Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

DEDUCTION OF TAX AT SOURCEINCOME-TAX DEDUCTION FROM SALARIES UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961

Income Tax - 01/2017 - Dated:- 2-1-2017 - For CORRIGENDUM to this circular see F. No. 275/192/2016-IT (B) dated 24-1-2017 F. No. 275/192/2016-IT(B) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ****** North Block, New Delhi Dated the 2nd January, 2017 SUBJECT : INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2016-17 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961. Reference is invited to Circular No.20/2015 dated 02.12.2015 whereby the rat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in. 2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2016 As per the Finance Act, 2016, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2016-17 (i.e. Assessment Year 2017-18) at the following rates: 2.1 Rates of tax A. Normal Rates of tax: Sl. No. Total Income Rate of tax .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

0/- plus 30 per cent of the amount by which the total income exceeds ₹ 10,00,000/- B. Rates of tax for every individual, 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 ₹ 3,00,000/- Nil 2 Where the total income exceeds ₹ 3,00,000 but does not exceed ₹ 5,00,000/- 10 per cent of the amount by which the total income exceeds & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l year: Sl. No. Total Income Rate of tax 1 Where the total income does not exceed ₹ 5,00,000/- Nil 2 Where the total income exceeds ₹ 5,00,000 but does not exceed ₹ 10,00,000/- 20 per cent of the amount by which the total income exceeds ₹ 5,00,000/- 4 Where the total income exceeds ₹ 10,00,000/- ₹ 1,00,000/-plus 30 per cent of the amount by which the total income exceeds ₹ 10,00,000/- 2.2 Surcharge on Income tax: The amount of income-tax computed in acco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

alculated at the rate of fifteen per cent of such income-tax Provided that in the case of persons mentioned above having total income 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 one crore rupees by more than the amount of income that exceeds one crore rupees. 2.3.1 Education Cess on Income tax: The amount of income-tax including the surcharge if any, shall be increased .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2016-17. The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to requirement to furnish PAN as per sec 206 AA of the Act, and shall be deducted at the time of each payment. No tax, however, will be required to be deducted at source in any case unless the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on such perquisites himself without making any TDS from the salary of the employee. However, the employer will have to pay the tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head "salaries" to the employee. 3.2.1 Computation of Average Income Tax: For the purpose of making the payment of tax mentioned in para 3.2 above, tax is to be determined at the average of income tax computed on the basis of rate in force for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

discussed in para 3.2 above. STEPS: Income Chargeable under the head "Salaries" inclusive of all perquisites ₹ 4,50,000/- Tax on Total Salary (including Cess) ₹ 20,600/- Average Rate of Tax [(20,600/4,50,000) X 100] 4.57% Tax payable on ₹ 50,000/= (4.57% of 50,000) ₹ 2285/- Amount required to be deposited each month ₹ 190 ((Rs. 190.40) =2285/12) The tax so paid by the employer shall be deemed to be TDS made from the salary of the employee. 3.3 Salary From .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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). 3.4 Relief When Salary Paid in Arrear or Advance: 3.4.1 Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under Section 3 of the University Grants Commission Act, 1956 to be a university for the purpose of that Act. 3.4.2 With effect from 1/04/2010 (AY 2010-11), no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

