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Income-Tax Deduction from Salaries During the Financial Year 2017-18 Under Section 192 of the Income-Tax Act, 1961

Income Tax - 29/2017 - Dated:- 5-12-2017 - CIRCULAR NO : 29 /2017 F.No. 275/192/2017-IT(B) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ****** North Block, New Delhi Dated the 5th December, 2017 SUBJECT: . Reference is invited to Circular No. 01/2017 dated 02.01.2017 whereby the rates of deduction of income-tax from the payment of income under the head "Salaries" under Section 192 of the Income-tax Act, 1961 (hereinafter the Act ), during .....

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2017: As per the Finance Act, 2017, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2017-18 (i.e. Assessment Year 2018-19) at the following rates: 2.1 Rates of tax A. Normal Rates of tax: Sl No Total Income Rate of tax 1 Where the total income does not exceed ₹ 2,50,000/-. Nil 2 Where the total income exceeds ₹ 2,50,000/- but does not exceed ₹ 5,00,000/-. 5 per cent of the amou .....

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r 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/- 5 per cent of the amount by which the total income exceeds ₹ 3,00,000/- 3 Where the total income exceeds ₹ 5,00,000/- but does not exceed ₹ 10,00,000/- ₹ 10,000/- plus 20 per cent of the amount by which the total income .....

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,00,000/- 20 per cent of the amount by which the total income exceeds ₹ 5,00,000/- 3 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 accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Act, shall, in the case of every individual or Hindu undivided family or .....

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e having total income exceeding;- (a) Fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees; (b) 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 ru .....

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SECTION 192 OF THE INCOME-TAX ACT, 1961: BROAD SCHEME OF TAX DEDUCTION AT SOURCE FROM "SALARIES": 3.1 Method of Tax Calculation: Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2017-18. The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to require .....

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sites by Employer: An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at its option, make payment of the tax 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 t .....

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00/-, out of which, ₹ 50,000/- is on account of non-monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions 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) ₹ 10,300/- Average Rate of Tax [(10,300/4,50,000) X 100] 2.29% Tax payable on ₹ 50,000/= (2.29% of 50,000) ₹ 1145/- Amount required to be deposited each month &# .....

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e employer. The employee is now required to furnish to the present/chosen employer details of the income under the head "Salaries" due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present/chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer). 3.4 Relief When Salary Paid in Ar .....

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culars and take the same into account in making the deduction under Para(3.1) above. Here university means a university established or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under Section 3 of the University Grants Commission Act, 1956 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 voluntar .....

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formation regarding Income under any other head: (i) Section 192(2B) enables a taxpayer to furnish particulars of income under any 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 pr .....

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t of tax to be deducted. It may be noted that loss under the head Income from house property can be set off only up to ₹ 2.00 lakh with the income under any other head of income in view of the amendment to section 71 of the Act vide Finance Act, 2017. Hence, loss under the head Income from house property in excess of ₹ 2.00 lakh is to be ignored for calculating the amount of tax deduction. 3.6 Computation of income under the head Income from house property : While taking into account .....

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roperty The DDO shall also ensure furnishing of the evidence or particulars in Form No. 12BB in respect of deduction of interest as specified in Rule 26C read with section 192 (2D). 3.6.1 Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property [Section 24(b)]: Section 24(b) of the Act allows deduction from income from houses property on interest on borrowed capital as under:- (i) the deduction is allowed only in case of house property which .....

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uisition or construction of the house Before 01.04.1999 ₹ 30,000/- 3 Acquisition or construction of the house On or after 01.04.1999 ₹ 1,50,000/- (upto AY 2014-15) ₹ 2,00,000/- (w. e. f. AY 2015-16) In case of Serial No. 3 above (a) The acquisition or construction of the house should be completed within 5 years from the end of the FY in which the capital was borrowed. Hence, it is necessary for the DDO to have the completion certificate of the house property against which deduc .....

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owed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of Principal and Interest of the loan so repaid. 3.7 Adjustment for Excess or Shortfall of Deduction: The provisions of Section 192(3) allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within that financial year its .....

