TaxTMI 
TaxTMI 
Rates of deduction of income-tax from the payment of income chargeable under the head "Salaries" during the financial year 2011-2012 and explains certain related provisions of the Income-tax Act.
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....012 (i.e. Assessment Year 2012-2013) at the following rates: RATES OF INCOME-TAX A. Normal Rates of tax: 1. Where the total income does not exceed Rs. 1,80,000/-. Nil 2. Where the total income exceeds Rs. 1,80,000 but does not exceed Rs. 5,00,000/- 10 per cent of the amount by which the total income exceeds Rs. 1,80,000/- 3. Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 8,00,000/-. Rs. 32,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-. 4. Where the total income exceeds Rs. 8,00,000/-. Rs. 92,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 8,00,000/-. B. Rates of tax for a woman, resident in India and below sixty years of age at any time during the financial year: 1. Where the total income does not exceed Rs. 1,90,000/-. Nil 2. Where the total income exceeds Rs. 1,90,000 but does not exceed Rs. 5,00,000/-. 10 per cent, of the amount by which the total income exceeds Rs. 1,90,000/....
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....). 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 Calculation: 3.1 Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2011-2012. The income-tax is required to be calculated on the basis of the rates given above subject to provisions of sec 206AA of the Income-tax Act and shall be deducted at the time of each payment. No tax will, however, 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. 1,80,000/- or Rs.1,90,000/- or Rs. 2,50,000/- or Rs. 5,00,000/-, as the case may be, depending upon the gender and age of the employee.(Some typical examples of computation of tax are given at Annexure-I). Payment of Tax on Non-monetary Perquisites by Employer: 3.2 An option has been given to the employer to pay the tax on non-monetary perquisites give....
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....her 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 person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E duly verified by him, and thereupon the person responsible as aforesaid shall compute the relief on the basis of such particulars and take the same into account in making the deduction under Para(3.1) above. Explanation :- For this purpose "University means a University established 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. With effect from 1/04/2010 (AY 2010-11), no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes....
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....o 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. Following details shall be obtained and kept by the employer in respect of loss claimed under the head " income from house property" separately for each house property: (A) Computation of income under the head " income from house property" specifying (a) Gross annual rent/value (b) Municipal Taxes paid, if any (c) Deduction claimed for interest paid, if any (d) Other deductions claimed (B) Address of the property (C) Amount of loan, if any; and (D) Name and address of the lender (loan provider) (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,....
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....d on or after 01.4.1999.The loan taken prior to 01.4.1999 will carry deduction of interest up to Rs.30,000/ only. However, in any case the total amount of 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 Accumulated Balance Under Recognised Provident Fund and contribution from Approved 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 to the Act. 3.10 Where any contribution made by an employer, including interest on such contributions....
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....961 by deductors other than an office of the Government shall be paid to the credit of the Central Government - (i) on or before 30th day of April where the income or amount is credited or paid in the month of March; and (ii) in any other case, on or before seven days from the end of the month in which the deduction is made; or income-tax is due under sub-section (1A) of section 192. (c) Notwithstanding anything contained in (b) above, in special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year specified to in column (2) of the Table below by the date referred to in column (3) of the said Table:- TABLE Sl. No. Quarter of the financial year ended on Date for quarterly payment (1) (2) (3) 1 30^th June 7^th July 2 30^th September 7^th October 3 31^st December 7^th January 4 31^st March 30^th April Mode of Payment of TDS 4.4.2. In the case of an office of the Government, where....
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....ure to Deposit Tax Deducted: 4.5 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 the provisions of section 201. Sub-section (1A) of section 201 lays down that such person shall be liable to pay simple interest (i) 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 such tax is deducted and (ii) at one and one-half percent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such 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 whole or any part of tax at source or fails to pay the whole or part of tax deducted, he shall be liable to pay, by way of penalty , a sum equal to the amount of tax not deducted or paid by him. Further, section 276B lays down that if a person fails....
