9911796707
TMI BlogSection 192 of the Income-tax Act, 1961 - Deduction of tax at source - Salaries - Income-tax deduction from salaries during the financial year 2003-2004 under section 192X X X X Extracts X X X X X X X X Extracts X X X X ..... rates : Rates of Income-tax 1. Where the total income does not exceed Rs. 50,000. Nil 2. Where the total income exceeds Rs. 50,000 but does not exceed Rs. 60,000. 10 per cent, of the amount by which the total income exceeds Rs. 50,000. 3. Where the total income exceeds Rs. 60,000 but does not exceed Rs. 1,50,000. Rs. 1,000 plus 20 per cent of the amount by which the total income exceeds Rs. 60,000. 4. Where the total income exceeds Rs. 1,50,000. Rs. 19,000 plus 30 per cent of the amount by which the total income exceeds Rs. 1,50,000. Surcharge on income-tax : The amount of income-tax computed in accordance with the preceding provisions of this paragraph shall be reduced by the amount of rebate of income-tax calculated under Chapter VIII and the income-tax so reduced shall be increased by a surcharge at the rate of ten per cent of such income-tax where the total income exceeds eight hundred and fifty thousand rupees. However, the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-taxon a total income of Rs. 8,50,000 by more than the amount of income that exceeds Rs. 8,50,000. Surcharge is payable by both resident and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of section 192 deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the taxpayer 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 Salary 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 employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer). 3.5 Relief when salary paid in arrear or advance - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided to him and the value thereof in such form and manner as may be prescribed (Annexure III-A & B). These forms are required to be filed by the employee along with the Return of Income for the relevant year. 3.7 Conditions for claim of deduction of interest on borrowed capital for computation of income from house property - (i) For the purpose of computing income/loss under the head Income from house property in respect of a self-occupied residential house, a normal deduction of Rs. 30,000 is allowable in respect of interest on borrowed capital. However, a deduction on account of interest up to a maximum limit of Rs. 1,50,000 is available if such loan has been taken on or after 1-4-1999 for constructing or acquiring the residential house and the construction or acquisition of the residential unit out of such loan has been completed within three years from the end of the financial year in which capital was borrowed. Such higher deduction is not allowable in respect of interest on capital borrowed for the purposes of repairs or renovation of an existing residential house. To claim the higher deduction in respect of interest upto Rs. 1,50,000, the employee should furnish a certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e employee, tax on the amount so paid shall be deducted by the trustees of the Fund to the extent provided in rule 6 of Part B of the Fourth Schedule to the Act. 3.11 Salary paid in foreign currency - For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the prescribed rate of exchange. Persons responsible for deducting tax and their duties 4.1 Under clause (i) of section 204 of the Act the persons responsible for paying for the purpose of section 192 means the employer himself or if the employer is a Company, the Company itself including the Principal Officer thereof. 4.2 The tax determined as per para 7 should be deducted from the salary under section 192 of the Act. 4.3 Deduction of tax at lower rate - Section 197 enables the taxpayer to make an application in Form No. 13 to his Assessing Officer, and, if the Assessing Officer is satisfied that the total income of the taxpayer justifies the deduction of income-tax at any lower rate or no deduction of income-tax, he may issue an appropriate certificate to that effect which should be taken into account by the Drawing and Disbursing Officer while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. In the case of employees receiving salary income including pension, the certificate has to be issued in Form No. 16 which has been prescribed under Boards Notification No. S.O. No. 1062(E), dated 4-10-2002. It is, however, clarified that there is no obligation to issue the TDS certificate (Form 16) in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions. As per the amended section 192, the responsibility of providing correct and complete particulars of perquisites or profits in lieu of salary given to an employee is placed on the person responsible for paying such income i.e., the person responsible for deducting tax at source. The form and manner of such particulars as prescribed in Rule 26A, Form No. 12BA and Form No. 16 of the Income-tax Rules as amended by notification No. S.O. No. 1062(E), dated 4-10-2002 (copy enclosed as Annexures III-A & III-B). Information relating to the nature and value of perquisites is to be provided by the employer in Form No. 12BA in case of salary above Rs. 1,50,000. In other cases, the information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 206 of the Income-tax Act, 1961. 