head other than "Salaries" ( not being a loss under any such head other than the loss under the head " Income from house property") received by the taxpayer for the same financial year and of any tax deducted at source thereon. The particulars may now be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under Rule 26B(2) of the Rules and shall be annexed to the simple statement. The form of verification is repr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom House Property, the DDO shall ensure that the employee files the declaration referred to above and encloses therewith a computation of such loss from house property. Following details shall be obtained and kept by the employer in respect of loss claimed under the head " Income from house property" separately for each house property: (a) Gross annual rent/value (b) Municipal Taxes paid, if any (c) Deduction claimed for interest paid, if any (d) Other deductions claimed (e) Address o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y which is owned and is in the occupation of the employee for his own residence. However, if it is actually not occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him. (ii) the quantum of deduction allowed as per table below: Sl. No. Purpose of borrowing capital Date of borrowing capital Maximum Deduction allowable 1. Repair or renewal or reconstruction of the house Any time ₹ 30,0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hich deduction is claimed either from the builder or through self-declaration from the employee. (b) Further any prior period interest for the FYs upto the FY in which the property was acquired or 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 o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l year itself. 3.8 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 "Telegraphic transfer buying rate" of such currency as on the date on which tax is required to be deducted at source ( see Rule 26). 4. PERSONS RESPONSIBLE FOR DEDUCTING TAX AND THEIR DUTIES: 4.1. As per Section 204(i) of the Act, in the context of payments other than payments by the Central Governm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is the "persons responsible for paying" for the purpose of section 192. 4.2. The tax determined as per para 9 should be deducted from the salary u/s 192 of the Act. 4.3. Deduction of Tax at Lower Rate: If the jurisdictional TDS officer of the Taxpayer 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 Taxpayer; then the DDO should take into account such certificate and deduct .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ernment: Sl. No. Description Time up to which to be deposited. 1 Tax deposited without Challan [Book Entry] SAME DAY 2 Tax deposited with Challan 7TH DAY NEXT MONTH 3 Tax on perquisites opt to be deposited by the employer. 7TH DAY NEXT MONTH (b) In any case other than an Office of Government Sl. No. Description Time up to which to be deposited. 1 Tax deducted in March 30th APRIL NEXT FINANCIAL YEAR 2 Tax deducted in any other month 7TH DAY NEXT MONTH 3 Tax on perquisites opted to be deposited by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4.4.2.1 Compulsory filing of Statement by PAO, Treasury Officer, etc in case of payment of TDS by Book Entry u/ s 200 (2A): In the case of an office of the Government, where tax has been paid to the credit of the Central Government without the production of a challan [Book Entry], the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called to whom the deductor reports about the tax deducted and who is responsible .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. If the PAO/CDDO/TO etc, as stated above, fails to deliver the statement as required u/s 200(2A), he will be liable to pay, by way of penalty, under se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le for filing Form No. 24G in case of State Govt. Departments is shown at Annexure V. The procedure of furnishing Form 24G is detailed in Annexure IV. PAOs/DDOs should go through the FAQs therein to understand the correct process to be followed. 4.4.2.2 Payment by an Income Tax Challan: (i) In case the payment is made by an income-tax challan, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it, within the time specified in Table in para 4.4.1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nk of India or to the State Bank of India or to any authorized bank, if the amount is remitted by way of: (a) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorized bank; or (b) debit card. {Notification No.41/2010 dated 31st May 2010} 4.5 Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted: 4.5.1 If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the date on which such tax is deducted; and (ii) at the rate of one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. Such interest, if chargeable, is mandatory in nature and has to be paid before furnishing of quarterly statement of TDS for respective quarter. 4.5.2 Section 271C inter alia lays down that if any person fails to deduct whole or any part of tax at source or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

shall be between 3 months and 7 years, along with fine. 4.6 Furnishing of Certificate for Tax Deducted (Section 203): 4.6.1 Section 203 requires the DDO to furnish to the employee a certificate in Form 16 detailing the amount of TDS and certain other particulars. Rule 31 prescribes that Form 16 should be furnished to the employee by 31st May after the end of the financial year in which the income was paid and tax deducted. Even the banks deducting tax at the time of payment of pension are requir .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of payment through bank. (*Challan identification number (CIN) means the number comprising the Basic Statistical Returns (BSR) Code of the Bank branch where the tax has been deposited, the date on which the tax has been deposited and challan serial number given by the bank. ) (d) Receipt numbers of all the relevant quarterly statements of TDS (24Q). The receipt number of the quarterly statement is of 8 digit. Further as per Circular 04/2013 dated 17-04-2013 all deductors (including Government de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

manually and issued to the deductee after due authentication and verification along with the Part A of the Form No. 16. It may be noted that under the new TDS procedure, TAN of deductee/ PAN 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 decutee. Hence due care should be taken in filling these particulars. Due care should also be taken in indicating correct CIN/ BIN in TDS statement. If the DDO fails to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es 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 Register in the Traces portal. Form 16/16A issued to deductees should mandatorily be generated and downloaded from the TRACES portal]. Certain essential points regarding the filing of the Statement and obtaining TDS certificat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in facilities have been provided to the deductors at website www.tdscpc.gov.in/ including online correction of statements (Form 24Q). (b) The employer should quote the gross amount of salary (including any amount exempt under section 10 and the deductions under chapter VI A) in column 321 (Amount paid/credited) of Annexure I of Form 24Q as per NSDL RPU (hereafter Return Preparation Utility). (c) The employer should quote the amount of salary excluding any amount exempt under section 10 in column .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lso. Example: Total Taxable Income Total Taxable Income (Rounded Off) TDS to be Deducted TDS Deducted/ Reported after rounding-off of income Short Deduction Rs.1350094 ₹ 1350090 ₹ 235028.20 ₹ 235027 Rs.1.20 4.6.2. If an assessee is employed by more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers and Part B may be issued by each o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 is being used to authenticate most of the e-transactions on the internet as transmission of information using digital signature is failsafe. It saves time specially in organisations having large number of employees where issuance of certificate of deduction of tax with manual signature is time consuming (Circular no 2 of 2007 dated 21 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