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....exemptions and deductions. 4.6.2. If an assessee is employed by more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers and Part B may be issued by each of the employers or the last employer at the option of the assessee. 4.6.3. The employer may issue a duplicate certificate in Form No. 16 if the deductee has lost the original certificate so issued and makes a request for issuance of a duplicate certificate and such duplicate certificate is certified as duplicate by the deductor. 4.6.4. (i) Where a certificate is to be furnished in Form No. 16, the deductor may, at his option, use digital signatures to authenticate such certificates. (ii) In case of certificates issued under clause (i), the deductor shall ensure that (a) the conditions prescribed in para 4.6.1 above are complied with; (b) once the certificate is digitally signed, the contents of the certificates are not amenable to change; and (c) the certificates have a control number and a log of such certificates....
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....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. Mandatory Quoting of PAN and TAN: 4.7.1 According to the provisions of section 203A of the Income-tax Act, it is obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax-deduction Account No. (TAN) in the challans, TDS-certificates, statements and other documents. Detailed instructions in this regard are available in this Department's 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 u/s 192(2C), certificates furnished u/s 203 and all returns prepared and delivered as per the provisions of section 200(3) of the Income Tax Act, 1961. 4.7.2 All tax deductors....
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....Higher Education Cess@ 1% is not to be deducted, in case the TDS is deducted at 20% u/s 206AA of the Income-tax Act. Quarterly Statement of TDS: 4.9. Statement of deduction of tax under subsection (3) of section 200. 4.9.1. The person deducting the tax (employer in case of salary income), is required to file Quarterly Statements of TDS in Form 24Q for the periods ending on 30^th June, 30^th September, 31^st December and 31^st March of each financial year, duly verified, to the Director General of Income Tax (Systems), ARA centre, Jhandewalan Extn, New Delhi or M/s National Securities Depository Ltd (NSDL). These statements are required to be filed on or before the 15^th July, the 15^th October, the 15^th January in respect of the first three quarters of the financial year and on or before the 15^th May 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. 4.9.2. The statements referred above may be furnished in paper f....
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....nsion 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 pensioner furnishes 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 of pensions. Further all branches of the banks are bound u/s 203 to issue certificate of tax deducted in Form 16 to the pensioners also vide CBDT circular no. 761 dated 13.1.98. 4.12 New Pension Scheme The New Pension Scheme(NPS) has become operational since 1^st Jan, 2004 and is mandatory for all new recruits to the Central Government Services from 1^st January, 2004. Since then it has been opened to employees of State Governments, Private....
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....to salary, advance of salary, annuity or pension, gratuity, payments in respect of encashment of leave etc. It also includes the annual accretion to the employee's account in a recognized provident fund to the extent it is chargeable to tax under rule 6 of Part A of the Fourth Schedule of the Income-tax Act. Contributions made by the employer to the account of the employee in a recognized provident fund in excess of 12% of the salary of the employee, along with interest applicable, shall be included in the income of the assessee for the previous year. Any contribution made by the Central Government or any other employer to the account of the employee under the New Pension Scheme as notified vide Notification No. F.N. 5/7/2003- ECB&PR dated 22.12.2003(enclosed as Annexure-IVA) referred to in section 80CCD (para 5.4(C) of this Circular) shall also be included in the salary income. Other items included in salary, profits in lieu of salary and perquisites are described in Section 17 of the Income-tax Act. It may be noted that, since salary includes pensions, tax at source would have to be deducted from pension also, if otherwise called for. However, no tax is required to be deducted fr....
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....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 by, or recovered from the assessee in respect of such security or shares; (d) "fair market value" means the value determined in accordance with the method as may be prescribed; (e) "option" means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price; VII. The amount of any contribution to an approved superannuation fund by the employer in r....
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.... of such Government,- (i). the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and (ii). the value of perquisite of such an accommodation shall be the amount calculated in accordance with Sl. No.(2)(a) of Table I, as if the accommodation is owned by the employer. "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, for not being treated as perquisite, 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 8 kilometers of the local limits of any municipality or cantonment board. A project execution site for the purposes of this sub-rule mean....
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....ovide that the amount paid by the employer to the agency supplying the amenity shall be the value of perquisite. Where the supply is made from the employer's own resources, the manufacturing cost per unit incurred by the employer would be taken for the valuation of perquisite. Any amount paid by the employee for such facilities or services shall be reduced from the above amount. 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 ....
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....higher degree of obsolescence, in case of computers and electronic gadgets, however, the value of perquisite shall be worked out by reducing 50% of the actual cost by the reducing balance method for each completed year of use. Electronic gadgets in this case means data storage and handling devices like computer, digital diaries and printers. They do not include household appliance (i.e. white 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....