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nment the "person 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. Further, as per Section 204(iv), in case the credit, or as the case may be, the payment is made by or on behalf of Central Government or State Government, the DDO or any other person by whatever name called, responsible for crediting, or as the case may be, paying such sum is the "person res .....

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e at the rates mentioned therein.(see Rule 28AA). The Unique Identification Number of the certificate is required to be reported in Quarterly Statement of TDS (Form 24Q). 4.4. Deposit of Tax Deducted: Rule 30 prescribes time and mode of payment of tax deducted at source to the account of Central Government. 4.4.1. Due dates for payment of TDS: Prescribed time of payment/deposit of TDS to the credit of Central Government account is as under: a) In case of an Office of Government: Sl No. Descripti .....

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ONTH However, if a DDO applies before the jurisdictional Additional/Joint Commissioner of Income Tax to permit quarterly payments of TDS under section 192, the Rule 30(3) allows for payments on quarterly basis and as per time given in Table below: Sl. No. Quarter of the financial year ended on Date for quarterly payment 1 30th June 7th July 2 30th September 7th October 3 31st December 7th January 4 31st March 30th April next Financial Year 4.4.2 Mode of Payment of TDS 4.4.2.1 Compulsory filing o .....

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e credit of the Central Government, shall‐ (a) submit a statement in Form No. 24G under section 200 (2A) on or before the 30th day of April where statement relates to the month of March; and in any other case, on or before 15 days from the end of relevant month to the agency authorized by the Director General of Income‐tax (Systems) [TIN Facilitation Centres currently managed by M/s National Securities Depository Ltd] in respect of tax deducted by the deductors and reported to him fo .....

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m which shall be ₹ 100/- for every day during which the failure continues. However, the amount of such penalty shall not exceed the amount of tax which is deductable at source. The procedure of furnishing Form 24G is detailed in Annexure III. PAOs/DDOs should go through the FAQs in Annexure IV to understand the correct process to be followed. The ZAO / PAO of Central Government Ministries is responsible for filing of Form No. 24G on monthly basis. The person responsible for filing Form No. .....

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e of the Reserve Bank of India or branches of the State Bank of India or of any authorized bank; (ii) In case of a company and a person (other than a company), to whom provisions of section 44AB are applicable, the amount deducted shall be electronically remitted into the Reserve Bank of India or the State Bank of India or any authorised bank accompanied by an electronic income-tax challan (Rule125). The amount shall be construed as electronically remitted to the Reserve Bank of India or to the .....

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of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201 and shall be deemed to be an assessee-in-default in respect of such tax and liable for penal action u/s 221 of the Act. Further Section 201(1A) provides that such person shall be liable to pay simple interest (i) at the rate of 1% for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which such .....

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or part of tax under the second proviso to section 194B, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted or paid by him. 4.5.3 Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time, as above, the tax deducted at source by him or tax payable by him under the second proviso to Section 194B, he shall be punishable with rigorous imprisonment for a term which shall be between 3 month .....

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to issue such certificates. Revised Form 16 annexed to Notification No 11 dated 19-02-2013 is enclosed. The certificate in Form 16 shall specify (a) Valid permanent account number (PAN) of the deductee; (b) Valid tax deduction and collection account number (TAN) of the deductor; (c) (i) Book identification number or numbers (BIN) where deposit of tax deducted is without production of challan in case of an office of the Government; (ii) Challan identification number or numbers (CIN*) in case of p .....

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rs who deposit TDS in the Central Government Account through book entry) shall issue the Part A of Form No. 16, by generating and subsequently downloading it through TRACES Portal and after duly authenticating and verifying it, in respect of all sums deducted on or after the 1st day of April, 2012 under the provisions of section 192 of Chapter XVII-B. Part A of Form No 16 shall have a unique TDS certificate number. 'Part B (Annexure)' of Form No. 16 shall be prepared by the deductor manu .....

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e these certificates to the person concerned, as required by section 203, he will be liable to pay, by way of penalty, under section 272A(2)(g), a sum which shall be ₹ 100/- for every day during which the failure continues. It is, however, clarified that there is no obligation to issue the TDS certificate in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions. [Note: TRACES is a web-based application of the Income - tax Department that provides an .....