relating to the nature and value of perquisites is to be provided by the employer in Form 12BA in case salary paid or payable is above ₹ 1,50,000/-. In other cases, the information would have to be provided by the employer in Form 16 itself. 4.6.4.2 An employer, who has paid the tax on perquisites on behalf of the employee as per the provisions discussed in para 3.2 of this circular, shall furnish to the employee concerned, a certificate to the effect that tax has been paid to the Central .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

isite information will entail consequences thereof provided under the law. The certificates in Forms 16 and/or Form 12BA specified above, shall be furnished to the employee by 31st May of the financial year immediately following the financial year in which the income was paid and tax deducted. If he fails to issue these certificates to the person concerned, as required by section 192(2C), he will be liable to pay, by way of penalty, under section 272A(2)(i), a sum which shall be ₹ 100/- fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 certainity and uniformity in this matter, section 192(2D) provides that person resp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Act makes it obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax deduction and collection Account No (TAN) in the challans, TDS-certificates, statements and other documents. Detailed instructions in this regard are available in this Department's Circular No.497 [F.No.275/118/ 87-IT(B) dated 9.10.1987]. If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of ten tho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

with the return of income has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted. Tax deductors are, therefore, advised to procure and quote correct PAN details of all deductees in the TDS statements for salaries in Form 24Q. Taxpayers are also liable to furnish their correct PAN to their deductors. Non-furnishing of PAN by the deductee (employee) to the deductor (employer) will result in deduction of TDS at higher rates u/s 206AA of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the rate or rates in force; or (iii) at the rate of twenty per cent. 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 c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rly Statements of TDS in Form 24Q for the periods [details in Table below] of each financial year, to the TIN Facilitation Centres authorized by DGIT (System's) which is currently managed by M/s National Securities Depository Ltd (NSDL) or at www.incometaxindiaefiling.gov.in after registering as Deductor. Particulars of e-TDS Intermediary at any of the TIN Facilitation Centres are available at http://www.incometaxindia.gov.in and http://tin-nsdl.com portals. The requirement of filing an annu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ber 31st October 15th October 3 31st December 31st January 15th January 4 31st March 15th May 15th May 4.9.2 The statements referred above may be furnished in paper form or electronically under digital signature or alongwith verification of the statement in Form 27A of verified through an electronic process in accordance with the procedures, formats and standards specified by the Director General of Income‐tax (Systems). The procedure for furnishing the e-TDS/TCS statement is detailed at A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n section 200(3) in respect of tax deducted at source on or after 1.07.2012 he shall be liable to pay, by way of fee a sum of ₹ 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. 4.9.5 Rectification of mistake in filing TDS Statement: A DDO can also file a correction statement for rectification of any mista .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- but which may extend to ₹ 1,00,000/-. However, the penalty shall not be levied if the person proves that after paying TDS with the fee and interest, if any, to the credit of Central Government, he had delivered such statement before the expiry of one year from the time prescribed for delivering the statement. 4.9.7 At the time of preparing statements of tax deducted, the deductor is required to: (i) mandatory quote his tax deduction and collection account number (TAN) in the statement; ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nish particular of amounts paid or credited on which tax was not deducted in view of the issue of certificate of no deduction of tax u/s 197 by the assessing officer of the payee. 4.10 TDS on Income from Pension: In the case of pensioners who receive their pension (not being family pension paid to a spouse) from a nationalized bank, the instructions contained in this circular shall apply in the same manner as they apply to salary-income. The deductions from the amount of pension under section 80 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

anks, which have been entrusted with the task of payment of pensions. Further all branches of the banks are bound u/s 203 to issue certificate of tax deducted in Form 16 to the pensioners also vide CBDT circular no. 761 dated 13-1-1998. 4.11. Matters pertaining to the TDS made in case of Non Resident: 4.11.1 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 Ind .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

also be regarded as income earned in India. 5. COMPUTATION OF INCOME UNDER THE 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 d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

muneration, 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 DEFINITION OF "SALARY", "PERQUISITE" AND "PROFIT IN LIEU OF SALARY" (SECTION 17): 5.2.1 "Salary" includes:- i. wages, fees, commissions, perquisites, profits in lieu of, or, in addition to salary, advance of salary, annuity or pension, gratuity, payments in respect of encashment of leave etc. ii. the portion of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

