TaxTMI 
TaxTMI 
Income-Tax Deduction From Salaries During The Financial Year 2022-23 Under Section 192 of The Income-Tax Act, 1961.
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.... unless otherwise specified. The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in. As per section 192(1) of the Act, any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under the head of Salary income for that financial year. The section also provides 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. 1. Definition of "salary", "perquisite" and "profit in lieu of salary" (section 17) 1.1 What is salary? As per section 15 of the Act, the following incomes are chargeable to income-tax under the head "Salaries"- (a) any salary due from an employer or a former employer to an assess....
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....ion to the extent exempt under section 10 (10A). Family Pension is chargeable to tax under the head "Income from other sources" and not under the head "Salaries". Therefore, provisions of section 192 of the Act are not applicable. Hence, DDOs are not required to deduct TDS on family pension paid to person. 1.2 What is a Perquisite? As per Section 17(2) of the Act, perquisites include: i) The value of rent-free accommodation provided to the employee by his employer; ii) The value of any concession in the matter of rent in respect of any accommodation provided to the employee by his employer; iii) The value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases: a) By a company to an employee who is a director of such company; b) By a company to an employee who has a substantial interest in the company; c) By an employer (including a company) to an employee, who is not covered by (a) or (b) above and whose income under the head "Salaries" (whether due from or paid or allowed by, one or more employers), exclusive of the valu....
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....the scheme referred to in sub-section (2) of section 80CCD; and (c) in an approved superannuation fund, to the extent it exceeds seven lakh and fifty thousand rupees in a previous year; (viia) the annual accretion by way of interest, dividend or any other amount of similar nature during the previous year to the balance at the credit of the fund or scheme referred to in clause (vii) above to the extent it relates to the contribution referred to in the said clause which is included in total income; and (viii) the value of any other fringe benefit or amenity as prescribed in Rule 3. However, the following are not included as perquisite,- (i) the value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer; (ii) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family- (a) in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes....
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....total income does not exceed Rs. 2,50,000/-. Nil; 2 Where the total income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-. 5 per cent of the amount by which the total income exceeds Rs. 2,50,000/-; 3 Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-. Rs. 12,500/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-; 4 Where the total income exceeds Rs. 10,00,000/-. Rs. 1,12,500/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-. B. Rates of tax for every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year: Sl No Total Income Rate of tax 1 Where the total income does not exceed Rs. 3,00,000/- Nil; 2 Where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000/- 5 per cent of the amount by which the total income exceeds Rs. 3,00,000/-; 3 Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/- Rs. 10,000/- plus 20....
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....come by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding five crore rupees, at the rate of thirty-five per cent of such income-tax; and (e) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A) exceeding two crore rupees, but is not covered under clauses (c) and (d), shall be applicable at the rate of fifteen per cent. of such income-tax: Provided that in case where the total income includes any income by way of dividend or income chargeable under section 111A, section 112 and section 112A of the Income-tax Act, the rate of surcharge on the amount of Income-tax computed in respect of that part of income shall not exceed fifteen per cent.: Provided further that in the case of persons mentioned above having total income exceeding, - (a) fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of....
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....0,000 30 percent Such person is required to exercise the option in the prescribed manner along with the return of income to be furnished under section 139(1) of the Act for the previous year relevant to the assessment year. The concessional rates of tax provided under section 115BAC are subject to the condition that the total income of the individual or HUF shall be computed without any exemption or deduction specified under clause (i) of sub-section (2) of section 115BAC and without set off of any loss specified in clause (ii) of sub-section 2 of the said section. Further, surcharge on income-tax as contained in Para 2.2 shall be applicable in case of person opting for concessional tax regime. Furthermore, in case of a person having income from business or profession, such person is required to exercise the option in prescribed manner on or before the due date specified under such-section (1) of section 139 of the Act for any previous year relevant to assessment year commencing on or after 01.04.2021 and such option once exercised shall apply to subsequent assessment years. However, in case of such persons, the option once exercised can be withdrawn only once and su....
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....ation so made to the deductor shall be only for the purpose of TDS during the previous year and cannot be modified during that year. (CBDT Circular No. C1 of 2020 dated 13.04.2020) No tax, however, will be required to be deducted at source in a case unless the estimated salary income including the value of perquisites is taxable after giving effect to the exemptions, deductions and relief as applicable. (Some typical illustrations of computation of tax are given at Annexure-I). 3.2 Payment of Tax on Perquisites by Employer "Perquisite" may be defined as any casual emolument or benefit attached to an office or position in addition to salary or wages. Perquisites may be in the form of cash or in the form of kind, but will always form part of the salary. Perquisites are divided in two parts i.e. monetary perquisites and non-monetary perquisites. Monetary perquisites are taxable for all employees and non-monetary perquisites are taxable in the hands of specified employees. The following employees are deemed as specified employees: 1) A director-employee 2) An employee who has substantial interest (i.e. benefic....
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....r has changed from one employer to another. It provides for deduction of tax at source by such employer (as the tax payer/employee 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 therefrom, 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). 43.5 Relief When Salary Paid in Arrear or Advance 3.5.1 Section 89 of the Act provides for relief to an assessee to whom salary is being paid in arrear or advance as a result of which, his total income is assessed at a higher rate than that at which it would otherwise have been assessed. Such an assessee can make an application to the Assessing Officer who shall grant relief in the prescribed manner. Rule 21A of the Rules provide the manner for computation of such re....
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....ification is reproduced as under: I, (name of the assessee), do declare that what is stated above is true to the best of my information and belief. It is reiterated that the DDO can take into account loss only under the head "Income from house property". Loss under any other head cannot be considered by the DDO for calculating the amount of tax to be deducted. It may be noted that loss under the head "Income from house property" can be set off only up to Rs. 2.00 lakh with the income under any other head of income in view of the amendment to section 71 of the Act vide Finance Act, 2017. Hence, loss under the head "Income from house property" in excess of Rs. 2.00 lakh is to be ignored for calculating the amount of tax deduction. 3.7 Computation of income under the head "Income from house property" Section 192(2D) enables the person responsible for making the payment, to obtain the evidence or proof of the prescribed claims, including claim for set-off of loss. While taking into account the loss from House Property, the DDO shall ensure that the employee files the declaration referred to above and encloses therewith a computation of such loss....
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.... constructed (as reduced by any part of interest allowed as deduction under any other section of the Act) shall be deducted in equal installments for the FY in question and subsequent four FYs. (c) The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of Principal and Interest of the loan so repaid. As discussed in para 4.6.5 section 192(2D) read with rule 26C makes it mandatory for the DDO to obtain following details/evidences in respect of Interest deductible. (i) Interest payable or paid (ii) Name of the lender (iii) Address of the lender (iv) PAN or Aadhaar number of the lender PAN or Aadhaar number, as the case may be, of the lender being financial institution or employer, is to be provided if it is available with the employee. However, in case of other lenders, obtaining of PAN or Aadhaar number is mandatory by the DDO. 3.8 Adjustment for Excess or Shortfall of D....
