TaxTMI 
TaxTMI 
TaxTMI 
INCOME-TAX DEDUCTION FROM SALARIES UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961 DURING THE FINANCIAL YEAR 2009-2010
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Examples 45-51 II. Board's Notification dated 4.10.2002 {Form No. 12BA (as amended)} 52-53 III. Board's Notification dated 12.1.2004 (Form No. 16AA) 54-58 IV. Board's Notification dated 26.8.2003 59-61 IVA. Deptt. of Eco. Affairs Notification dated 22.12.2003 62 VA. Board's Notification dated 24.11.2000 63 VB. Board's Notification dated 29.1.2001 64 VII. Form No. 10 B A 65 CIRCULAR NO.: 1/2010 F.No. 275/192/2009-IT (B) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ..... New Delhi, dated the 11th January,2010 SUBJECT:INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2009-2010 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961. ............... Reference is invited to Circular No.08/2007 dated 5.12.2007 whereby the rates of deduction of income-tax from the payment of income under the head "Salaries" under Section 192 of the Income-tax Act, 196....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... exceeds .Rs.2,40,000/- 3. Where the total income exceeds Rs.6,000/-plus Rs.3,00,000/-but does not exceed Rs.5,00,000/-. 20 per cent of the amount by which the total income exceeds Rs.3,00,000/-. 2. 4. Where the total income exceeds Rs.46,000/-plus Rs.5,00,000/-. 30 per cent of the amount By which the total income exceeds Rs.5,00,000/-. Surcharge on Income tax: There will be no surcharge on income tax payments by individual taxpayers during FY 2009-10 (AY 2010-11). Education Cess on Income tax: The amount of income-tax shall be further increased by an additional surcharge (Education Cess on Income Tax) at the rate of two percent of the income-tax. Additional surcharge on Income Tax (Secondary and Higher Education Cess on Income-tax): From Financial Year 2007-08 onwards, an additional surcharge is chargeable at the rate of one percent of income-tax (not including the Education Cess on income tax). Education Cess, and Secondary and Higher Education Cess are payable by both resident and non-resident assessees. 3. SECTION 192 OF THE INCOME-TAX ACT,1961: BROAD SCHEME OF TAX DEDUCTION AT SOURCE FROM "SALARIES". Method of Tax Cal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the employee. Salary From More Than One Employer: 3.4 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 tax payer 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 "Salaries" due or received from the former/other employer and also tax deducted at source there from, in writing and duly verified by him and by the former/other employer. The present/ chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer). Relief When Salary Paid in Arrear or Advance: 3.5 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-section (1) of Section 89, he may furnish to the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 any loss (negative income) only under the head "income from House Property" and no other head for working out the amount of total tax to be deducted. While taking into account the loss from House Property, the DDO shall ensure that the assessee files the declaration referred to above and encloses therewith a computation of such loss from House Property. (iii) Sub-section (2C) lays down that a person responsible for paying any income chargeable under the head "salaries" shall furnish to the 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 form no. 12BA. (Annexure-II). Form no. 12BA alongwith form no. 16, as issued by the employer, are required to be produced on demand before the Assessing Officer in terms of Section 139C of the Income Tax Act. Conditions....