01-09-2010 rate is fixed at 9.5% - Notification No SO 1046(E) dated 13-5-2011] iii. the contribution made by the Central Government or any other employer to the account of the employee under the New Pension Scheme as notified vide Notification F.N. 5/7/2003- ECB&PR dated 22.12.2003 (enclosed as Annexure VII) referred to in section 80CCD (para 5.5.3 of this Circular). It may be noted that, since salary includes pension, tax at source would have to be deducted from pension also, unless otherw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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: (i) By a company to an employee who is a director of such company; (ii) By a company to an employee who has a substantial interest in the company; (iii) By an employer (including a company)to an employee, who is not c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee. V. Any sum payable by the employer, whether directly or through a fund, other than a recognized provident fund or an approved superannuation fund or other specified funds u/s 17, to effect an assurance on the life of an assessee or to effect a contract for an annuity. VI. The value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate to the employee and for this p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the nature of intellectual property rights or value additions, by whatever name called; (c) the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from the assessee in respect of such security or shares; (d) "fair market value" means the value determined in accordan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

valuation of such benefit or amenity as given in Rule 3 are as under:- I. Residential Accommodation provided by the employer [Rule 3(1)]: "Accommodation" includes a house, flat, farm house or part thereof , hotel accommodation, motel, service apartment, guest house, a caravan, mobile home, ship or other floating structure. A. For valuation of the perquisite of rent free unfurnished accommodation, all employees are divided into two categories: (i) For employees of the Central and State .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

scribed rates, as discussed below: (a) Where the accommodation provided to the employee is owned by the employer: Sl. No. Cities having population as per the 2001 census Perquisite 1 Exceeds 25 lakh 15% of salary 2 Exceeds 10 lakhs but does not exceed 25 lakhs 10% of salary 3 For other places 7.5 % of salary (b) Where the accommodation so provided is taken on lease/ rent by the employer: The prescribed rate is 15% of the salary or the actual amount of lease rental payable by the employer, whiche .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me called). 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 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 days and thereafter the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that where the accommodation is provided by the Central Government or any State Government to an employee who is serving on deputation with any body or undertaking under the control of such Government,- (i) the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and (ii) the value of perquisite of such an accommodation shall be the amount calculated in accordance with Table in A(ii)(a) above, as if the accommodation is owned b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s are satisfied : 1. The hotel accommodation is provided for a total period not exceeding in aggregate 15 days in a previous year, and 2. Such accommodation is provided on an employee's transfer from one place to another 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 perquisi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ccommodation is located in a "remote area" or (ii) where it is not located in a "remote area", the accommodation is of a temporary nature having plinth area of not more than 800 square feet and should not be located within 8 kilometers of the local limits of any municipality or cantonment board. A project execution site here means a site of project up to the stage of its commissioning. A "remote area" means an area located at least 40 kilometers away from a town hav .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use (in case the motor car is exclusively for private or personal purposes of the employee or any member of his household). (c) ₹ 1800/- (plus ₹ 900/-, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly for private or personal purposes of the employee or any member of his household i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

his household if the expenses on maintenance and running of motor car for such private or personal use are fully met by the employee). However, the value of perquisite will be ₹ 900/- (plus ₹ 900/-, if chauffeur is also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres. (2) If the motor car or any other automotive conveyance is owned by the employee but the actual running and maintenance charges are met or reimbursed by the employer, the method .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

official purposes; ♦ The employer gives a certificate that the expenditure was incurred wholly for official duties. However if the motor car is used partly for official or partly for private purposes then the amount of perquisite shall be the actual expenditure incurred by the employer as reduced by the amounts in c) referred to in (1) above. Normal wear and tear of the motor shall be taken at 10 % per annum of the actual cost of the motor car. III Personal attendants etc. [Rule 3(3)]: The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