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....ot specify any TDS rate. However as per section 192, the tax deduction shall be made at the average rate of income tax on the amount payable, computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income under the head of Salary for that financial year. The rates as per different income slabs are specified in the First Schedule to the Finance Act. In the case of payment to non-resident persons, the withholding tax rates specified under the Double Taxation Avoidance Agreements shall also be considered. 4.2 Deduction of Tax at Nil or Lower Rate If the jurisdictional TDS officer of the employer issues a certificate of No Deduction or Lower Deduction of Tax under section 197 of the Act, in response to the application filed before him in Form No 13 by the employee, then the DDO should take into account such certificate and deduct tax on the salary payable at the rates mentioned therein. (see Rule 28AA). The Unique Identification Number of the certificate is required to be reported in Quarterly Statement of TDS (Form 24Q). 4.3 Deposit of Tax Deducted As per section 200 of the ....
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....day of April where statement relates to the month of March; and in any other case, on or before 15 days from the end of relevant month to the agency authorized by the Principal Director General of Income‐tax (Systems) [TIN Facilitation Centres currently managed by M/s National Securities Depository Ltd] in respect of tax deducted by the deductors and reported to him for that month; and (b) intimate the number (hereinafter referred to as the Book Identification Number or BIN) generated by the agency to each of the deductors in respect of whom the sum deducted has been credited. BIN consist of receipt number of Form 24G, DDO sequence number in Form No. 24G and date on which tax is deposited. The statement in Form 24G shall be furnished electronically under digital signature or electronically along with the verification in Form 27A. If the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, as stated above, fails to deliver the statement within the time as required u/s 200(2A), he/she will be liable to pay, by way of penalty, under section 272A(2)(m), a sum which shall be....
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....educted; and at the rate of 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 shall be paid before furnishing the statement in accordance with the provisions of subsection (3) of section 200. 4.5.2 In case any person, including the principal officer of a company fails to deduct the whole or any part of the tax on the sum paid to a payee or on the sum credited to the account of a payee but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, the interest shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such payee. 4.5.3 Where an order is made by the Assessing Officer for the default under sub-section (1) of section 201, the interest shall be paid by the person in accordance with such order. 4.5.4 Section 271C inter alia 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 under the proviso to section 194B, he/she shall be liable to pay, by way ....
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.... 1st day of April, 2012 under the provisions of section 192 of Chapter XVII-B. Part A of Form No 16 shall have a unique TDS certificate number. The deductor shall generate 'Part B (Annexure)' of Form No. 16 from the Traces website and issue to the deductee after due authentication and verification along with the Part A of the Form No. 16. 4.6.4 It may be noted that under the new TDS procedure, TAN of deductor/ PAN or Aadhaar number of the deductee and receipt number of TDS statement filed by the deductor act as unique identifier for granting online credit of TDS to the deductee. Hence due care should be taken in filling these particulars. Due care should also be taken in indicating correct CIN/ BIN in TDS statement. 4.6.5 If the DDO fails to issue these certificates to the person concerned, as required by section 203, he/she will be liable to pay, by way of penalty, under section 272A(2)(g), a sum which shall be Rs.500/- for every day during which the failure continues. However, the amount of such penalty shall not exceed the amount of tax which is deductible at source. It is, however, clarified that there is no obligation to issue the TDS certificate in case tax a....
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....rm 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. 9. TDS certificate (Form16) would be generated for the deductee only if Valid PAN or Aadhaar number as the case may be, is correctly mentioned in the Annexure II of Form 24Q in Quarter 4 filed by the deductor. Moreover, employers are advised to ensure in Form 16 that the status of "matching" with respect to "Form 24G/OLTAS" is 'F'. If the status of matching is other than 'F', kindly take necessary action promptly to rectify the same. It is pertinent to mention here that certain facilities have been provided to the deductors at website www.tdscpc.gov.in/including online correction of statements (Form 24Q). [Note: TRACES is a web-based application of the Income-tax Department that provides an interface to all stakeholders associated with TDS administration. It enables viewing of challan status, downloading of NSDL Conso File, Justification Report and Form 16 / 16A as well as viewing of annual tax credit statements (Form 26AS). Each deductor is required to Registe....
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....contributions of that employee to any approved superannuation fund, all such deductions or payments should be included in the statement. m. Permanent Account Number of landlord shall be mandatorily furnished where the aggregate rent paid during the previous year exceeds one lakh rupees. n. Permanent Account Number of lender shall be mandatorily furnished where the housing loan, on which interest is paid, is taken from a person other than a Financial Institution or the Employer. 4.6.9 Authentication by Digital Signatures: (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 is maintained by the deductor. The digital signature....
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....ese certificates to the person concerned, as required by section 192(2C), he/she will be liable to pay, by way of penalty, under section 272A(2)(i), a sum which shall be Rs.500 /- for every day during which the failure continues. 4.7.4 DDOs empowered to obtain evidence of proof or particulars of the prescribed claim (including claim for set-off of loss) under the section 192(2D) DDOs have been authorized u/s 192 to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purpose of estimating the income of the assessee or computing the amount of tax deductible under the said section. The evidence /proof /particulars for some of the deductions/exemptions/allowances/set-off of loss claimed by the employee such as rent receipt for claiming deduction in HRA, evidence of interest payments for claiming loss from self-occupied house property, etc. is not available to the DDO. To bring certainty and uniformity in this matter, section 192(2D) provides that person responsible for paying (DDOs) shall obtain from the assessee evidence or proof or particular of claims such as House rent Allowance (where aggregate an....
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....m or income or amount, on which tax is deductible. If the employee(deductee) fails to furnish his/her PAN or Aadhaar number, as the case may be, to the deductor, the deductor has been made responsible to make TDS at higher of the following rates: i) at the rate specified in the relevant provision of this Act; or ii) at the rate or rates in force; or iii) at the rate of twenty per cent 4.9.2 The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS. However, where the income of the employee computed for TDS u/s 192 is below taxable limit, no tax will be deducted. But where the income of the employee computed for TDS u/s 192 is above taxable limit, the deductor will calculate the average rate of income- tax based on rates in force as provided in sec 192. If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% and in case the average rate exceeds 20%, tax is to be deducted at the average rate. 4.10 Statement of deduction of tax under section 200(3) [Quarterly Statement of TDS] 4.10.1 The person deducting the tax....
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....rnishing statements u/s 200(3) of the Act Under section 234E of the Act, if a person fails to deliver or caused to be delivered a statement within the time prescribed in section 200(3) in respect of tax deducted at source [on or after 1.07.2012] he/she shall be liable to pay, by way of fee a sum of Rs. 200 for every day during which the failure continues. However, the amount of such fee shall not exceed the amount of tax which was deductible at source. This fee is mandatory in nature and to be paid before furnishing of such statement. 4.12 Rectification of mistake in filing TDS Statement A DDO can also file a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered earlier. 4.13 Penalty for failure to furnishing statements or furnishing incorrect information (section 271H) Under section 271H of the Act, if a person fails to deliver or caused to be delivered a statement within the time prescribed in section 200(3) or furnishes an incorrect statement, in respect of tax deducted at source [on or after 1.07.2012], he/she shall be liable to pay, by way of pena....