X X X X Extracts X X X X
X X X X Extracts X X X X
....deduction of interest on borrowed capital will not exceed Rs.1,50,000/- in a year. Adjustment for Excess or Shortfall of Deduction: 3.8 The provisions of sub-section (3) 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 for that employee within that financial year itself. TDS on Payment of Balance Under Provident Fund and Superannuation Fund: 3.9 The trustees of a Recognized Provident Fund, or any person authorized 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 there from the deduction specified in rule 10 of Part A of the Fourth Schedule. 3.10 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. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y simple interest at one percent for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which the tax is actually paid. Such interest, if chargeable, has to be paid before furnishing of quarterly statement of TDS for each quarter. Section 271C lays down that if any person fails to deduct tax at source, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted by him. Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time the tax deducted at source by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along with fine. Furnishing of Certificate for Tax Deducted: 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 re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e month from the close of the financial year i.e. by April 30 of every year. If he fails to issue these certificates to the person concerned, as required by section 203, he will 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. Option to issue TDS Certificates by way of digital signatures: 4.7 Since the requirement of annexing the TDS certificates with the return of income has been dispensed with, the TDS certificates will be now issued only for the purpose of personal record of the deductees subject to the condition that they may be required to produce the same on demand before the Assessing Officer in terms of section 139C, inserted by the Finance Act, 2007. The TDS claim made in the return of income is also required to be matched with the e-TDS returns furnished by the deductors. Assessing Officers may, if considered necessary, also write to the deductors for verification of the correctness of the taxes deducted or other particulars mentioned in the certificate. It has been decided for the proper administration of this Income-tax Act to allow the deductors, at their option, in respect of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d all penal consequences under the Income Tax Act will follow. Taxpayers liable to TDS are also advised to furnish their correct PAN with their deductors, failing which they will also face penal proceedings under the Income Tax Act. Quarterly Statement of TDS: 4.10. The person deducting the tax (employer in case of salary income), is required to file Quarterly Statements of TDS for the periods ending on 30th June, 30th September, 31st December and 31st March of each financial year, duly verified, to the Director General of Income Tax (Systems) or M/s National Securities Depository Ltd (NSDL). These statements are required to be filed on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the 15th June following the last quarter of the financial year. The requirement of filing an annual return of TDS has been done away with w.e.f. 1.4.2006. The quarterly statement for the last quarter filed in Form 24Q (as amended by Notification No. S.O. 704(E) dated 12.5.2006) shall be treated as the annual return of TDS. It is now mandatory for all offices of the Government, companies, deductors who are requi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also be ensured that the right type of challan is used. The relevant challan for making payment of tax deducted at source from salaries is challan no. ITNS-281. Wherever the amount of tax deducted at source is credited to the Central Government through book adjustment, care should be taken to ensure that the correct amount of income-tax is reflected therein. TDS on Income from Pension: 4.13. In the case of pensioners who receive their pension from a nationalized bank, the instructions contained in this circular shall apply in the same manner as they apply to salary-income. The deductions from the amount of pension under section 80C on account of contribution to Life Insurance, Provident Fund, NSC etc., if the pensioners furnish the relevant details to the banks, may be allowed. Necessary instructions in this regard were issued by the Reserve Bank of India to the State Bank of India and other nationalized Banks vide RBI's Pension Circular (Central Series) No.7/C.D.R./1992 (Ref. CO: DGBA: GA (NBS) No.60/GA.64 (11CVL)-/92) dated the 27th April, 1992, and, these instructions should be followed by all the branches of the Banks, which have been entrusted with the task of payment o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1. 5. ESTIMATION OF INCOME UNDER THE HEAD "SALARIES" 2. 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 employer to an assessee in the previous year, whether paid or not; (b) any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him. (c) any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year. (2) For the removal of doubts, it is clarified that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due. Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as "Salary". Definition of Salary: (3)"Salary" includes wages, fees, commissions, perquisites, profits in lieu of, or, in addition to sal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1) it is further clarified that the value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate to the assessee, shall be constituted as perquisites in the hand of employees. Explanation.