4.8 Annual return of TDS - According to the provisions of section 206 of the Income-tax Act, read with rules 36A and 37 of the Income-tax Rules, the prescribed person in the case of every office of Government, the principal officer in the case of every company, the prescribed person in the case of every local authority or other public body or association, every private employer and every other person responsible for deducting tax under section 192, from Salaries shall, after the end of each financial year, prepare and deliver, by 30th June following the financial year, an annual return of deduction of tax to the designated/concerned Assessing Officer. This return has to be furnished in Form No. 24. It may be noted that a copy of each of the TDS certificates issued during the financial year should be enclosed with the annual return. If a person fails to furnish in due time the annual return, he shall 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, so, however, that this sum shall not exceed the amount of tax which was deductible at source. 4.9 A return file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the task of payment of pensions. Further all branches of the banks are bound under section 203 to issue certificate of tax deducted in Form No. 16 to the pensioners also vide CBDT Circular No. 761, dated 13-1-1998. 4.12 Important circulars - Where non-residents are deputed to work in India and taxes are borne by the employer, if any refund becomes due to the employee after he has already left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it : Circular No. 707, dated 11-7-1995. 4.13 TDS certificates issued by Central Government departments which are making payments by book adjustment, should be accepted by the Assessing Officers if they indicate that credit has been effected to the Income-tax Department by book adjustment and the date of such adjustment is given therein. In such cases, the Assessing Officers may not insist on details like challan numbers, dates of payment into Government Account etc., but they should in any case satisfy themselves regarding the genuineness of the certificates produced before them : Circular No., 747 dated 27-12-1996. 4.14 There is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of the term profit in lieu of salary has been amended so as not to include interest on contributions or any sum received under a Keyman Insurance Policy including the sum allocated by way of bonus on such policy. For the purposes of this sub-clause, the expression Keyman Insurance Policy shall have the meaning assigned to it in clause (10D) of section 10. 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 from the commuted portion of pension as explained in clause (3) of para 5.2 of this Circular. (4) Section 17 defines the terms salary, perquisite and profits in lieu of salary. Perquisite includes: (a) The value of rent free accommodation provided to the employee by his employer; (b) The value of any concession in the matter of rent in respect of any accommodation provided to the employee by his employer; (c) The value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases: (i) By a company to an employee who is a director of such company; (ii) By a company to an employee who has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that medical allowances and reimbursement for treatment of serious illness as prescribed in the proviso below section 17(2)(vi) have now been excluded from the definition of salary for this purpose. For furnished accommodation, the provision of valuation of perquisite of furnishing, fittings and furniture at 10 per cent of original cost per annum or actual hire charges is continued. In case of employer other than Central and State Government, where accommodation is taken on lease or rent by employer, actual amount of lease rental paid or payable by the employer or 10 per cent of salary whichever is lower, as reduced by the rent, if any, actually paid by the employee, is taken as perquisite. If an accommodation is provided by an employer in a hotel the value of the benefit in such a case shall be 24 per cent of the annual salary or the actual charges paid or payable to such hotel, whichever is lower, for the period during which such accommodation is provided as reduced by any rent actually paid or payable by the employee. However, where in cases the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on transfer from one place to another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any) are reimbursed to him by the employer and such reimbursement is for the use of the vehicle partly for official and partly for personal or private purposes, the value of perquisite shall be the actual amount of expenditure incurred by the employer as reduced by the amounts specified in column (1) of the Table below. (d) Where the motor car is owned or hired by the employer and is used partly in the performance of his duties and partly for personal or private purposes, the value of perquisite shall be determined as per the Table below : Small car (upto 1.6 ltrs. engine capacity) Large car (above 1.6 ltrs. engine capacity) If chauffeur provided by employer to run the motor car, an additional amount as below is also charged (i) Car owned/hired by employer and expenses on maintenance and running are met or reimbursed by the employer Rs. 1200 per month Rs. 1600 per month Rs. 600 per month (ii) Car owned/hired by employer but the expenses on running and maintenance for such private or personal use are fully met by the employee. Rs. 400 per month Rs. 600 per month Rs. 600 per month (e) However, where a second or additional cars are