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....he 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 of the Act to issue certificate of tax deducted in Form 16 to the pensioners. All tax deductors (incl. nationalized banks) are required to file the TDS returns for TDS on pension payments in Form No. 24Q only. 4.14.2 Under section 194P of the Act, the specified bank shall compute the total income of specified senior citizen and deduct income tax on the basis of rates in force. As per clause (2) of section 194P, the provisions of section 139 will not apply to specified senior citizen for the assessment year for which tax has been deducted. The specified senior citizen has been defined as an individual resident in India who has attained age of 75 years or more and who is having income of the nature of pension and no other income except the income of the nature of interest received or receivable from any account maintained by such individual in the same specified bank in which he is receiving his pension income. Further the specified senior citizen has to furnish declaration in Form 12BBA (Rule 26D). 4.14.3 The declaratio....
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.... Head "Salaries" 5.1 Income chargeable under the head "Salaries" (1) The following income shall be chargeable to income-tax under the head "Salaries": (a) any salary due from an employer or a former 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". 5.2 Value of Perquisites as per Rule 3 The value of perquisites provided directly ....
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....on or retirement benefits of the employee concerned; (b) employer's contribution to the provident fund account of the employee; (c) allowances which are exempted from payment of tax; (d) the value of perquisites specified in clause (2) of section 17 of the Income-tax Act; (e) any payment or expenditure specifically excluded under proviso to sub-clause (iii) of clause (2) or proviso to clause (2) of section 17; (f) lump-sum payments received at the time of termination of service or superannuation or voluntary retirement, like gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and similar payments; Salary from all employers shall be taken into consideration in respect of the period during which an accommodation is provided. Where on account of the transfer of an employee from one place to another, he/she is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value for a period not exceeding 90 d....
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....er place. It may be clarified that while services provided as an integral part of the accommodation, need not be valued separately as perquisite, any other services over and above that for which the employer makes payment or reimburses the employee shall be valued as a perquisite as per the residual clause. In other words, composite tariff for accommodation will be valued as per the Rules and any other charges for other facilities provided by the hotel will be separately valued under the residual clause. d) 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 if: (i) such accommodation is located in a "remote Area" or (ii) the accommodation is of a temporary nature having plinth area of not more than 800 square feet and is not located within 8 kilometers of the local limits of any municipality or cantonment board. A "remote area" means an area located at least 40 kilometers away from a town having a population not exceeding 20,000 as per....
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....apacity of engine of the motor car exceeds 1.6 litres. (II) If the motor car is owned by the employee but the actual running and maintenance charges (including remuneration of chauffeur, if any) are met or reimbursed by the employer, and (a) Such reimbursement is for the use of vehicle wholly and exclusively for official purposes, the value of perquisites shall be Nil. However, following compliances are necessary: • The employer has maintained complete details of the journey undertaken which may include date of journey, destination, mileage and the amount of expenditure incurred thereon for official purposes; • The employer gives a certificate that the expenditure was incurred wholly and exclusively for performance of official duties. (b) Such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household, the value of perquisite shall be the actual amount of expenditure incurred by the employer as reduced by the amount of Rs. 1800/- (plus Rs. 900/-, if chauffeur is also provided) per month for motor car where cubic capacity....
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....endants including a sweeper, gardener and a watchman shall be the actual cost to the employer. Where the attendant is provided at the residence of the employee, full cost will be taxed as perquisite in the hands of the employee irrespective of the degree of personal service rendered to him. Any amount paid by the employee for such facilities or services shall be reduced from the above amount. (D) Gas, electricity & water for household consumption [Rule 3(4)]: The value of benefit in the nature of gas, electricity and water shall be the amount paid by the employer to the agency supplying gas, electricity and water. 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 perquisite value. (E) Free or concessional education [Rule 3(5)]: Perquisite on account of free or concessional education for any member of the employee's household shall be determined as • the sum equal to the amount of expenditure incurred by the employer in tha....
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....utstanding monthly balance method. For valuing perquisites under this rule, any other method of calculation and adjustment otherwise adopted by the employer shall not be relevant. However, for loans up to Rs. 20,000/- in the aggregate no value would be charged. Loans for medical treatment of diseases specified in Rule 3A are also exempt, provided the amount of loan for medical reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement is received, the perquisite value at the prescribed rate shall be charged from the date of reimbursement on the amount reimbursed, but not repaid against the outstanding loan taken specifically for this purpose. (H) Perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed by the employer for any holiday availed [Rule 3(7)(ii)] The value of perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed by the employer for any holiday availed of by the employee or any member of his/her household, other than travel concession or assistance (as per clause 5 of section 10), shall be the amount of the expend....
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....han Rs. 5,000 in aggregate per annum, the value of perquisite shall be Nil. (K) Membership fees and Annual Fees [Rule 3(7)(v)] Any membership fees and annual fees incurred by the employee (or any member of his/her household), which is charged to a credit card (including any add-on card) provided by the employer, or otherwise, paid for or reimbursed by the employer is taxable on the following basis: Amount of expenditure incurred by the employer XXX Less: Expenditure on use for official purposes XXX Less: Amount, if any, recovered from the employee XXX XXX Amount taxable as perquisite XXX However, if the amount is incurred wholly and exclusively for official purposes it will be exempt if the following conditions are fulfilled i) Complete details of such expense, including date and nature of expenditure, is maintained by the employer. ii) Employer gives a certificate that the same was incurred wholly and exclusively for official purpose. (L) Club Expenditure [Rule 3(7)(vi)] The value of perquisite for the reimbursement or payment done by the employer for any expenditure incurred (including an....
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....he value shall be NIL. In respect of para (A) to (N) above, the phrase, "member of household" shall include a. Spouse(s), b. Children and their spouses, c. Parents, and d. Servants and dependents. Medical Reimbursement by the employer : As per the amendment vide Finance Act, 2018, the total amount of medical re-imbursement is to be taken as perquisite under section 17(2). The following shall not be included under the perquisites: (a) the value of any medical treatment provided to an employee or any member of his/her family in any hospital maintained by the employer; (b) any sum paid by the employer on medical expenditure incurred by the employee on self or any member of his/her family- • 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; • in respect of the prescribed diseases in any hospital approved by the Principal Chief Commissioner or Chief Commissioner. • in respect of any illness relating to COVID-19 subject to such conditions as the Central Governm....
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....the above provisions carefully before they determine the perquisite value for deduction purposes. 5.3 Incomes not included under 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 :- 5.3.1 The value of any travel concession or assistance received by or due to an employee from his employer or former employer for self and his/her family, in connection with proceeding on (a) leave to any place in India or (b) after retirement from service, or, after termination of service to any place in India is exempt under Section 10(5) subject, however, to the conditions prescribed in Rule 2B of the Rules. For the purpose of this clause, "family" in relation to an individual means: (i) the spouse and children of the individual; and (ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual. It may also be noted that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such tr....