[Rule 3(4)]: The value of perquisite in the nature of gas, electricity and water shall be the amount paid by the employer. 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. V Free or concessional education [Rule 3(5)]: Perquisite on account of free or concessional educati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nstitution in or near the locality if the cost of such education or such benefit per child exceeds ₹ 1000/- p.m. The value of perquisite shall be reduced by the amount, if any, paid or recovered from the employee. VI Carriage of Passenger Goods [Rule 3(6)]: The value of any benefit or amenity resulting from the provision by an employer, who is engaged in the carriage of passengers or goods, to any employee or to any member of his household for personal or private journey free of cost or at .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is common practice, particularly in financial institutions, to provide interest free or concessional loans to employees or any member of his household. The value of perquisite arising from such loans would be the excess of interest payable at prescribed interest rate over interest, if any, actually paid by the employee or any member of his household. The prescribed interest rate would now be the rate charged per annum by the State Bank of India as on the 1st day of the relevant financial year in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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. VIII Perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed by the employer for any holiday avai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. If a holiday facility is maintained by the employer and is available uniformly to all employees, the value of such benefit would be exempt. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expendi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom the employee XXX XXX Balance amount is the taxable as perquisites on the value of food provided to the employees XXX Note : Exemption is given in following situations : 1. Tea/snacks provided in working hours. 2. Food & non-alcoholic beverages provided in working hours in remote area or in an offshore installation. X Membership fees and Annual Fees [Rule 3(7)(v)]: Any membership fees and annual fees incurred by the employee (or any member of his household), which is charged to a credit c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s 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. XI Club Expenditure [Rule 3(7)(vi)]: Any annual or periodical fee for Club facility and any expenditure in a club by the employee (or any member of his household), which is paid or reimbursed by the employer is taxable on the following basis: Amount of expenditure incurred by the employer XXX Less : E .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

official purpose. Note: (1) Health club, sport facilities etc. provided uniformly to all classes of employee by the employer at the employer's premises and expenditure incurred on them are exempt. (2) The initial one-time deposits or fees for corporate or institutional membership, where benefit does not remain with a particular employee after cessation of employment are exempt. Initial fees / deposits, in such case, is not included. XII Use of assets [Rule 3(7)(vii)]: It is common practice .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ransfer 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% of such original cost for every completed year of use of the asset. Owing to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rs, the value of perquisite shall be worked out by reducing 20% of its actual cost by the reducing balance method for each completed year of use. XIV Gifts [Rule 3(7)(iv)]: The value of any gift or vouchers or token in lieu of which such gift may be received, given by the employer to the employee or member of his household, is taxable as perquisite. However gift, etc less than ₹ 5,000 in aggregate per annum would be exempt. XV Medical Reimbursement by the employer exceeding ₹ 15,000/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the termination of his employment or the modification of the terms and conditions relating thereto; II. any payment (other than any payment referred to in clauses (10), (10A), (10B), (11), (12) (13) or (13A) of section 10 due to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions or any sum received under a Keyman insurance policy including .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 himself and his family, in connection with his proceeding (a) on 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xempt to the extent specified from inclusion in computing the total income under Section 10(10). Any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the sai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

377; 10 lakhs w.e.f. 24.05.2010 [Notification no. 43/2010 S.O. 1414(E) F.No. 200/33/2009- ITA-1 dated 11th June 2010]. 5.3.3 Any payment in commutation of pension received under the Civil Pensions (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 posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of pension from a fund referred to in section 10(23AAB) is exempt under section 10(10A)(iii). 5.3.4 Any payment received by an employee of the Central Government or a State Government, as cash-equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement, whether on superannuation or otherwise, is exempt under Section 10(10AA)(i). In the case of other employees, this exemption will be determined with reference to the leave to their credit at .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e maximum amount of retrenchment compensation exempt is the sum calculated on the basis provided in section 25F(b) of the Industrial Disputes Act, 1947 or any amount not less than ₹ 50,000/- as the Central Government may by notification specify in the Official Gazette, whichever is less. These limits shall not apply in the case where the compensation is paid under any scheme which is approved in this behalf by the Central Government, having regard to the need for extending special protecti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

emes of voluntary retirement or in the case of public sector company, a scheme of voluntary separation, is exempt from income-tax to the extent that such amount does not exceed ₹ 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 Univ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

out India or any State or States. It may also be noted that where this exemption has been allowed to any employee for any assessment year, it shall not be allowed to him for any other assessment year. Further, if relief has been allowed under section 89 for any assessment year in respect of amount received on voluntary retirement or superannuation, no exemption under section 10(10C) shall be available. 5.3.7 Any sum received under a Life Insurance Policy (Sec 10(10D), including the sum allocated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

insurance policy issued on or after 1.4.2012 in respect of which the premium payable for any of the years during the term of the policy exceeds 10 percent of the actual capital sum assured; or (v) any sum received under an insurance policy issued on or after 1.4.2013 in cases of persons with disability or person with severe disability as per Sec 80U or suffering from disease or ailment as specified in Sec 80DDB, in respect of which the premium payable for any of the years during the term of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from Income-tax to the extent as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations. According to Rule 2A of the Rules, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