provided, such other cars sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the employer. Under the new rules 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 may be running, maintaining or directly or indirectly financing the educational institution. Any amount paid by the employee for such facilities or services shall be reduced from the above amount. However, where such educational institution itself is maintained and owned by the employer or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality if the cost of such education or such benefit per child exceeds Rs. 1000 p.m. VI. Free or concessional journeys : The perquisite value of free or concessional journeys provided by an employer engaged in carriage of passengers or goods shall be taken as the value at which such benefit or amenity is offered by such undertaking to the public, as reduced by any amount actually paid by the employee. The conveyance may be owned, leased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uniformly to all classes of employees would remain exempt. IX. Free meals : The provision of free meals varies widely from uniform canteen food, coupons etc. to lavish hotel meals. The scheme of free meals as a staff welfare measure had been recognized and was admissible up to Rs. 35 for each meal. The new rule does not treat as perquisite free meals if the cost per meal does not exceed Rs. 50. Where any amount is recovered from the employee, such amount shall be reduced from the value of perquisite. Such free or subsidised meal should however be provided at office premises or though non-transferable vouchers meant for only meals during working hours. These vouchers should be provided by employers encashable only at an eatery, restaurant or a cafe. Tea or similar non-alcoholic beverages and snacks - in the form of light refreshments during working hours are not charged as perquisite. Also, arrangements for meals in remote areas as prescribed in para 5.1(I) and similar off-shore sites as specified, shall be exempt. However, expenditure on provision of free meals by the employer in excess of Rs. 50 should be treated as perquisite, as reduced by recoveries made from the employee. X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered from the employee for such use. However, the user of Computers and Laptops would not give rise to any perquisite. XIii. Transfer of assets : Often an employee or member of his household benefits from the transfer of movable asset (not being shares or securities) at no cost or at a cost less than its market value from the employer. The difference between the original cost of the movable asset (not being shares or securities) and the sum, if any, paid by the employee, shall be taken as the value of perquisite. In case of a movable asset, which has already been put to use, the original cost shall be reduced by a sum of 10 per cent of such original cost for every completed year of use of the asset. Owing to a higher degree of obsolescence, in case of computers and electronic gadgets, however, the value of perquisite shall be worked out by reducing 50 per cent 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice, or, after termination of service to any place in India is exempt under clause (5) of section 10 subject, however, to the conditions prescribed in rule 2B of the Income-tax Rules, 1962. 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 travel. (2) Death-cum-retirement gratuity or any other gratuity which is exempt to the extent specified from inclusion in computing the total income under clause (10) of section 10. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er company; (c) An authority established under a Central, State or Provincial Act; (d) A local authority; (e) A co-operative 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 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. 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. The exemption of amount received under VRS has been extended to employees of the Central Government and State Government employees and employees of notified institutions having importance throughout India or any State or States. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t before excluding the house rent allowance or any portion thereof from the total income of the employee. Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measures that salaried employees drawing house rent allowance up to 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. (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 incurred for that purpose. (ii) Any allowance granted to an employee either to meet his personal expenses at the place of his posting or at the place he ordinarily resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 Income-tax Rules, 1962, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines as provided in rule 3A(1) of I.T. Rules, 1962 : In a case falling in sub-clause (ii) above, the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital. (c) premium paid by the employer in respect of medical insurance taken for his employees (under any scheme approved by the Central Government) or reimbursement of insurance premium to the employees who take medical insurance for themselves or for their family members (under any scheme approved by the Central Government); (d) reimbursement, by the emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n employment within the meaning of clause (2) of article 276 of the Constitution of India, leviable by or under any law, shall also be allowed as a deduction in computing the income under the head Salaries. 