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....e 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 Section 10(10AA)(i) of the Act. In the case of employees other than Government 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, calculated on the basis of the average salary drawn during ten months immediately preceding retirement on superannuation or otherwise. The entitlement of earned leave shall not exceed 30 days for every year of actual service rendered. 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 superannuation or otherwise, after 1.4.1998. As per section 10(10AA)(ii), the exemption in respect of leave encashment in case of a non-Government employee at the time of retirement will be lower of the following amounts : • Period of earned leave standing....
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....ent that such amount does not exceed Rs. 5,00,000/-: a) A public sector company; b) Any other company; c) An Authority established under a Central, State or Provincial Act; d) A Local Authority; e) A Cooperative Society; f) A university established or incorporated or under a Central, State or Provincial Act, or, an Institution declared to be a University under section 3 of the University Grants Commission Act, 1956; g) Any Indian Institute of Technology within the meaning of Section 3 (g) of the Institute of Technology Act, 1961; h) Any State Government; or i) The Central Government; or j) 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 ....
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.... to an assessee on closure of his account or on his opting out of the pension scheme referred to in section 80CCD to the extent it does not exceed sixty percent from financial year 2019-20[ as amended by Finance (NO.2 ) Act, 2019], of the total amount payable to him at the time such closure of his opting out of the scheme shall be exempt. Under section 10 (12B) of the Act, any payment from the National Pension System Trust to an employee under the pension scheme referred to in section 80CCD, on partial withdrawal made out of his account in accordance with the terms and conditions, specified under the Pension Fund regulatory and Development Authority Act, 2013 and the regulation made thereunder, to the extent it does not exceed twenty-five percent of the amount of contribution made by him shall be exempt. 5.3.8 Any payment from a Provident Fund to which the Provident Funds Act, 1925, applies or from any other provident fund set up by the Central Government and notified by it in the Official Gazette, is exempt under clause (11) to section 10. First proviso to clause (11) of section 10, with effect from 1st April, 2022, provides that exemption under said clause will not be avail....
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....iture incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from Income-tax. The quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be the least of the following: In Mumbai/Delhi/Kolkata/ Chennai In Any other cities 1.Allowance actually received 1. Allowance actually received 2. Rent paid in excess of 10% of salary 2. Rent paid in excess of 10% of salary 3. 50 percent of salary 3. 40 percent of salary For this purpose, "Salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites. It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in Rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. 5.3.11 Section 10(14) provides for exemption of the following allowances:- i.&nb....
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.... in the Official Gazette is exempt from income-tax. By notification No.F.2/14/89-NS-II dated 7.6.89, as amended by notification No.F.2/14/89-NS-II dated 12.10.89, the Central Government has notified a scheme called Deposit Scheme for Retiring Government Employees, 1989 for the purpose of the said clause. 5.3.13 Any scholarship granted to meet the cost of education is not to be included in total income as per provisions of section 10(16) of the Act. 5.3.14 Section 10(18) provides for exemption of any income by way of pension received by an individual who has been in the service of the Central Government or State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or "Vir Chakra" or such other gallantry award as may be specifically notified by the Central Government. Family pension received by any member of the family of such individual is also exempt [Notifications No.S.O.1948(E) dated 24.11.2000 and 81(E) dated 29.1.2001, which are enclosed as per Annexure VIII & IX]. Family for this purpose shall have the meaning assigned to it in Section 10(5) of the Act. DDO may not deduct any tax in the case of recipients of....
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....d the Circular no. 14 of 2022 dated 28th June 2022 on the subject, "Order under section 119 of the Income-tax Act, 1961 (the Act) in relation to tax deduction at source under section 194S of the Act for transactions other than those taking place on or through an Exchange". Kind reference is also invited to Notification No. 74/2022/F. No. 370142/29/2022TPL (Part-I) dated 30th June 2022 and Notification No. 75/2022/F. No. 370142/29/2022-TPL (Part-I) dated 30th June 2022. 5.4 Deductions u/s 16 of the Act from salaries 5.4.1 Standard deduction under section 16 (ia): From Financial year 2019-2020, a deduction of fifty thousand rupees or the amount of salary whichever is less, shall be allowed as standard deduction. 5.4.2 Entertainment Allowance [Section 16(ii)]: A deduction is also allowed under section 16(ii) in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee, who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary(exclusive of any allowance, benefit or other perquisite) ....
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....ovident 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 or advance; (5) Any sum paid or deposited during the year as a subscription:- (a) in the name of employee or a girl child of that employee including a girl child for whom the employee is the legal guardian in 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; [The Central Government has since notified the scheme "Sukanya Samriddhi Account' vide Notification GSR No. 863(E) dated 02.12.2014] (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 and National Saving Certificate (IXth Issue) vide Notification . G.S.R. 848 (E), dated the 29th November, 201....
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....fied company defined in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, 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 Notification S.O. No. 1563(E) dated 3.11.2005] (10) Any subscription made to any such deposit scheme of, or, any contribution made to any such pension fund set up by, the National Housing Bank, as the Central Government may, by 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,....
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....spect of which the deduction is allowable under the provisions of section 24 of the Act will also not be included in payments towards the cost of purchase or construction of a house property. Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he/she receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly. (13) Tuition fees, except payment in the nature of development fees or donation or payment of similar nature, whether at the time of admission or thereafter, paid to any university, college, school or other educational ins....
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....sued on or after 1^st April 2012 10% of the actual capital sum Assured Policy issued on or after 1^st April 2013 * - In cases of persons with disability or person with severe disability as per Sec 80 U or suffering from disease or ailment as specified in rules made under Sec 80DDB 15% of the actual capital sum assured *Introduced by Finance Act 2013 Actual capital sum assured in relation to a life insurance policy means the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account - i. the value of any premium agreed to be returned, or ii. any benefit by way of bonus or otherwise over and above the sum actually assured which may be received under the policy by any person. 5.5.2 Deduction in respect of contribution to certain pension funds (Section 80CCC) Section 80CCC allows an employee deduction of an amount paid or deposited out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the Fund ....
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....n the said pension scheme is made by the Central Government or the State Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 14% if the amount is contributed by the Central Government or the State Government of his salary, and 10% in case of contribution by any other employer. The provisions with respect to the employer being "State Government" is effective retrospectively from the 1st day of April, 2020 and accordingly, applies in relation to the assessment year 2020-2021 and subsequent assessment years so as to ensure no additional tax liability arises on any contribution made in excess of 14% during such time. As per Section 80CCD(3), any amount standing to the credit of the assessee in his account referred to in sub-section (1) or sub-section (1B), in respect of which a deduction has been allowed under those sub-sections or sub-section (2), together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, on account of closure or his opting out of the pension scheme o....