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e mentioned below: (a) TDS certificate (Form16) would be generated for the deductee only if Valid PAN is correctly mentioned in the Annexure II of Form 24Q in Quarter 4 filed by the deductor. Moreover, employers are advised to ensure in Form 16 that the status of matching with respect to Form 24G/OLTAS is F . If the status of matching other than F , kindly take necessary action promptly to rectify the same. It is pertinent to mention here that certain facilities have been provided to the deducto .....

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Form 24Q as per NSDL RPU. (d) TDS on Income (including loss from House Property) under any Head other than the head Salaries offered for TDS (shown in column 339) can be shown in column 350 (Reported amount of TDS by previous employer, as per NSDL RPU. (e) Employer is advised to quote Total Taxable Income (Column 346) in Annexure II without rounding-off and TDS should be deducted and reported accordingly i.e. without rounding-off of TDS also. Example: Total Taxable Income Total Taxable Income ( .....

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assessee. 4.6.3. Authentication by Digital Signatures: (i) Where a certificate is to be furnished in Form No. 16, the deductor may, at his option, use digital signatures to authenticate such certificates. (ii) In case of certificates issued under clause (i), the deductor shall ensure that (a) the conditions prescribed in para 4.6.1 above are complied with; (b) once the certificate is digitally signed, the contents of the certificates are not amenable to change; and (c) the certificates have a c .....

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perquisites, etc (Section 192(2C): 4.6.4.1 As per section 192(2C), 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 are prescribed in Rule 26A, Form 12BA (Annexure II) and Form 16 of the Rules. Information relating to the nature and value of perquisites is to be .....

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hich tax has been paid and certain other particulars in the amended Form 16. 4.6.4.3 The obligation cast on the employer under Section 192(2C) for furnishing a statement showing the value of perquisites provided to the employee is a crucial responsibility of the employer, which is expected to be discharged in accordance with law and rules of valuation framed there under. Any false information, fabricated documentation or suppression of requisite information will entail consequences thereof provi .....

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ection 139C of the Act, the Assessing Officer can require the taxpayer to produce Form 12BA along with Form 16, as issued by the employer. 4.6.5 DDOs empowered to obtain evidence of proof or particulars of the prescribed claim (including claim for set-off of loss) under the section 192(2D): DDOs have been authorized u/s 192 to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purpose of estimating the income of the assessee or .....

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e evidence or proof or particular of claims such as House rent Allowance (where aggregate annual rent exceeds one lakh rupees); Leave Travel Concession or Assistance; Deduction of interest under the head Income from house property and deduction under Chapter VI-A as per the prescribed form 12BB laid down by Rule 26C of the Rules. Form 12BB is enclosed as Annexure IIa. 4.7 Mandatory Quoting of PAN and TAN: 4.7.1 Section 203A of the Act makes it obligatory for all persons responsible for deducting .....

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for persons deducting tax at source to quote PAN of the persons from whose income tax has been deducted in the statement furnished u/s 192(2C), certificates furnished u/s 203 and all statements prepared and delivered as per the provisions of section 200(3) of the Act. 4.7.2 All tax deductors are required to file the TDS statements in Form No.24Q (for tax deducted from salaries). As the requirement of filing TDS certificates alongwith the return of income has been done away with, the lack of PAN .....

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furnish PAN by employee (Section 206AA): 4.8.1 Section 206AA in the Act makes furnishing of PAN by the employee compulsory in case of receipt of any sum or income or amount, on which tax is deductible. If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor has been made responsible to make TDS at higher of the following rates: i) at the rate specified in the relevant provision of this Act; or ii) at the rate or rates in force; or iii) at the rate of twenty per cent. T .....

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0% and in case the average rate exceeds 20%, tax is to be deducted at the average rate. Education cess @ 2% and Secondary and Higher Education Cess @ 1% is not to be deducted, in case the tax is deducted at 20% u/s 206AA of the Act. 4.9 Statement of deduction of tax under section 200(3) [Quarterly Statement of TDS]: 4.9.1 The person deducting the tax (employer in case of salary income), is required to file duly verified Quarterly Statements of TDS in Form 24Q for the periods [details in Table be .....