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....er 43/2010 S.O. 1414(E) issued under F.N. 200/33/2009-ITA-1. (3) Any payment in commutation of pension received under the Civil Pension(Commutation) Rules of the Central Government or under any similar scheme applicable to the members of the civil services of the Union, or holders of civil posts/posts connected with defence, under the Union,or civil posts under a State, or to the members of the All India Services/Defence Services, or, to the employees of a local authority or a corporation established by a Central,State or Provincial Act, is exempt under sub-clause (i) of clause (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 earne....
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....(g) Any Indian Institute of Technology within the meaning of Clause (g) of Section 3 of the Institute of Technology Act, 1961; (h) Such Institute of Management as the Central Government may by notification in the Official Gazette, specify in this behalf. The exemption of amount received under VRS has been extended to employees of the Central Government and State Government and employees of notified institutions having importance throughout India or any State or States. It may also be noted that where this exemption has been allowed to any employee for any assessment year, it shall not be allowed to him for any other assessment year. (7) Any sum received under a Life Insurance Policy, including the sum allocated by 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 perce....
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....or claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance upto Rs.3000/- per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax-deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent. Further if annual rent paid by the employee exceeds Rs 1,80,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee. (10) Clause (14) of section 10 provides for exemption of the following allowances :- (i) Any special allowance or benefit granted to an employee to meet the expenses incurred in the performance of his duties as prescribed under Rule 2BB subject to the extent to which such expenses are actually....
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....o it in Section 10(5) of the Act. Such notification has been made vide Notifications No.S.O.1948(E) dated 24.11.2000 and 81(E) dated 29.1.2001, which are enclosed as per Annexure VA & VB. (14) Under Section 17 of the Act, exemption from tax will also be available in respect of:- (a) the value of any medical treatment provided to an employee or any member of his family, in any hospital maintained by the employer; (b) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or of any member of his family: (i) in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees; (ii) in respect of the prescribed diseases or ailments as provided in Rule 3A(2) of I.T. Rules 1962, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines as provided in Rule 3(A)(1)of I.T. Rule, 1962 : (c) premium paid by the employer in respect of medical insurance taken for his employees (under any s....
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....ry income, which was being allowed up to financial year 2004-05 is not allowable from financial year 2005-06 onwards. 5.4 Deductions under Chapter VI-A of the Act In computing the taxable income of the employee, the following deductions under Chapter VI-A of the Act are to be allowed from his gross total income: A. As per section 80C, an employee will be entitled to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,00,000/-: (1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual. (2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; (3) Any sum deducted from the salary payable by, or, on behalf of the....
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....ksha, 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 Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify; [The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification S.O. No. 1562(E) dated 3.11.05 and Jeevan Akshay-III vide Notification S.O. No. 847(E) dated 1.6.2006 ] (8) Any subscription made to any units of any Mutual Fund, referred to in clause(23D) of section 10, or from the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002 under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf; [The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide....
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....Authority, Housing Board etc. The deduction will also be allowable in respect of re-payment 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 construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act. The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after ....
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....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 notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28.7.2006] (17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf. (18) Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004. (19) Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981. It may be clarified that the amount of premium or other payment made on an insurance policy [other than a contract for d....
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....he previous year if such amount is used for purchasing an annuity plan in the previous year. It may be noted that the contribution made by the Central Government or any other employer, towards a pension scheme notified for section 80 CCD, shall be allowed as deduction in the computation of total income of the employee to the extent that it does not exceed ten percent of employee's salary. W.e.f. 01.04.2011 (FY 2011-12), the amount of deduction so allowed shall be outside the overall limit of Rs one lakh under section 80CCE of the Income Tax Act, 1961. It is therefore, clarified that contribution made by an employee alone will be eligible to deduction limit of upto Rs.one lakh. The contribution made by the Central Government or any other employee to a pension scheme u/s 80CCD(2) shall be excluded from the limit of one lakh rupees provided under Section 80CCE. 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 year,....
