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TMI BlogInstructions for deduction of tax at source from salary during financial year 1973-74 at the rates specified in Part III of First Schedule to Finance Bill, 1973X X X X Extracts X X X X X X X X Extracts X X X X ..... nnex I]. It is requested that pending the passing of the Finance Bill, 1973, deductions of tax from "salaries" may be made during financial year 1973-74 according to the rates in the said Schedule. Three typical examples of calculations are given in Annex II. 2. The substance of the main provisions in the law insofar as they relate to income from "salaries" on which tax is to be deducted at source during the financial year 1973-74 is given hereunder : (1) No tax will be deductible at source in any case unless the estimated salary income for the financial year exceeds Rs. 5,000. (2) While computing the taxable income, the disbursing officers should allow a deduction of the whole of the first Rs. 2,000, 50 per cent of the next Rs. 3,000 and 40 per cent of the balance of the qualifying amount of payments towards life insurance premia, contributions to provident fund, contributions for participation in the Unit-linked Insurance Plan, 1971 made under section 19(1)(cc) of the Unit Trust of India Act, 1963 and deposits in a 10-year Account or 15-year Account under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959. The qualifying amount of these items taken togeth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or during which the conveyance has been used for the purpose of employment Rs. 1. Taxpayers owning motor cars 200 2. Taxpayers owning motor cycles, scooters or other mopeds 75 3. Taxpayers other than those referred to at items (1) and (2) 50 In the case of taxpayers owning cars, motor cycles, scooters or other mopeds, the standard deduction is admissible only if the conveyance is registered in the employee's name and not in the name of any other person even though such employee may claim to have purchased it from his own funds. (Each employee claiming such deduction will furnish to the disbursing authority a certificate that the conveyance is registered in his own name.) The standard deduction of Rs. 50 per month is admissible to such of the salaried taxpayers who did not own any conveyance as also to those who own a bicycle or any other conveyance, not being a motor car, motor cycle, scooter or other moped; for such an employee to be eligible for this deduction, it is not necessary to establish that he had actually incurred any expenditure on travelling for the purpose of his employment. The deduction of the appropriate amount for expenditure should be allowed in cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but does not exceed Rs. 15,000 Rs. 500 plus 17 per cent of the amount by which the total income exceeds Rs. 10,000; (4) where the total income exceeds Rs. 15,000 but does not exceed Rs. 20,000 Rs. 1,350 plus 23 per cent of the Amount by which the total income exceeds Rs. 15,000; (5) where the total income exceeds Rs. 20,000 but does not exceed Rs. 25,000 Rs. 2,500 plus 30 per cent of the amount by which the total income exceeds Rs. 20,000; (6) where the total income exceeds Rs. 25,000 but does not exceed Rs. 30,000 Rs. 4,000 plus 40 per cent of the amount by which the total income exceeds Rs. 25,000; (7) where the total income exceeds Rs. 30,000 but does not exceed Rs. 40,000 Rs. 6,000 plus 50 per cent of the amount by which the total income exceeds Rs. 30,000; (8) where the total income exceeds Rs. 40,000 but does not exceed Rs. 60,000 Rs. 11,000 plus 60 per cent of the amount by which the total income exceeds Rs. 40,000; (9) where the total income exceeds Rs. 60,000 but does not exceed Rs. 80,000 Rs. 23,000 plus 70 per cent of the amount by which the total income exceeds Rs. 60,000; (10) where the total income exceeds Rs. 80,000 but does not exceed Rs. 1,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 9,500 2. Contributions to general provident fund 720 3. Payment towards life insurance premia 500 1,220 [The employee does not own a motor car, motor cycle, scooter or other moped.] 4. Total salary income 9,500 5. Deduct : Standard deduction in respect of expenditure on traveling at Rs. 50 p.m. 600 8,900 6. Deduct : Whole of the qualifying contributions towards general provident fund and life insurance premia 1,220 7. Taxable income 7,680 8. Income-tax payable on Rs. 7,680 i.e., at 10 per cent on Rs. 2,680 268.00 9. Union surcharge at 10 per cent on income-tax 26.80 10. Total tax payable 294.80 Rounded off to 295.00 Example II 1. Total salary income 18,325 2. Contributions to general provident fund 1,200 3. Payment towards life insurance premia 1,600 [The employee has a scooter registered in his name and uses it for the purpose of employment. He was on leave from 5th August to 3rdOctober during the year.] 2,800 4. Total salary income 18,325 5. Deduct : Standard deduction at Rs. 75 p.m. for 11 months (since he was on leave for the full calendar month of September, no standard deduction is admissible for one month; full deduction wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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