5.4 Deduction under Chapter VI-A of the Act - The following deductions under Chapter VI-A of the Act are available : (1) As per section 80CCC, where an assessee being an individual has in the previous year paid or deposited any amount 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 referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessees account, if any) as does not exceed the amount of ten thousand rupees in the previous year. Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate with reference to such amount shall not be allowed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dant is a person with severe disability, an amount of seventy-five thousand rupees shall be allowed as deduction subject to the specified conditions. The deduction under this section shall be allowed only if the following conditions are fulfilled : A. (i) the scheme referred to in clause (b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made; (ii) the assessee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability. However, if the dependant, being a person with disability, predeceases the assessee, an amount equal to the amount paid or deposited under sub-para (3)(b) above shall be deemed to be the income of the assessee of the previous year in which such amount is received by the assessee and shall accordingly be chargeable to tax as the income of that previous year. B. The assessee, claiming a deduction under this section, shall furnish a copy of the certificate i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking and Repeal) Act, 2002 (58 of 2002). (4) Under section 80E of the Act a deduction will be allowed in respect of repayment of 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 repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan : Provided that the amount which may be so deducted shall not exceed forty thousand rupees. (ii) The deduction specified above shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the loan referred to above together with interest thereon is paid by the assessee in full, whichever is earlier. For this purpose (a) approved charitable institution means an institution established for charitable purposes and notified by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Sports Fund to be set up by Central Govern-ment. (xvi) The national cultural fund set up by the Central Govern-ment. (xvii) The fund for technology development and application set up by the Central Government. (xviii)The national trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities. (6) 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 V). (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 section 80GG. (d) The assessee does not own : (i) any residential accommodation himself or by his spou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, being an individual, will be entitled to tax rebates under Chapter VIII of the Income-tax Act as given below : (1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the wife or husband 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 (8) herein below on the life of the individual, the wife or husband 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 Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his wife or children, insofar as the sum deducted does not exceed 1/5th of the salary. (4) Any contribution made : (a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies; (b) to any provident fund set up by the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tte, specify in this behalf. (11) 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. (12) Any subscription made to any such deposit scheme (not being a scheme the interest on deposits whereunder qualifies for deduction under section 80L), 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, deve-lopment or improvement of cities, towns and villages, or for both. (13) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under the head Income from house property (or which would, if it has not been used for assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14) Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee. It is clarified that any payment towards any development fees or donation or payment of similar nature does not qualify for rebate under these provisions. (15) Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company or by any public finance institution, which is approved by the Board. (16) Subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board for this purpose. (17) Total amount qualifying for rebate under section 88 - There is an overall limit of Rs. 1,00,000 invested in various items mentioned in sub-paras (1) to (16) of para 6, which qualifies for rebate under section 88. Out of this, amounts invested in items mentioned in sub-paras (1) to (14) can be up to a maximum of Rs. 70,000. Further, instalments paid towards purchase or construction of a residential house, as discussed in sub-para (13) would qualify for rebate only with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (as a computed before allowing the deductions under Chapter VIII) on his total income, with which he is chargeable for any assessment year, of an amount equal to one hundred per cent of such income-tax or an amount of twenty-thousand rupees, whichever is less. (20) Rebate to woman residents - Under section 88C, as inserted by Finance Act, 2000, an assessee, being a woman resident in India, and below the age of sixty-five years, at any time during the previous year, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under Chapter VIII) on her total income, with which she is chargeable for any assessment year, of an amount equal to hundred percent, of such income-tax or an amount of five thousand rupees, whichever is less. (21) DDOs to satisfy themselves of the genuineness of claim - The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/subscriptions/payments made by the employees, by calling for such particulars/information as they deem necessary before allowing the aforesaid rebate. In case the DDO is not satisfied about the genuineness of the employees claim regarding any deposit/subscripti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be contacted. 