; or (ii) where such accommodation is situated in any other places, 40% of the salary due to the employee for the relevant period. 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 exemptio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, it has been decided as an administrative measure that salaried employees drawing house rent allowance upto ₹ 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 paymen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lly, necessarily and exclusively 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 resides or to compensate him for the increased cost of living, which may be prescribed and to the extent as may be prescribed. However, the allowance referred to in (ii) abov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

34/99- TPL). The transport allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of duty is exempt to the extent of ₹ 1600 p. m. or ₹ 3200 p.m. (for a person who is blind or deaf and dumb or is orthopaedically handicapped with disabilities of lower extremes) vide notification S.O.No. 395(E) dated 13.05.98 r/w S.O. No. 1002 (E) dated 13.04.2015 & S.O. No. 2604 (E) dated 23.09.2015. 5.3.11 Under Sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

called Deposit Scheme for Retiring Government Employees, 1989 for the purpose of the said clause. 5.3.12 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. 5.3.13 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&qu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

after satisfying himself about the veracity of the claim. 5.3.14 Under Section 17 of the Act, exemption from tax will also be available in respect of:- (a) the value of any medical treatment provided to an employee or any member of his family, in any hospital maintained by the employer; (b) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or of any member of his family: (i) in any hospital maintained by the Government or any l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce Regulatory and Development Authority) 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 or Insurance Regulatory and Development Authority); (d) reimbursement, by the employer, of the amount spent by an employee in obtaining medical treatment for himself or any member of his family from any doctor, not exceeding in the aggregate ₹ 15,000/- in an year; (e) As re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

before including the said expenditure, does not exceed ₹ 2 lakhs. For the purpose of availing exemption on expenditure incurred on medical treatment, "hospital" includes a dispensary or clinic or nursing home, and "family" in relation to an individual means the spouse and children of the individual. Family also includes parents, brothers and sisters of the individual if they are wholly or mainly dependent on the individual. It is pertinent to mention that benefits speci .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n with transfer, packing and transportation of personal effects o such transfer shall be exempt. Also any allowance, whether, granted for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence form his normal place of duty shall be exempt. 5.4 DEDUCTIONS U/S 16 OF THE ACT FROM THE INCOME FROM SALARIES 5.4.1 Entertainment Allowance [Section 16(ii)]: A deduction is also allowed under section 16(ii) in respect of any allow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

276(2) 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". It may be clarified that "Standard Deduction" from gross salary income, which was being allowed up to financial year 2004-05 is not allowable from financial year 2005-06 onwards. 5.5 DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT In computing the taxable income of the employee, the following deductions under Chapter VI-A of the A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

life of the individual, the spouse or any child of the individual. (2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity; (3) Any sum deducted from the salary .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children; [The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E) dated 3.11.05] (c) by an employee to a Recognized Provident Fund; (d) by an employee to an approved superannuation fund; It may be noted that "contribution" to any Fund shall not include any sums in repayment of loan or advance; (5) Any sum paid o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch 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 3.11.05and National Saving Certificate (IXth Issue) vide Notification . G.S.R. 848 (E), dated the 29th November, 2011, publishing the National Savings Certificates (IX-Issue) Rules, 201 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 10 (23D) and as notified by the Central Government. [The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No. 1561(E) dated 3.11.05.] (7) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify; [The Central Government has since notified New .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntral 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] The investments made after 1.4.2006 in plans formulated in accordance with Equity Linked Saving Scheme, 1992 or Equity Linked Saving Scheme, 1998 shall also qualify for deduction under section 80C. (9) Any contribution made by an individual to any pension fund s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction of a residential house property, the income from which is chargeable to tax under the head "Income from house property" (or which would, if it has not been used for assessee's own residence, have been chargeable to tax under that head) where such payments are made towards or by way of any instalment or part payment of the amount due under any self-financing or other scheme of any Development Authority, Housing Board etc. The deduction will also be allowable in respect of re-p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ity, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act. The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t is also clarified that full-time education includes play-school activities, pre- nursery and nursery classes. It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature. (14) Subscription to equity shares or debentures forming part of any eligible issue of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

