TaxTMI 
TaxTMI 
Deduction of tax at source-Income-tax deduction from salaries during 1976-77
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....-tax deduction from salaries during 1976-77. I am directed to invite a reference to this Ministry's Circular No.161* See [1975] 101 ITR (St.) 130. (F.No.275/12/75-ITJ) dated the 22nd March, 1975 and 176 See [1975] 101 ITR (St.) 130 (F.No. 275/12/75-ITJ) dated 16th August, 1975, on the subject of deduction of income-tax from salaries paid during the year 1975-76. The Finance Bill introduced in Parliament on the 15th March, 1976, inter alia, prescribes the rates at which income-tax has to be deducted during the financial year 1976-77 from income chargeable under the head "Salaries". These rates will be applicable to deduction of tax from the salaries paid or payable on or after th....
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....hich it is so credited but so much of the amount as is repaid to him shall be liable to be included in his total income of the previous year in which it is repaid as already explained in this Ministry's Circular No. 182 See [1975] 101 ITR (St) (F.No.275/12/75-ITJ) dated 28-10-1975. The amount repaid will include an element of interest also. While the repayment of principal sum will be regarded as salary paid during the relevant financial year and assessed to tax accordingly, the interest element will qualify for exemption under section 80L of the Income-tax Act, 1961. (iv) The amount of deposit made by a tax payer under the Compulsory Deposit Scheme (Income-tax payers) Act, 1974, is not allowable as deduction in computing his taxable inc....
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....derived from employment during that 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 resid....
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....hildren, brother or sister. The deduction is admissible only in the case of Indian citizens whose "gross total income" does not exceed Rs.12,000. Where the said dependant of the taxpayer is studying for a degree or post-graduate course in medicine (including surgery and obstetrics), architecture, engineering, technology or business management, a deduction of Rs.1,000 and where the dependant is studying for a diploma course in these subjects or for any other degree or post-graduate course, a deduction of Rs.500 for each dependant is to be allowed. In cases where the taxpayer has incurred expenditure on the education of more than two dependants, the deduction under the proposed provision will be allowed at the above rates with reference to tw....
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.... rule 2A, qualifies for exemption from income-tax. Thus, House Rent Allowance granted to a 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 from the taxable income of the employee. (ix) No deduction should be made from the salary income in respect of any donations for charitable purposes. The tax relief on such donations admissible under section 80G of the Income-tax Act will have to be claimed by the taxpayer separately at the time of the finalisation of the assessment. However, in cases where contributions to the National Defenc....