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....D(1B) is an additional deduction in respect of any amount paid in the NPS upto Rs. 50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs. 1,50,000/- provided under this section. 5.5.4 Deduction in respect of health insurance premia paid, etc. (Section 80D) Particulars Case-1 Case-2 Case-3 Self & Family (no one of them is a senior citizen) Parents (no one of them is a senior citizen) Self & Family (no one of them is a senior citizen) Parents (atleast one of them is a senior citizen) Self & Family (atleast one of them is a senior citizen) Parents (atleast one of them is a senior citizen) Medical Insurance, etc.* 25,000 25,000 25,000 50,000 50,000 50,000 Medical Expenditure** -- -- -- 50,000 50,000 50,000 Maximum deduction allowable 25,000 25,000 25,000 50,000 50,000 50,000 Aggregate amount of deduction allowable under section 80D 50,000 75,000 1,00,000 * Includes (i) contribution to the Central Government health Scheme/notified ....
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....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 dependent, being a person with disability, the employee shall be allowed a deduction of a sum of Rs 75,000/- from his gross total income of that year. However, where such dependent is a person with severe disability, an amount Rs 1,25,000/- shall be allowed as deduction subject to the specified conditions. The deduction under (b) above was earlier to be allowed only if the following condition was fulfilled: (i) the scheme referred to in (b) above provides for payment of annuity or lump sum amount for the benefit of a dependent, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made; With effect from 01.04.2022, the provision has been amended and allows for the deduction on satisfaction of either of the conditions (i) or(ii) mentioned in subclause (a) of clause 2 of section 80DD. The same is as un....
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....cal authority as defined in Rule 11A(1) in the prescribed form as per Rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein. 2. Further in cases where the condition of disability is temporary and 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 as in 1 above and furnished before the DDO. 3. For the purposes of sections 80DD and 80 U some of the terms defined are as under:- (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 ; (b) "dependant" means- (i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them; (ii) in the case of a Hindu undivided family, a member of the Hindu undivided family, dependent wholly or mainly on such indi....
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....re 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; (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. 5.5.6 Deduction in respect of medical treatment, etc. (Section 80DDB): Section 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, of any amount actually paid for the medical treatment of such disease or ailment as may be specified in the rules 11DD (1) for himself or a dependent. The deduction allowed is equal to the amount actually paid is in respect of the employee or his dependent or Rs. 40,000 whichever is less. Now the deduction can be allowed on the basis of a prescription from an oncologist, a urologist, nephrologist, a hematologist, an immunologist or such other specialist, as mentioned in Rule 11DD. However, the amount of the claim shall be reduced by the amount if any received from the insurer or reimbursed by the employer. Further in case of th....
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....he Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so; 5.5.8 Deduction in respect of interest on loan taken for certain house property (Section 80EEA): Section 80EEA introduced by the Finance (No.2) Act, 2019 ( No. 23 of 2019), allows deduction from gross total income of an individual (not eligible to claim deduction under section 80EE) in respect of the interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property if following conditions are met:- (i) the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2021; (ii) the stamp duty value of residential house property does not exceed forty-five lakh rupees; (iii) the assessee does not own any residential house property on the date of sanction of loan. For the purposes of this section,- (a) the expression "financial institution" shall have the meaning assigned to....
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....est under any other provision of this Act for the same or any other assessment year. 5.5.10 Deductions on respect of donations to certain funds, charitable institutions, etc. (Section 80G): Section 80G provides for deductions on account of donation made to various funds, charitable organizations etc. In cases where employees make donations to the Prime Minister's National Relief Fund, the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund through their respective employers, it is not possible for such funds to issue separate certificate to every such employee in respect of donations made to such funds as contributions made to these funds are in the form of a consolidated 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. No deduction under this section is allowable in case the amount of donation exceeds Rs 2000/- u....
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....as its object the undertaking of research in social science or statistical research or to a university, college or other institution to be used for research in social science or statistical research u/s 35(1)(iii) Central Government 3. An association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA furnishes the certificate u/s 35CCA (2) Prescribed Authority under Rule 6AAA 4. An association or institution which has as its object the training of persons for implementing programmes of rural development. furnishes the certificate u/s 35CCA (2A) Prescribed Authority under Rule 6AAA 5. A public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme. furnishes the certificate u/s 35AC(2)(a) National Committee for Promotion of Social & Economic Welfare 6. An association ....
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.... (b) co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or (c) Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898. For this section, "time deposits" means the deposits repayable on expiry of fixed periods. 5.5.14 Deduction in respect of interest on deposits in case of senior citizens (Section 80TTB): Section 80TTB introduced by Finance Act, 2018 allows deduction to a senior citizen from his gross total income in respect of income by way of interest on deposits with - (a) banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); (b) co-operative society engaged in carrying on the business of banking (including a cooperative land mortgage bank or a co-operative land development bank); or (c) a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898. The amount of deduction in respect of above interest on deposit is as under:- (i) in ....
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....ain liable to deduct tax on any sum paid on account of returned contributions (including interest, if any) even if a fund or part of a fund ceases to be an approved Superannuation fund. 7.3 As per section 192A of the Act, w. e. f. 01.06.2015 the trustees of the EPF Scheme 1952 framed under section 5 of the EPF & Misc. Provisions Act, 1952 or any person authorized under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognized provident fund is includible in his total income owing to the provisions of Rule 8 of Part A of Fourth Schedule not being applicable at the time of payment of accumulated balance due to the employee, deduct income tax thereon @ 10% if the amount of such payment or aggregate of such payment exceeds Rs 50,000. In case the employee does not provide his/her PAN or Aadhaar number as the case may be, or provides an invalid PAN or Aadhaar number as the case may be, then the deduction will have to be made at maximum marginal rate. Rule-8 of Part-A of fourth schedule of the Act excludes the following accumulated balance due and becoming payable to the e....
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....obtaining copies of invoices of specified expenditure incurred during the specified period. 9. Calculation of income-tax to be deducted: 9.1 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 including all the incomes mentioned in para 5.2 and excluding the income mentioned in para 5.3. b) Allow deductions mentioned in para 5.4 from the figure arrived at (a) above and compute the amount to arrive at Net salary of the employee c) Add income from all other heads- "House property", "Profits & gains of Business or Profession", Capital gains and Income from other Sources to arrive at the Gross Total Income as shown in the form of simple statement mentioned para 3.6. However, it may be remembered that no loss under any such head is allowable by DDO other than loss under the head "Income from House property" to the extent of Rs. 2.00 lakh. d) Allow deductions mentioned in para 5.5 from the figure arrived at (c) above ensuring that the relevant conditions are satisfied. The aggregate of the deductions subject to the threshold limits mentioned in pa....
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....ary income of: i) Rs.2,50,000/-, ii) Rs.6,00,000/-, iii) Rs.10,50,000/- iv) Rs.55,50,000/-. and v) Rs. 1,10,50,000/- (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 (v) Gross Salary Income (including allowances) 2,50,000 6,00,000 10,50,000 55,50,000 1,10,50,000 Contribution of G.P.F. 45,000 50,000 1,00,000 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 2,50,000 6,00,000 10,50,000 55,50,000 1,10,50,000 Less: Standard deduction u/s 16(ia) 50000 50000 50000 50000 50000 Less: Deduction U/s 80C 45,000 50,000 1,00,000 1,00,000 1,00,000 Taxable Income 1,55,000 5,00,000 9,00,000 54,00,000 1,09,00,000 (A) Tax thereon Nil Nil* 92,500 14,32,500 30,82,500 Surcharge 1,....