entral Government, in the Official Gazette for these purposes. [The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28.7.2006] (17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf. 18) (Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004. (1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sons 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 10(23AAB). However, the deduction shall exclude interest or bonus accrued or credited to the employee's account, if any and shall not exceed ₹ 1,50,000. However, if any amount is standing to the credit of the employee in the fund referred to above and deduction has been allowed as stated above and the employee or his nominee receives this amount together with the interest or bonus accrued or credited to this account due to the reason of- (i) Surrender of annuity plan whether in whol .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt (Section 80CCD): Section 80CCD(1) allows an employee, being an individual employed by the Central Government on or after 01.01.2004 or being an individual employed by any other employer, or any other assessee being an individual, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 National Pension System-NPS or as may be notifed by the Central Government. However, the de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hall be allowed whether or not any deduction is allowed under sub-section(1). However, the same amount cannot be claimed both under sub-section (1) and sub-section (1B) of section 80CCD. As per Section 80CCD(2), where any contribution in the said pension scheme is made by the Central 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 10% of his sa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

employee or his nominee for that Financial Year and accordingly will be charged to tax. Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C. Further it has been specified that w.e.f 01.04.09 any amount received by the employee from the New Pension Scheme shall be deemed not to have been received in the previous year if such amount is used for purchasing an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1,50,000/- provided under this section. 5.5.4 Deduction in respect of investment made under an equity savings scheme (Section 80 CCG): Section 80CCG provides deduction wef assessment year 2013-14 in respect of investment made under notified equity saving scheme. Rajiv Gandhi Equity Savings Scheme 2012 has been notified vide SO No 2777 E, dated 23.11.2012 (subsequent corrigendum SO NO. 2835E dated 05.12.2012) and amended vide notification SO No. 3693E dated 18.12.2013 as a scheme under this secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

estor; (e) The investment is locked-in for a period of 3 years from the date of acquisition in accordance with the above scheme; (f) The assessee satisfies any other condition as may be prescribed. Amount of deduction - The amount of deduction is at 50% of the amount invested in equity shares/units. However, the amount of deduction under this provision cannot exceed ₹ 25,000. Withdrawal of deduction - If the assessee, after claiming the aforesaid deduction, fails to satisfy the above condi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

c. (Section 80D) Section 80D provides for deduction available for health insurance premia paid, etc. which is calculated as under: Sl. No. Persons for whom payment made Nature of payment Mode of payment Allowable Deduction (in Rs.) 1 Employee or his family* ♦ the whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family or ♦ any contribution made to the CGHS or such other scheme as may be notified by Central Government (Finance Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n any mode other than cash Aggregate allowable is ₹ 30,000/ 4 Parent or Parents of employee* ♦ the whole of the amount paid to effect or keep in force an insurance on the health of the parent or parents of the employee any mode other than cash Aggregate allowable is ₹ 25,000/ (Rs 30000/- for senior and very senior citizen) 5 ♦ any payment made on account of preventive health check-up of the parent or parents of the employee [restricted to ₹ 5000/-; cash payment allo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the employee. (i) Senior citizen" means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year. (iii) Very senior citizen means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by- (a) the General Insurance Corporation of India formed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dependent who is a person with disability (section 80DD): Under section 80DD, where an employee, who is a resident in India, has, during the previous year- (a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fulfilled:- (i) the scheme referred to in (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 employee 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ho, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of ₹ 75,000/-. However, where such individual is a person with severe disability, a higher deduction of ₹ 1,25,000/- shall be allowable. DDOs should note that 80DD deduction is in case of the dependent of the employee whereas 80U deduction is in case of the employee himself. However, under both the sections, the employee shall fur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes "autism", "cerebral palsy" and "multiple disability" referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999; (d) "Life Insurance Corporation" shall have the same meaning as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot;severe disability" referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999; (f) "person with disability" means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or clause (j) of section 2 of the National Trust for Welfare of Persons wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m, 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. 5.5.7. 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

insurer or reimbursed by the employer. Further in case of the person against whom such claim is made is a senior citizen (60 age years or more) then the deduction upto ₹ 60,000/- is allowed and in case of very senior citizen (80 age years or more) the deduction upto ₹ 80,000/- is allowed. For the purpose of this section, in the case of an employee, "dependant" means individual, the spouse, children, parents, brothers and sisters of the employee or any of them, dependant who .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