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....s of the assessee as does not exceed in the aggregate fifteen thousand rupees. Explanation.-For the purposes of clause (a), "family" means the spouse and dependent children of the assessee. Where the assessee is a Hindu undivided family, the sum referred to shall be the whole of the amount paid to effect or to keep in force an insurance on the health of any member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand rupees. Where the sum specified above is paid to effect or keep in force an insurance on the health of any person specified therein, and who is a senior citizen, the deduction available is "twenty thousand rupees" rather than fifteen thousand as specified above. Explanation.-For the above "senior citizen" means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year. 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 t....
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....e income of that previous year. B. The assessee, 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 under section 139, 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 furnished along with the return of income. For the purposes of section 80DD,- (a) "Administrator" means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)^ ; (b) "dependant" means- (i) in the case of an individual, the spouse, child....
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....ion) Act, 1995 (1 of 1996); or (ii) a person with severe disability referred to in clause (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); (h) "specified company" means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).] G. Under Section 80E of the Act a deduction will be allowed in respect of repayment of interest on loan taken for higher education, subject to the following conditions: (i) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his spouse or children. (ii) The deduction specified above shall be allowed....
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....ted cheque. An employee who makes donations towards these funds is eligible to claim deduction under section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G on the basis of the certificate issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf - Circular No. 2/2005, dated 12-1-2005. I. Under Section 80GG of the Act an assessee is entitled to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions :- (a) the assessee has not been in receipt of any House Rent Allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act; (b) the assessee files the declaration in Form No.10BA. (Annexure-VI) (c) He will be entitled to a deduction in respect of house rent paid by him in excess of 10 per cent of his total income, subject to a ceiling of 25 per cent thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under sectio....
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....actual deposits/ subscriptions / payments made by the employees, by calling for such particulars/ information as they deem necessary before allowing the aforesaid deductions. In case the DDO is not satisfied about the genuineness of the employee's claim regarding any deposit/subscription/payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer. 6. CALCULATION OF INCOME-TAX TO BE DEDUCTED: 6.1 Salary income for the purpose of Section 192 shall be computed as follow:- (a) First compute the gross salary as mentioned in para 5.1 excluding all the incomes mentioned in para 5.2; (b) Allow deductions mentioned in para 5.3 from the figure arrived at (a) above and compute the amount. (c) Allow deductions mentioned in para 5.4 from the figure arrived at (b) above ensuring that the relevant conditions are satisfied. The aggregate of the deductions subject to the threshold limits mentioned in para 5.4 shall not exceed the am....
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....sp; Rs.5,00,000/- , (iv) Rs.10,00,000/- and (v) Rs.20,00,000/-. (B) What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices: Particulars Rupees (i) Rupees (ii) Rupees (iii) Rupees (iv) Rupees (i) Gross Salary Income (including allowances) 1,50,000 2,00,000 5,00,000 10,00,000 20,00,000 Contribution of G.P.F. 10,000 45,000 50,000 1,00,000 1,00,000 Computation of Total Income and tax payable thereon Particulars Rupees (i) Rupees (ii) Rupees (iii) Rupees (iv) Rupees (v) Gross Salary 1,50,000 2,00,000 5,00,000 10,00,000 20,00,000 Less: Deduction U/s 80C 10,000 45,000 50,000 1,00,000 1,00,000 Taxable Income 1,40,000 1,55,000 4,50,000 9,00,000 19,00,000 (A) Tax thereon Nil Nil 27,000 1,22,000 4,22,000 Add: (i) Education Cess @ 2%. Nil Nil 540 2440 8440 (ii)....
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....00/- in view of Section 17(2)(v) (+) 15,000 2 Taxable income 3,15,000 Less : Deduction U/s 80C (i) GPF Rs.20,000/- (ii) LIC Rs.20,000/- (iii) Repayment of House Building Advance Rs.25,000/- (iv) Tuition fees for two children Rs.60,000/- (v) Investment in Unit-Linked Insurance Plan Rs.20,000/- Total =Rs.1,45,000/- Restricted to Rs. 1,00,000/- (-)1,00,000 3 Total Income 2,15,000 4 Income Tax thereon/payable 3,500 Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% 70 35 5 Total Income Tax payable 3,605 6 Rounded off to 3,610 Example 4 For Assessment Year 2012-2013 Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of a female employee below the age of sixty years (With valid PAN furnished to employer). S.No. Particulars Rupees 1 Salary 2,50,000 2 Dearness Allowance 1,00,000 3 House Rent Allowance 1,40,000 ....