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....y employer on the treatment of self and dependent family member 35,000 3 Contribution of GPF 20,000 4 LIC Premium 20,000 5 Repayment of House Building Advance 25,000 6 Tuition fees for two children 60,000 7 Investment in Unit-Linked Insurance Plan 30,000 8 Interest Income on Savings Account 8,000 9 Interest Income on Time Deposit 15,000 Computation of Tax S.No. Particulars Rupees 1 Gross Salary 5,55,000 2 Add: Perquisite in respect of reimbursement of Medical Expenses 35,000 3 Less: Standard deduction u/s 16(ia) 50,000 4 Income from Other Sources i) Interest Income on Savings Account Rs 8,000 ii) Interest Income on Time Deposit Rs 15,000 23,000 5 Gross Total Income 5,63,000 6 a. 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.30,000/- Total =Rs.1,55,000/- Restricted to Rs. 1,50,000/- b. Less : Deduction u/s ....
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....ble 14700 Add: Health & Education Cess @ 4%. 588 Total Income Tax payable 15288 Rounded off to 15290 @ or Aadhaar number, as the case may be. # It may be noted that tax liability may not be the same in case the taxpayer opts for concessional tax regime under section 115BAC of the Act. Example 5 For Assessment Year 2023-24 Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years 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 (With valid PAN@ furnished to employer). S.No. Particulars Rupees 1 Salary 7,00,000 2 Bonus 1,40,000 3 Free gas, electricity, water etc. (Actual bills paid by company) 40,000 4(a) Flat at concessional rate (for ten month). @ Rs.36000/month 3,60, 000 4(b) Hotel rent paid by employer (for two month) 1,00,000 4(c) Rent recovered from employee. 60,000 4(d) Cost of furniture. 2,00,000 5 Subscription to Unit Linked Insurance Plan 50,000 6 Life Insurance Prem....
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....,20,000 9 Repayment of House Building Loan (Principal) 60,000 10 Tuition Fees for three children (Rs.10,000 per child) 30,000 Computation of total income and tax payable thereon S.No. Particulars Rupees 1 Gross Salary (Basic+DA+HRA+SDA) 7,42,000 Less : House rent allowance exempt U/s 10 (13A) will the amount which is least of: (i) Actual amount of HRA received : Rs.1,80,000 (ii) Rent paid in excess of 10% of salary (Including D.A.) assuming D.A. is included for retirement benefits (1,20,000- 55,000) : Rs. 65,000 (iii) 50% of salary (including D.A) : Rs. 2,75,000 65,000 Less : Standard deduction u/s 16(ia) 50,000 Gross Total Taxable Income 6,27,000 4 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 1,50,000 1,50,000 5 Total Income 4,77,000 ....
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.... 8,50,000 13,00,000 Less: Standard deduction u/s 16(ia) 50,000 50,000 50,000 Less: Deduction U/s 80C 80,000 1,20,000 1,50,000 Taxable Income 4,20,000 6,80,000 11,00,000 Tax thereon Nil 36,000 1,30,000 Add: Health & Education Cess @ 4%. Nil 1,440 5,200 Total tax payable Nil 37,440 1,35,200 @ or Aadhaar number, as the case may be. # It may be noted that tax liability may not be the same in case the taxpayer opts for concessional tax regime under section 115BAC of the Act. Example 9 1. Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C. Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs.40,000, DA at prescribed rates, transport allowances @ Rs.3600+DA thereon, and HRA (existing- from 1st July 2022 @24% of basic pay (though living in his own house). His date of increment is 1st July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2023-24 S.No. Particulars Rupees 1. Honor....
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....on HDFC Loan (upto Rs. 2,00,000) 2,00,000 (-) 2,00,000 Gross Total Income 4,80,600 Less: Deduction u/s 80 C - GPF @ Rs 4,700/-p.m 56,400 - CGEGIS @ Rs 500/- p.m 6,000 - Life Insurance Premium 10, 500 - Repayment of HDFC Loan 95,000 - Deposit in Public Provident Fund 10,000 1,77,900 1,50,000 Restricted to a maximum of Taxable Income 3,30,600 Computation of Tax Liability Tax payable 4,030 Less : Rebate u/s 87A 4,030 Net Income-tax payable Nil Add :he/she alth & Education Cess @ 4%. Nil Total Tax Payable Nil # It may be noted that tax liability may not be the same in case the taxpayer opts for concessional tax regime under section 115BAC of the Act. ANNEXURE-II FORM NO.12BA {See rule 26A(2)(b)} Statement showing particulars of perquisites, other fringe benefits or amenities and prof....
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.... that the information given above is based on the books of account, documents and other relevant records or information available with us and the details of value of each such perquisite are in accordance with section 17 and rules framed thereunder and that such information is true and correct. Place.... Signature of the person responsible for deduction of tax Date.... Full Name ......... Designation............. FORM NO.12BB (See rule 26C) Statement showing particulars of claims by an employee for deduction of tax under section 192 1. Name and address of the employee: 2. Permanent Account Number or Aadhaar number of the employee: 3. Financial year: Details of claims and evidence thereof Sl No. Nature of claim Amount (Rs.) Evidence / particulars (1) (2) (3) (4) 1 House Rent Allowance: (i) Rent paid to the landlord (ii) Name of the landlord (iii) Address of the landlord (iv) Permanent Account Number or Aadhaar number, a....
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.... POINT NO.4.4.2.1 OF CIRCULAR OF DEDUCTION OF TAX AT SOURCE - INCOME TAX DEDUCTION FROM SALARIES U/S 192 OF THE INCOME-TAX ACT, 1961 - FINANCIAL YEAR 2015-16 Compulsory filing of Statement by PAO, Treasury Officer, etc. in case of payment of TDS by Book Entry. 1. Procedure of preparation and furnishing Form 24G at TIN-Facilitation Centres (TIN-FCs): The Form 24G should be prepared by the PAO/DTO/CDDO (hereinafter referred to as AOs) as per the data structure (File format) prescribed by the DIT (Systems), Delhi which is available on TIN website www.tin-nsdl.com. The AOs can prepare Form 24G either by using in-house facilities, third party software or by using form 24G Return Preparation Utility (RPU) developed by NSDL e-Governance Infrastructure Limited (NSDL), which is freely downloadable from the TIN web-site www.tin-nsdl.com. After preparation of form 24G, the AO is required to validate the same by using the Form 24G File Validation Utility (FVU) which is freely available on TIN website. Once file is validated through FVU, '.fvu file' in CD/DVD/Pen Drive along with physical Statement Statisti....
