circular No. 161, dated 23-3-1975, an assessee will be entitled to the higher deduction of Rs. 1,000 in respect of a dependent studyi....
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....ed 28-10-1975. CLARIFICATION 4 1. Attention is invited to paragraph 1 of Circular No. 161, dated 22-3-1975 [Clarification 1] enclosing an extract of Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the Finance Bill, 1975 giving the rates for deduction of income-tax from salaries during the financial year 1975-76. 2. The Finance (Amendment) Act, 1975, which received the assent of the President on July 31, 1975, has, inter alia, replaced Paragraph A of Part III of the First Schedule to the Finance Act, 1975. Under the new rate schedule, the rate of income-tax on the first slab of income up to Rs. 8,000 (as against Rs. 6,000 previ­ously) has been fixed at nil and the rate on the new slab of Rs. 8,001—15,000 at 17 per cent. The rates of tax on the slabs of income beyond Rs. 15,000 remain unchanged. An extract of the new Sub-Paragraph I of Paragraph A of Part III of the First....
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....; total income exceeds Rs. 25,000 but does not exceed Rs. 30,000 Rs. 3,690 plus 40 per cent of the amount by which the total income exceeds Rs. 25,000; (6) where the total income exceeds Rs. 30,000 but does not exceed Rs. 50,000 Rs. 5,690 plus 50 per cent of the amount by which the total income exceeds Rs. 30,000; (7) where the total income exceeds Rs. 50,000 but does not exceed Rs. 70,000 Rs. 15,690 plus 60 per cent of the amount by which the total income exceeds Rs. 50,000; (8) where the total income exceeds Rs. 70,000 Rs. 27,690 plus 70 per cent of the amount by which the total income exceeds Rs. 70,000; Surcharge on income-tax The amount of income-tax computed in accordance with the preced­ing provisions of this Sub-paragraph shall be increased b....