8.3 These instructions may be brought to the notice of all Disbursing Officers and Undertakings including those under the control of the Central/State Governments. Annexure I For assessment year 2004-05 Example 1 Calculation of income-tax in the case of an employee having gross salary income of : (i) Rs. 1,00,000 (ii) Rs. 6,00,000 and (iii) Rs. 9,00,000 Particulars (Rupees) (Rupees) (Rupees) (i) (ii) (iii) Gross salary income 1,00,000 6,00,000 9,00,000 (Including allowances) Contribution to G.P.F. 10,000 20,000 30,000 Computation of total income and tax payable thereon Gross Salary 1,00,000 6,00,000 9,00,000 Less : Standard Deduction u/s 16(i) 30,000 20,000 20,000 Taxable Income 70,000 5,80,000 8,80,000 Tax thereon 3,000 1,48,000 2,38,000 Less : Tax rebate u/s 88 3,000 Nil Nil Income tax payable Nil 1,48,000 2,38,000 Add : Surcharge Nil 23,800 Total Tax payable Nil 1,48,000 2,61,800 Example 2 Calculation of Income-tax in the case of assessee having handicapped dependent. Particulars (Rupees) 1. Gross Salary 3,20,000 2. Amount spent on treatment of a dependent, being person with disability (but no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alary Income 1,03,980 3. Less : House Rent Allowance exempt u/s 10(13A) : Least of a .Actual amount of HRA received = 9600 b .Expenditure of rent in excess of 10% of salary (including D.A. as presumed that D.A. is taken For retirement benefit) (18,000-9,318=8,682) c. 50% of Salary (+Basic) Rs. 46,590 8,682 95,298 Less : Standard deduction u/s 16(i) @ 40% or 30,000 whichever is less 30,000 Total income (rounded off) 65,300 Tax on total income 2,060 Rebate u/s 88 GPF 24,000 LIP 2,500 CTD 2,400 Subscription to Infrastructure Bonds u/s 88(2)(xvi) 10,000 Total 38,900 Rebate @ 30% 11,670 Tax on total income 2,060 Less : Tax Rebate restricted to Rs. 2,060 2,060 Tax Payable Nil Example 5 Illustrating valuation of perquisite and calculation of tax in the case of an employee of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months. Employee owns a car (cubic capacity of engine exceeds 1.6 ltr.) used partly for personal and partly for official work and actual running and maintenance charges including chauffeurs salary are reimbursed by employer, but no documents are mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereon (Rupees) 1. Gross salary 1,68,400 Less : House rent allowance exempt u/s 10(13A) a. Actual amount of HRA received 12,000 b. Expenditure on rent in excess of 10% of salary (including D.A.) as personal D.A. is including for retirement benefits 8,600) 8,600 c. 50% of salary (including D.A.) 77,000 (-) 8,600 Total salary income 1,59,800 Less : Standard Deduction 30,000 Total Taxable Income 1,29,800 Tax on total Income 14,960 Tax rebate u/s 88 i. Provident Fund 20,000 ii. LIP 10,000 iii. NSC VIII Issue 20,000 iv. Repayment of HBA 12,000 v. Subscription to eligible issue of Co. approved U/s 88(2)(xvi) 20,000 Total 82,000 Rebate @ 20% = 16,200 14,960 (restricted) Net Tax Payable Nil Example 7 Income-tax calculation in the case of an employee who claims loss under the head income from house property Particulars (Rupees) 1. Gross salary 4,00,000 2. Housing Loan repaid (Principal) 30,000 3. Interest payable on housing loan (Loan taken after 1-4-1999) 2,00,000 4. Donation paid to National Children Fund 5,000 5. NSC Purchased 10,000 6. GPF 20,000 Computation of taxable income and tax thereon (Rupees) 1. Sala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be entitled to rebate only under section 88B of the Act meant for Senior citizens and not under section 88C of the Act. Annexure II Form for sending particulars of income u/s 192(2B) for the year ending 31st March, 2002 1. Name and address of the employee 2. Permanent Account Number 3. Residential status 4. Particulars of income under any head of income other than salaries (not being a loss under any such head other than the loss under the head Income from house property) received in the financial year (i) Income from house property (in case of loss, enclose computation thereof) (ii) Profits and gains of business or profession (iii) Capital gains (iv) Income from other sources (a) Dividends (b) Interest (c) Other incomes (specify) Total 5. Aggregate of sub-items (i) to (iv) of item 4 6. Tax deducted at source (enclose certificates) issued under section 203 Place................ Date................. ....................................................... Signature of the employee Verification I,......................., do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today, the.......... ..... X X X X Extracts X X X X X X X X Extracts X X X X
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