-For the purposes of this sub-clause,- (a) "specified security" means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and, where employees' stock option has been granted under any plan or scheme therefore, includes the securities offered under such plan or scheme; (b) "sweat equity shares" means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called; (c) the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....paid by the employee himself. "Accommodation" includes a house, flat, farm house, hotel accommodation, motel, service apartment guest house, a caravan, mobile home, ship etc. However, the value of any accommodation provided to an employee working at a mining site or an on- shore oil exploration site or a project execution site or a dam site or a power generation site or an off-shore site will not be treated as a perquisite. However, such accommodation should either be located in a "remote area" or where it is not located in a "remote area", the accommodation should be of a temporary nature having plinth area of not more than 800 square feet and should not be located within 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% of the annual salary or the actual charges paid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. IV Free or concessional education: Perquisite on account of 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 is 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 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.1000/-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,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hite goods) like washing machines, microwave ovens, mixers, hot plates, ovens etc. Similarly, in case of cars, the value of perquisite shall be worked out by reducing 20% of its actual cost by the reducing balance method for each completed year of use. VIII Medical Reimbursement by the employer exceeding RS. 15,000/- p.a. u/s. 17(2)(v) is to be taken as perquisites. It is further clarified that the rule position regarding valuation of perquisites are given at Section 17(2) of Income Tax Act,1961 and at Rule 3 of Income Tax Rules,1962. The deductors may look into the above provisions carefully before they determine the perquisite value for deduction purposes. It is pertinent to mention that benefits specifically exempt u/s 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. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e (10A) of Section 10. As regards payments in commutation of pension received under any scheme of any other employer, exemption will be governed by the provisions of sub-clause (ii) of clause (10A) of section 10. Also, any payment in commutation of pension received from a Regimental Fund or Non-Public Fund established by the Armed Forces of the Union referred to in Section 10(23AAB) is exempt under sub-clause (iii) of clause (10A) of Section 10. (4) Any payment received by an employee of the Central Government or a State Government, as cash-equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement, whether on 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.588(E) dated 31.05.2002 at Rs. 3,00,000/-in relation to such employees who retire, whether on supera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y way of bonus on such policy other than: i) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA or, ii) any sum received under Keyman insurance policy or, iii) any sum received under an insurance policy issued on or after 1.4.2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20 percent of the actual capital sum assured. However, any sum received under such policy on the death of a person would still be exempt. (8) any payment from a Provident Fund to which the Provident Funds Act, 1925 ( 19 of 1925), applies or from any other provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette. (9) Under Section 10(13A) of the Income-tax Act, 1961,any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from income-tax to the extent as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations. According to rule 2A of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n employee either to meet his personal expenses at the place of his posting or at the place he ordinarily resides or to compensate him for the increased cost of living, which may be prescribed and to the extent as may be prescribed. However, the allowance referred to in (ii) above should not be in the nature of a personal allowance granted to the assessee to remunerate or compensate him for performing duties of a special nature relating to his office or employment unless such allowance is related to his place of posting or residence. The CBDT has prescribed guidelines for the purpose of clauses (i) and (ii) of Section 10(14) vide notification No.SO617(E) dated 7th July, 1995 (F.No.142/9/95-TPL)which has been amended vide notification SO No.403(E) dt 24.4.2000 (F.No.142/34/99-TPL). The transport allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of duty is exempt to the extent of Rs.800 per month vide notification S.O.No. 395(E) dated 13.5.98. (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 St....