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....e Insurance Premium 10,000 7 Contribution to recognized P.F. 42,000 8 Investment in long term infrastructure bonds (80CCF) 20,000 COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON: S.No. Particulars Rupees 1 Salary 7,00,000 2 Bonus 1,40,000 3 Total Salary for Valuation of (1+2): Perquisites i.e. Rs.70,000 per month. 8,40,000 Valuation of perquisites 4(a) Perq. for flat:Lower of (15% of salary for ten months =Rs.1,05,000/-) and (actual rent paid=3,60,000) 1,05,000 4(b) Perquisites for hotel : Lower of (24% of salary of 2 mths=33,600) and (actual payment=1,00,000) 33,600 4(c) Perquisites for furniture(Rs.2,00,000) @ 10% of cost 20,000 4(c)(i) Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000) Less: rent recovered = Rs.158,600 (-)Rs. 60,000 Rs. 98,600 4(d) Add perq. for free gas, electricity, water etc. Rs.40,000 (+) 98,600 [4(c)(i)] = Total perquisites Rs 1,38,600 1,38,600 5 Gross Total Income (Rs.8,40,000 + 1,38,600) 9,78,600 6 Gross Total Income ....
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....: 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 Income Tax thereon/payable 22,200 Add: (i). Education Cess @2% 444 (ii). Secondary and Higher Education Cess @1% 222 Total Income Tax payable 22866 Rounded off to 22870 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 ....
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....nbsp;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 perqui....
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.... request already submitted. 1.1.10 Each branch or Drawing and Disbursement Officer (DDO) of a deductor/collector furnishing separate quarterly e-TDS/TCS statement should furnish the quarterly e-TDS/TCS statement quoting separate TAN issued to each branch/DDO respectively. 1.1.11 Quarterly e-TDS/TCS statement pertains to the period for which they are allowed to furnish. 1.1.12 The quarterly e-TDS/TCS statement has been successfully validated through the latest version of the FVU. 1.1.13 Control totals, TAN and name mentioned in the quarterly e-TDS/TCS statement match with those mentioned on Form 27A. 1.1.14 Computer media is virus free. Acceptance of Quarterly e-TDS/TCS Statements by e-TDS Intermediary (NSDL and TIN-FC branches) 2.1 ACCEPTANCE OF QUARTERLY E-TDS/TCS STATEMENT BY TIN-FC: After deductor/collector furnishes the quarterly e-TDS/TCS statement to TIN-FC in the manner prescribed, TIN-FC will carry out format level validations and other checks to validate the quarterly e-TDS/TCS statement. 2.1.1 Acceptance 2.1.1.1 In case quarterly e-TDS/TCS statement is valid TIN-FC will issue a Provisional Receipt to the deductor/collector. The Provisional Recei....
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....ollector does not provide TAN change request; 2.1.2.11 mismatch of control totals as per with Form 27A and as per e-file; 2.1.2.12 the quarterly statement has not been successfully passed through the latest version of FVU; 2.1.2.13 Quarterly e-TDS/TCS statements do not pertain to the period for which deductors/collectors are allowed to submit their statements. 2.1.2.14 Computer media is not virus free. In such cases, TIN-FC shall issue a pre-printed Non - Acceptance Memo citing reasons for non acceptance to the deductor/collector to carry out necessary corrections. In case of non-acceptance, TIN-FC shall return the computer media as well as any other documents furnished and physical Form 27A to the deductor/collector. No fee will be charged for the e-TDS/e-TCS statement that is not accepted. ANNEXURE IV "Person Responsible for filing Form No. 24G in case of State Govt. Departments" Type of Reporting of Book Entry Person Responsible (AIN holder) for filing 24G. A PAO / DTO B PAO / DTO C PAO / DTO D PAO / DTO E CDDO F STO AG Accountant General PAO Pay & Accounts Officer DTO Dist....
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.... employee and his dependent parents and his spouse at the time of retirment. 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 mandatory annuitisation would be 80% of the pension wealth. Architecture of the new Pension System (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 1^st of January, 2004. ANNEXURE-VI NOTIFICATION S.O.1048 (E)/1156/F.NO. 142/29/99-TPL, DATED 24-11-2000 - In exercise of the powers conferred by sub-clause (i) of clause (18) of Section 10 of the Income-tax Act, 1961 (43 of....