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....mographic details. No Digital Signature Certificate (DSC) is required for registration and online uploading of Form 24G. 2.1 Online uploading of correction Form 24G at TIN website: AO can file a correction Form 24G for any modification or cancellation of Form 24G accepted at TIN Central System. Preparation and validation of correction form 24G is in line with regular form 24G. The validated Form 24G correction file (.fvu file) can be uploaded online through AO account at TIN website. For correction Form 24G accepted at TIN central system, an online acknowledgement containing a 15 digit token number is generated and displayed to the AO. The format of the acknowledgement is identical to the one issued by the TIN-FC. There is no need to submit SSR and provisional receipt of original form 24G in online upload. 3. For FAQs and further details, AOs are advised to log on TIN website www.tin- nsdl.com ****** Furnishing of Monthly Form No. 24G Statements by Pay and Accounts Officers (PAOs)/District Treasury Officers (DTOs)/Cheque Drawing and Disbursing Officers(CDDOs) 1. Under what income tax rule should Form 24G be filed? Income-tax Department Notification no. 41....
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.... to the jurisdictional CIT (TDS). Complete and correct AIN application forms will be forwarded by the jurisdictional CIT (TDS) to NSDL e- Governance Infrastructure Limited (NSDL), Times Tower, 1st Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400013 recommending allotment of AIN to the PAO / CDDO / DTO. 6. What information should be submitted through Form 24G? Every AO should furnish one complete, correct and consolidated Form 24G every month having details of each type of deduction / collection separately viz. TDS-Salary / TDS-Non Salary / TDS-Non Salary Non Residents / TCS made by each DDO under his jurisdiction. 7. Where should Form 24G be submitted? Form 24G is to be furnished only in electronic form in a CD/pen drive at TIN-FCs or online through AO Account at www.tin-nsdl.com web portal. The facility to submit Form No. 24G online is available free of cost. Provisional Receipt Number (PRN) is issued as an acknowledgement of the receipt of Form 24G. 8. How to register for online facility? Registration for AO Account is mandatory for filing Form No. 24G online through TIN website, www.tin-nsdl.com. Registration AO Account is required o....
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....hrough File Validation Utility), duly signed by the AO. The list of TIN-FCs is available at TIN or ITD website. Once Form 24G is accepted by the TIN-FC, it will issue a provisional receipt with a unique Provisional Receipt Number (PRN) to the AO as a proof of submission of the statement. 14. What is Form 24G Preparation Utility? The Form 24G Preparation Utility is a Java based utility. Form 24G Preparation Utility can be freely downloaded from www.tin-nsdl.com. After downloading, it needs to be saved on the local disk of the machine. JRE (Java Run-time Environment) [versions: SUN JRE: 1.4.2_02 or 1.4.2_03 or 1.4.2_04 or IBM JRE: 1.4.1.0] should be installed on the computer where Form 24G Preparation Utility is being installed. JRE is freely downloadable from http://java.sun.com and http://www.ibm.com/developer works/java/jdk or you can ask your computer vendor (hardware) to install the same for you. Form 24G Preparation Utility can be executed on Windows platform(s) Win 2K Prof. / Win 2K Server/ Win NT 4.0 Server/ Win XP Prof. To run the 'Form 24G Preparation Utility', click on the '24GRPU.bat' file. If JRE is not installed on the computer, then on....
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....d file (b) Form 24G statement Statistics Report and (c) Form 24G. Every Form 24G (upload file) mentioned at Sr. No. (a) is to be saved in CD and the same should be accompanied with the Statement Statistic Report mentioned at Sr. No. (b), in paper form duly signed by the Accounts Officer, which needs to be submitted at TIN-FCs. Form 24G: Form 24G, at serial number (c) above, is a reader friendly format of TDS/TCS Book Adjustment form. This is like the physical form of Form 24G in html format. It contains all the details of Accounts Officer as well as Drawing and Disbursement Officer. There is no need to submit this file. 18. Can the Form 24G Statement be corrected? Every Form 24G is to be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD). If it does not confirm to the new data structure it will be rejected by TIN. As per procedure, statements relating to Form 24G should be complete and correct. No fragmented statements are expected to be filed (i.e. separate statements giving details for deductions under different form type with respect to the same AIN, FY and month). However, any mistake made in an original accepted st....
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....on statement is to be furnished by AO if it wishes to cancel an existing Form 24G statement. Filing of Correction type X will allow AOs to file regular Form 24G for the same primary key (AIN, Financial year and Month). This type of correction is to be filed only if the Form 24G has been filed with wrong AIN, F.Y. or Month. 22. What is BIN? BIN stands for 'Book Identification Number' for each form type mentioned in the accepted monthly form No. 24G. BIN consists of the following: (i) Receipt Number: Receipt number is a seven digit unique number generated on successful acceptance of Form 24G. (ii) DDO Serial Number: It is a five digit unique number generated for every DDO transaction reported in Form 24G statement. (iii) Transfer Voucher Date: It is the last date of month for which Form 24G statement is filed. BIN is required to be disseminated to the respective DDOs who in turn are required to report the same in the TDS/TCS Statement. The quoting of BIN has been made mandatory w.e.f 01st February, 2012. BIN is a unique number to verify the claim of TDS deposited without production of challan. As it is a verification key, it is advised that valid BIN dissemi....
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....is not a valid scenario. The DDOs and respective AOs are advised to reconcile the issue and one DDO should be mapped to one AO only for a particular form type for a particular month. 28. What are the duties of PAOs/DTOs/CDDOs? i. To apply for AIN with jurisdictional TDS office. AIN application can be downloaded from TIN site. ii. To obtain correct TAN from the reporting DDOs. iii. To file Form No. 24G (in CD, DVD, Pen Drive), within 10 days from the end of the month, electronically either at TIN-FC or by direct online upload at TIN website. iv. To track status of the filed Form No. 24G through TIN website. v. To download Book Identification Number (BIN) generated on the basis of 24G statement. vi. To disseminate BIN to the respective DDOs. 29. What are the duties of DDOs? i. To provide correct TAN to their PAOs/DTOs/CDDOs to whom the DDO/Deductor reports the tax so deducted & who is responsible for crediting such sum to the credit of the Central Government. ii. To report to PAOs/DTOs/CDDOs, the details of tax deducted and credited to the Central Government account through book adjustment. iii. To quote BIN in the quarterly TDS/TCS Statement (24Q, 26....
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..... iv. Filing of TDS/TCS statement (24Q, 26Q etc) within the due date. v. To download Form 16/26A from TRACES website (www.tdscpc.gov.in) and timely issuance of the same to the deductees. 30. What are the consequences of non-quoting of BIN details in quarterly TDS/TCS statement? (a) BIN details and amount of TDS reported in the quarterly TDS/TCS Statement filed by the DDO will be matched with the details filed in Form No.24G filed by the PAO for verification purpose. (b) Any wrong information reported by the DDOs in TDS/TCS Statement may lead to mismatch due to which credit to the respective deductee will not be available in the deductee's Form 26AS. (c) Further details are available at TIN website www.tin-nsdl.com and ITD website www.incometaxindia.gov.in. 31. What is the format of Form 16/16A to be issued to the deductees? It is mandatory to download and generate the Form 16/16A from the TRACES portal only. Deductor is allowed to issue manually only part =B' of Form 16 for salary details. 32. Is there any scenario where the DDO is also required to obtain the AIN? Yes, if the deductor is in the capacity of CDDO and directly reports tax deductio....