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r their family members (under any scheme approved by the Central Government or Insurance Regulatory and Development Authority); (d) reimbursement, by the employer, of the amount spent by an employee in obtaining medical treatment for himself or any member of his family from any doctor, not exceeding in the aggregate Rs.15,000/-in an year. (e) As regards medical treatment abroad, the actual expenditure on stay and treatment abroad of the employee or any member of his family, or, on stay abroad of one attendant who accompanies the patient, in connection with such treatment, will be excluded from perquisites to the extent permitted by the Reserve Bank of India. It may be noted that the expenditure incurred on travel abroad by the patient/attendant, shall be excluded from perquisites only if the employee's gross total income, as computed before including the said expenditure, does not exceed Rs.2 lakhs. 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, bro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 spouse or children ; [The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E) dated 3.11.05.] (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 subscription:- (a) to any such security of the Central Government or any such 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 contributio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y notification in the Official Gazette, specify in this behalf; (11) Any subscription made to any such deposit scheme, as the Central Government may, by notification in the Official 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, 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 11.01.2007, 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 assessee's own residence, have been chargeable to tax under that head) where such payments are made towards or by way of any instalmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... institution situated in India, for the purpose of full-time education of any two children of the employee. Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified 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 tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the previous year paid or deposited any amount in his account under a pension scheme as notified vide Notification No. F.N. 5/7/2003-ECB&PR dated 22.12.2003, he shall be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited as does not exceed ten per cent of his salary in the previous year. The benefit of new pension scheme has been extended to any other employees (also self employed person) w.r.e.f 1/04/09 and deduction is allowed to employees upto 10% of salary in the previous year and in other cases upto10% of his gross total income in the previous year. Further it has been specified that w.r.e.f 1/04/09 any amount received by the assessee from the new pension scheme shall be deemed not to have received in the previous year if such amount is used for purchasing an annuity plan in the previous year. Where any amount standing to the credit of the assessee 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 received by the assessee or his nominee, in whole or in part, in any financial ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar. The insurance referred to above shall be in accordance with a scheme made in this behalf by- (a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or (b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).] E. 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, the assessee shall be allowed a deduction of a sum of fifty thousand rupees from his gross ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eduction 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) and includes "autism", "cerebral palsy" and "multiple disability" referred to in clauses (a), (c) and (h) 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); (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 (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 Nati....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... (b) "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including 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 any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so; (d) "initial assessment year" means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan. (e) relative", in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian G. Section 80G provides for deductions on account of donation made to various funds, charitable organizations etc. Generally no deduction should be allowed by the D.D.O. from the salary income in respect of any....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tioned 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 one lakh 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 disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority in the prescribed form and manner and a copy thereof is fu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....second installment of arrears to Government employees on account of implementation of Sixth Central Pay Commission's recommendations matter regarding. Under the provisions of Section 192 of the Income-tax Act, an employer is required to deduct tax at source from any payments in the nature of salary, which inter alia also includes any arrear payments. The Implementation Cell of the Department of Expenditure, Govt of India, vide its Office Order dated 30th Aug'08 had stated that 40% of the aggregate arrear (first installment of arrears) would be payable during FY 2008-09. In Circular No. 09/2008 dated 29th Sept.2008 issued from this office it was stated that during 2008-09 the tax has to be deducted at source on this 40% of aggregate arrear during FY 2008-09.The OM,F.No-1//1/2008-IC, of the Implementation Cell of the Department of Expenditure, Govt of India, vide its order dated 25th August, 2009 has stated that the remaining 60% of the aggregate arrear (second installment of arrears) would be paid to the concerned Government