espect of interest on loan taken for higher education (Section 80E): Section 80E allows deduction in respect of payment of interest on loan taken from any financial institution or any approved charitable institution for higher education for the purpose of pursuing his higher education or for the purpose of higher education of his spouse or his children or the student for whom he is the legal guardian. The deduction shall be allowed in computing the total income for the Financial year in which th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns 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); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf; (c) "higher education" means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognized by the Central Government or Sta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tenant 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 sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ible subject to the following conditions:- (a) the employee 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 employee files the declaration in Form No.10BA. (Annexure X) (c) The employee does not own: (i) any residential accommodation himself or by his spouse or minor child or where such employee is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tal income for working out these percentages will be computed before making any deduction under section 80GG. The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of rent. 5.5.11 Deductions in respect of certain donations for scientific research or rural development ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts 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 Au .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elfare 7 a rural development fund notified u/s 35CCA (1)(c) set up and notified by the Central Government 8 National Urban Poverty Eradication Fund notified u/s 35CCA (1)(d) set up and notified by the Central Government No deduction under this section is allowable in case: (i) The employee has gross total income which includes income which is chargeable under the head "Profits and gains of business or profession". (ii) The amount of donation exceeds ₹ 10000 and is paid in cash. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has no income from "Profits and gains of business or profession". 5.5.12 Deduction in respect of interest on deposits in savings account (Section 80TTA): Section 80TTA has been introduced from the Financial Year 2012-13 and it allows to an employee from his gross total income if it includes any income by way of interest on deposits (not being time deposits) in a savings account, a deduction amounting to: (i) in a case where the amount of such income does not exceed in the aggregate ten .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fined 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. 6. REBATE OF ₹ 5000 FOR INDIVIDUALS HAVING TOTAL INCOME UPTO ₹ 5 LAKH [SECTION 87A] Finance Act 2013 provided relief in the form of rebate to individual taxpayers, resident in India, who are in lower income bracket, i. e. having total income not exceeding ₹ 5,00,000/-. The amount of rebate available under sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ulated balance due to an employee is paid, make therefrom the deduction specified in Rule 10 of Part A of the Fourth Schedule to the Act. The accumulated balance is treated as income chargeable under the head "Salaries". 7.2 Where any contribution made by an employer, including interest on such contributions, if any, in an approved Superannuation Fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the Fund to the extent provided in Rule 6 of Par .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

they deem necessary before allowing the aforesaid deductions. In case the DDO is not satisfied about the genuineness of the employee's claim regarding any deposit/ subscription/ payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer. 9. CALCULATION OF INCOME-TAX TO BE DEDUCTED: 9.1 Sa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gains and Income from other Sources to arrive at the Gross Total Income as shown in the form of simple statement mentioned para 3.5. 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". (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 par .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

News: Notification Issued For GST Actionable Claim On Branded Food Products

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Forum: GST Invoice

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.

News: GST implementation smoother than expected: Jaitley

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

Forum: 3B mistake

Forum: Input tax credit

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Due date of Filing TRAN-1

Highlight: Diversion of income at source - Joint venture agreement - 97% of the receipt transfer to M/s TRG Industries (P) Ltd. - scope of the agreement - it is diversion by overriding title - not taxable in the hands of assessee - HC

Highlight: Expenditure on eligible projects or schemes u/s 35AC - After 01.04.2017 the legislature desired to withdraw such deduction. - The Union legislature was competent to introduce such amendment - HC

Highlight: Transfer of trading assets at cost price, the profit component also stood transferred to the outgoing Directors, which otherwise belonged to the Company - the fact that AO has made the addition in the hands of the Directors would not make any difference - additions confirmed - HC

Highlight: The interest u/s 234B of the Act cannot go beyond the stage of S.245D(I) before the Settlement Commission - HC

Highlight: Galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture - Deduction u/s 80-IB allowed - HC

Highlight: Penalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Levy of penalty confirmed - HC

Highlight: Disallowance of interest - reference to section 179 - The legislature has also recognised, that the doctrine of lifting of veil in the matter of tax dues is to be applied to prevent fraud etc. and not where the company has suffered despite its normal bona fide function. - HC

News: RBI Reference Rate for US $

Notification: Amendment in Notification No. S.O. 3118(E), dated the 3rd October, 2016

Highlight: Discount on ESOP to be allowed as business expenditure u/s 37(1), during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option.

Notification: Central Government appoints the 20th September, 2017 as the date on which proviso to clause (87) of section 2 of the Companies Act 2013, shall come into force

Notification: Companies (Restriction on number of layers) Rules, 2017

Highlight: Penalty u/s 271(1)(c) - additional income disclosure - surrender of income post survey u/s 133A - he disclosure made by the assessee is voluntary in nature, in the revised return - no penalty

Highlight: Reopening of assessment - notice u/s 148 issued on the directions of JCIT / CIT - a perusal of reasons for initiating reassessment proceedings clearly show that they are against the sprit of provisions u/s 147

Highlight: MAT - Adjustment to book profit - computation u/clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules.

Highlight: Addition on account of alleged suppression of service value received - the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version