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....ormation, PAN correction, add/update of challan information, add/update of salary detail, add/update/movement of deductee row etc. can be done in the statements filed by the deductors, with or without the digital signatures. For further details, kindly refer the matrix below: Default Summary View Personal Information Challan Correction (Unmatched, Matched Deductee + Deductee Movement PAN Correction (Annex.I) PAN Correction (Annex. II) Add Challan to statement Interest, Levy Payment Modify/ Add deductee rows Delete/ Add Salary Deducted Rows Online Correction (with digital signature, 2013-14 onwards) Y Y Y Y Y Y Y Y Y Online Correction (with digital signature, prior to 2013­14 onwards) Y Y Y N N Y Y N N Online Correction (without digital signature, 2013-14 onwards) Y N Y N N Y Y N N Online Correction Online Correction (withoutdigital signature, prior to 2013- 14 onwards) Y ....
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.... statement/return at the TIN-FC, an acknowledgement containing a unique 15 digit token number is provided to the Deductor/DDO. Deductor/DDO can view the status of paper statement/return on TIN website. 4. Procedure of furnishing of e-TDS statement/return online at TIN website: Deductor/DDO is required to procure Digital Signature Certificate (DSC) for online upload of e-TDS statement/return. After registration on TIN website, an authorization letter by the Deductor/DDO should be provided on the letterhe/shead of the organisation to NSDL. Once application is approved by NSDL, user ID is created and intimated to Deductor/DDO on their registered email ID provided at the time of registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN FC).Deductor/DDO can login with its user ID and DSSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token no. and 8 digit receipt number is generated and displayed. There is no need to submit physical form 27A in online upload. Deduct....
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....tral Government service. ii. In addition to the above pension account, each individual may also have a voluntary tier-II withdrawable account at his option. This option is given as GPF will be withdrawn for new recruits in Central government service. Government will make no contribution into this account. These assets would be managed through exactly the above procedures. However, the employee would be free to withdraw part or all of the 'second tier' of his money anytime. This withdrawable account does not constitute pension investment, and would attract no special tax treatment. iii. Individuals can normally exit at or after age 60 years for tier-I of the pension system. At the exit the individual would be mandatorily required to invest 40 percent of pension wealth to purchase an annuity (from an IRDA- regulated life insurance company). In case of Government employees the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. The individual would receive a lump-sum of the remaining pension wealth, which he/she would be free to utilize in any manner. Individuals would have the flexibilit....
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....sident's Police & Fire Services Medal for Gallantry -do- 14. President's Fire Services Medal for Gallantry -do- 15. President's Home Guards and Civil Defence Medal for Gallantry -do- 16. Home Guard and Civil Defence Medal for Gallantry -do- ( Notification no. 1156/F.No. 142/29/99-TPL) T.K. SHAH Director ANNEXURE IX MINISTRY OF FINANCE Department of Revenue Central Board of Direct Taxes New Delhi, the 29th January,2001 S.O.81(E)- In exercise of the powers conferred by sub-clause (i ) of clause 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 and for that purpose makes the following amendment in the notification of the Government of India in the Ministry of Finance, Department of Revenue (Central Board of Direct Taxes) number S.O.1048(E), dated the 24th November 2000, namely:- In the said notification, in the Table, against serial numbers 1,2 and 3 under column (3) relating to "Circumstances for eligibility" the words "to civilians" shall be omitted. (Notification No.22/F.No.142/29/99-TPL) T.K. SHAH....
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.... AND DEPOSITED IN THE CENTRAL GOVERNMENT ACCOUNT THROUGH BOOK ADJUSTMENT(The deductor to provide payment wise details of tax deducted and deposited with respect to the deductee) Sl.No Tax Deposited in respect of the deductee (Rs.) Book Identification Number (BIN) Receipt numbers of Form No.24G DDO serial number in Form No.24G Date of transfer voucher(dd/mm/yyyy) Status of matching with Form No. 24G Total(Rs.) II.DETAILS OF TAX DEDUCTED AND DEPOSITED IN THE CENTRAL GOVERNMENT ACCOUNT THROUGH CHALLAN (The deductor to provide payment wise details of tax deducted and deposited with respect to the deductee) Sl.No Challan Identification Number (CIN) Tax Deposited in respect of the deductee (Rs.) BSR Code of the Bank Branch Date on which tax deposited (dd/mm/yyyy) Challan Serial Number Status of matching with OLTAS Total(Rs.) Verification I,son/daughter of working in the capacity of (desi....
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.... g) Total amount of any other exemption under section 10 Rs... h) Total amount of exemption claimed under section 10 [2(a)+2(b)+2(c)+2(d)+2(e)+2(g)] 3. Total amount of salary received from current employer [1(d)-2(h)] Rs... 4. Less: Deductions under section 16 a) Standard deduction under section 16(ia) Rs... b) Entertainment allowance under section 16(ii) Rs... c) Tax on employment under section 16(iii) Rs... 5. Total amount of deductions under section 16 [4(a)+4(b)+4(c)] Rs... 6. Income chargeable under the head "Salaries" [(3+1(e)-51 Rs... 7. Add: Any other income reported by the employee under as per section 192(2B) Rs... a) Income (or admissible loss) from house property reported by employee offered for TDS Rs... b) Income under the head Other Sources offered for TDS ....
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....on(s) of Chapter VI-A Rs... Rs... Rs... 11. Aggregate of deductible amount under Chapter VI-A [10(d)+10(e)+10(f)+10(g)+10(h)+10(i) +10(j)+10(l)] Rs... 12. T otal taxable income (9-11) Rs... 13. Tax on total income Rs... 14. Rebate under section 87A, if applicable Rs... 15. Surcharge, wherever applicable Rs... 16. Health and education cess @ 4% Rs... 17. Tax payable (13+15+16-14) Rs... 18. Less: Relief under section 89(attach details) Rs... 19. Net tax payable (17-18) Rs... Verification I, son/daughter of working in the capacity of (designation) do hereby certify that the information given above is true, complete and correct and is based on the books of account, documents, TDS statements, and other available records. Place Date (Signature of person responsible for deduction of tax) Full Name : PART B (Annexure-II) I....
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....duction in respect of interest on deposits in savings account under section 80TTB Rs... Rs... Rs... h) Amount deductible under any other provision(s)of chapter VI-A section ... Rs... Rs... Rs... section ... Rs... Rs... Rs... section ... Rs... Rs... Rs... section ... Rs... Rs... Rs... section ... Rs... Rs... Rs... section ... Rs... Rs... Rs... Rs... Rs... Rs... i) Total of amount deductible under any other provision(s) of Chapter VI-A Rs... Rs... Rs... 9 . Aggregate of deductible amount under Chapter VI-A [8(a)+8(b)+8(c)+8(d)+8(e)+8(f)+8(g)+8(h)+8(i)] Rs... 10. Total taxable income (7-9) Rs... 11. Tax on total income Rs... 12. Rebate under section 87A, if applicable Rs... 13. Surcharge, wherever applicable Rs... 14. Health and ed....