servants during FY 2009-10. Such arrangements could be followed by State Governments also. In this regard, all the DDOs and PAOs as the case may be, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bha Secretariat 7. Rajya Sabha Secretariat 8. Cabinet Secretariat 9. Secretary, U.P.S.C., Dholpur House, New Delhi 10. Secretary, Staff Selection Commission, Lodhi Complex, New Delhi 11. Supreme Court of India, New Delhi 12. Election Commission, New Delhi 13. Planning Commission, New Delhi 14. Secretariat of Governors/Lt.Governors of all States/Union Territories 15. All Integrated Financial Advisors to Ministries/Departments of Government of India 16. All Heads of Departments & Offices subordinate to the Department of Revenue CBDT, CBEC etc. 17. Army Headquarters, New Delhi 18. Air Headquarters, New Delhi 19. Naval Headquarters, New Delhi 20. Director-General of Posts & Telegraphs, New Delhi(10 copies) 21. Comptroller & Auditor General of India (50 copies) 22. Accountant General -I, Andhra Pradesh, Hyderabad 23. Accountant General-II, Andhra Pradesh, Hyderabad 24. Accountant General, Assam, Shillong 25. Accountant General-I, Bihar, Ranchi 26. Accountant General-II, Bihar, Patna 27. Accountant General-I, Gujarat, Ahmedabad 28. Accountant General-II, Gujarat, Rajkot 29. Accountant General, Kerala, Trivandrum 30. Accountant General, Madhya Pradesh, Gwalior 31.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dia, Local Head Office:- (i) JeevanDeep Buiulding, 1 Middleton Street, Kolkata. (ii) Circle Top House, Rajai Salai, Chennai-600001. (iii) Lucknowm Uttar Pradesh. (iv) Bank Street, Hyderabad-500001 (v) Hamida Road, Bhopal-462001 (vi) Shop Nos.101 to 105, Sector 17-B, Chandigarh (vii) New Amn.Building, Madam Cama Road, Mumbai-400021 (viii) 9, Parliament Street, New Delhi-110001 (ix) Bhedru, Ahmedabad-380001 (x) Judges Court Road, Post Box No.103, Patna-800001 (xi) 59, Forest Park, Bhubneshwar and Gauhati, Assam (xii) Gauhati, Assam 72. Chief Controller of Accounts, CBDT, Lok Nayak Bhawan, Khan Market, New Delhi 73. State Bank of Patiala, (Head Office), The Mall, Patiala 74. State Bank of Bikaner and Jaipur, Head Office, Tilak Marg, 'C' Scheme Jaipur 75. State Bank of Hyderabad, Head Office, Gun Factory, Hyderabad 76. State Bank of Indore, 5 Yashwant Nivas Road, Indore. 77. State Bank of Mysore (Head Office), K.G.Road, Bangalore 78. State Bank of Saurashtra, Behind Satyanarayan Road, Bhavnagar, Gujarat 79. State Bank of Travancore, Post Box No.34, Trivandrum 80. N.S.Branch, Department of Economic Affairs, New Delhi 81. The Editory, 'The Income-tax Rep....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Gross Salary Rs.3,20,000/- 2. 2. Amount spent on treatment of a dependant, being person with disability( but not severe disability) Rs. 7,000/- 3. 3. Amount paid to LIC with regard to annuity for the maintenance of a dependant, being person with disability( but not severe Rs. 50,000/- disability) 4. 4. GPF Contribution Rs. 25,000/- 5. 5. LIP Paid Rs. 10,000/- Computation of Tax Gross Salary Rs.3,20,000/- Less: Deduction U/s 80DD (Restricted to Rs.50,000/- only) Rs. 50,000/- Taxable Income Rs.2,70,000/- Less: Deduction u/s 80C: GPF 25,000/- LIP 10,000/- Total 35,000/- 35,000/- Total Income Rs. 2,35,000/- Income Tax thereon/payable Rs. 7,500/- Add: Education Cess @2% 150/- Secondary and Higher Education Cess @1% 75/- Total Income Tax payable Rs. 7,725/- Rounded off to Rs. 7,730/- Example 3 For Assessment Year 2010-2011 Calculation of Income Tax in the case of a male employee where medical treatment expenditure was borne by the employer. Particulars: 1. Gro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs.2,91,000/- Tax payable on total income Rs. 10,100/- Add: Education Cess @2% 202/- Secondary and Higher Education Cess @1% 101/- Total Income Tax payable Rs. 10,403/- Rounded off to Rs. 10,400/- Example 5 For Assessment Year 2010-2011 Illustrating valuation of perquisite and calculation of tax in the case of a male employee of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months. 1. Salary: Rs.7,00,000/- 2. Bonus: Rs.1,40,000/- 3. Free gas, electricity, water etc. Rs 40,000 (Actual bills paid by company 4(b) Hotel rent paid by employer (for two months): Rs.1,00,000/- 4(c) Rent recovered from employee : Rs. 60,000/ 4(d) Cost of furniture : Rs.2,00,000/- 5. Subscription to Unit Linked Insurance Plan: Rs. 50,000/- 6. Life Insurance Premium: Rs. 10,000/- 7. Contribution to recognized P.F.: Rs. 42,000/- COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON: 1. Salary: Rs. 7,00,000/- Rs. 7,00,000/- 2. Bonus: Rs. 1,40,000/- Rs. 1,40,000/- Total Salary for Valuation of : Perquisite ie; Rs.70,000 per month Rs. 8,40,000/- Rs. 8,40,000/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Less: Deduction u/s 80C: i. Provident Fund : 60,000 ii. LIP : 10,000 iii. NSC VIII Issue : 30,000 iv. Repayment of HBA: 60,000 v. Tuition Fees (Restricted to two children) : 20,000 Total : 1,80,000 Restricted to 1,00,000/- 1,00,000/- Total Income : 4,12,000/- Tax Payable 33,400/- Add: Education Cess @2% 668/- Secondary and Higher Education Cess @1% 334/- Total Income Tax payable Rs. 34,068/- Rounded off to Rs.34,070/- ANNEXURE-II FORM NO.12BA {See rule 26A(2)(b)} Statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary with value thereof 1) Name and address of employer : 2) TAN 3) TDS Assessment Range of the employer : 4) Name, designation and PAN of employee : 5) Is the employee a director or a person with : substantial interest in the company (where the employer is a company) 6) Income under the head "Salaries" of the employee : (other than from perquisites) 7) Financial Year : 8) Valuation of Perquisites S.No Nature of perquisite (see rule 3) Value of perquisite as pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an individual, resident in India, where- a) his total income includes income chargeable to income-tax under the head 'Salaries'; b) the income from salaries before allowing deductions under section 16 of the Income-tax Act, 1961 does not exceed rupees one lakh fifty thousand; c) his total income does not include income chargeable to income-tax under the head 'Profits and gains of business or profession' or 'Capital gains' or agricultural income; and d) he is not in receipt of any other income from which tax has been deducted at source by any person other than the employer Name and address of the Employer Name and designation of the Employee PAN/GIR NO. TAN PAN/GIR NO. TDS Circle where annual Return Period /statement under section 206 is to be Assessment year filed ................. FROM TO DETAILS OF SALARY PAID AND ANY OTHER INCOME AND TAX DEDUCTED 1. Gross salary (a) Salary as per provisions con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....63 (54 of 1963); (3) "computer media" means a floppy (3 ½ inch and 1.44 MB capacity) or CD-ROM, and includes on-line data transmission of electronic data to a server designated by e-filing Administrator for this purpose; (4) "e-deductor" means the person responsible for deduction of tax at source who is required to furnish e-TDS Return under this scheme; (5) "e-filing Administrator" means an officer not below the rank of Commissioner of Income-tax designated by the Board for the purpose of administration of this scheme; (6) "e-TDS Intermediary" means a person, being a company, authorised by the Board to act as e-TDS Intermediary under this scheme; (7) "e-TDS Return" means a return to be filed under section 206 of the Act duly supported by a declaration in Form No. 27A as prescribed under the Rules; (8) "Rules" means the Income-tax Rules, 1962; (9) All other words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act. 3. Preparation of e-TDS Return. - (1) The e-deductor shall use the relevant Forms prescribed under the Rules for preparing e-TDS Returns. (2) The e-deductor shall prepare his....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rpose of e-TDS Return and check whether the prescribed particulars relating to deposit of the tax deducted at source in bank and the permanent account number of the deductee have been given in the e-TDS Return. (4) On successful completion of the check, the data of e-TDS Return shall be transmitted by the e-TDS Intermediary to the e-filing Administrator together with the declaration in Form No.27A and the provisional receipt issued shall be deemed to be the acknowledgement of the e-TDS Return. (5) Where the details of deposit of tax deducted at source in bank, the permanent account number, tax deduction account number or any other relevant details are not given in the e-TDS Return, the e-filing Administrator shall forward a deficiency memo to the e-deductor with a request to remove the deficiencies within seven days of receipt of the same. (6) In case the deficiency indicated in the deficiency memo is removed within seven days, the data on e-TDS Return shall be transmitted by the e-TDS Intermediary to the e-filing Administrator and the provisional receipt shall be deemed to be acknowledgement of the e-TDS Return. The date of issue of provisional receipt shall be deemed to be the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or. -Without affecting the generality of the foregoing provisions, the e-filing Administrator shall - 8. Powers of the Board: The Board may revoke the authorisation of an e-filing Intermediary on grounds of improper conduct, misrepresentation, unethical practices, fraud or established lack of service to the e-deductors or such other ground as it may deem fit. Notification No.205/2003. (1) specify the procedures, data structures, formats and standards for ensuring secure capture and transmission of data, for the day to day administration of this scheme; (2) ensure compliance by e-TDS Intermediary with the technical requirements of this scheme, including review of the functioning of e-return Intermediary, verification of any complaints, scrutinising advertising material issued by them and such other matters as he deems fit. F. No. 142/31/2003-TPL (Deepika Mittal) Under Secretary to the Government of India ANNEXURE-IV A MINISTRY OF FINANCE (Department of Economic Affairs) (ECB & PR Division) NOTIFICATION ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (iv) It will have a central record keeping and accounting (CRA) infrastructure, several pension fund managers (PFMs) to offer three categories of schemes viz. option A, B and C. (v) The participating entities (PFMs and CRA) would give out easily understood information about past performance, so that the individual would be able to make informed choices about which scheme to choose. 2. The effective date for operationalization of the new pension system shall be form 1st of January, 2004. U.K. SINNHA, Jt. Secy. ANNEXURE-V A MINISTRY OF FINANCE (Department of Revenue) (Central Board of Direct Taxes) Notification New Delhi, the 24th November, 2000 INCOME-TAX S.O.1048 (E) -In exercise of the powers conferred by sub-clause (i) of clause (18) of Section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government, hereby specifies the gallantry awards for the purposes of the said Section, mentioned in column 2 of the table below awarded in the circumstances as mentioned in corresponding column 3 thereof:- Table Sl. No. Name of gallantry award Circumstances for eligibility (1) (2) (3) 1.&....