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atement for the last quarter filed in Form 24Q (as amended by Notification No. S.O.704(E) dated 12.5.2006) shall be treated as the annual return of TDS. Due dates of filing this statement quarterwise is as in the Table below. TABLE: Due dates of filing Quarterly Statements in Form 24Q Sl. No. Date of ending of quarter of financial year Due date 1 30th June 31st July of the financial year 2 30th September 31st October of the financial year 3 31st December 31st January of the financial year 4 31st .....

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led at Annexure VI. 4.9.3 All Returns in Form 24Q are required to be furnished in electronically except in case where the number of deductee records is less than 20 and deductor is not an office of Government, or a company or a person who is required to get his accounts audited under section 44AB of the Act. [Notification No. 11 dated 19.02.2013]. 4.9.4 Fee for default in furnishing statements (Section 234E): If a person fails to deliver or caused to be delivered a statement within the time pres .....

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ny mistake or to add, delete or update the information furnished in the statement delivered earlier. 4.9.6 Penalty for failure in furnishing statements or furnishing incorrect information (section 271H): If a person fails to deliver or caused to be delivered a statement within the time prescribed in section 200(3) or furnishes an incorrect statement, in respect of tax deducted at source on or after 1.07.2012, he shall be liable to pay, by way of penalty a sum which shall not be less than ₹ .....

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ement; (ii) mandatory quote his permanent account number (PAN) in the statement except in the case where the deductor is an office of the Government( including State Government). In case of Government deductors PANNOTREQD to be quoted in the e-TDS statement; (iii) mandatory quote of permanent account number PAN of all deductees; (iv)furnish particulars of the tax paid to the Central Government including book identification number or challan identification number, as the case may be. (v) furnish .....

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account of contribution to Life Insurance, Provident Fund, NSC etc., if the pensioner furnishes the relevant details to the banks, may be allowed. Necessary instructions in this regard were issued by the Reserve Bank of India to the State Bank of India and other nationalized Banks vide RBI's Pension Circular(Central Series) No.7/C.D.R./1992 (Ref. CO: DGBA: GA (NBS) No.60/GA.64 (11CVL)-/92) dated the 27th April 1992, and, these instructions should be followed by all the branches of the Banks, .....

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he 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 11.07.1995]. 4.11.2 In respect of non-residents, the salary paid for services rendered in India shall be regarded as income earned in India. It has been specifically provided in the Act that any salary payable for rest period or leave period which is both preceded or succeeded by service in India and forms part of the service contract of employment will also .....

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before it became due to him. (c) any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year. (2) For the removal of doubts, it is clarified that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due. Any salary, bonus, commission or remunera .....

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redit of the employee participating in a recognized provident fund as consists of {Rule 6 of Part A of the Fourth Schedule of the Act}: a) contributions made by the employer to the account of the employee in a recognized provident fund in excess of 12% of the salary of the employee, and b) interest credited on the balance to the credit of the employee in so far as it is allowed at a rate exceeding such rate as may be fixed by Central Government. [w.e.f. 01-09-2010 rate is fixed at 9.5% - Notific .....

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ed to be deducted from the commuted portion of pension to the extent exempt under section 10 (10A). Family Pension is chargeable to tax under head Income from other sources and not under the head Salaries . Therefore, provisions of section 192 of the Act are not applicable. Hence, DDOs are not required to deduct TDS on family pension paid to person. 5.2.2 Perquisite includes: I. The value of rent free accommodation provided to the employee by his employer; II. The value of any concession in the .....

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(whether due from or paid or allowed by one or more employers), exclusive of the value of all benefits and amenities not provided by way of monetary payment, exceeds ₹ 50,000/-. [What constitutes concession in the matter of rent have been prescribed in Explanations 1 to 4 below section 17(2)(ii) of the Act] IV. Any sum paid by the employer in respect of any obligation which would otherwise have been payable by the assessee. V. Any sum payable by the employer, whether directly or through a .....

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of the Securities Contracts (Regulation) Act, 1956 and, where employees stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme; (b) sweat equity shares means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called; (c) the value of .....

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on granted to an employee to apply for the specified security or sweat equity shares at a predetermined price; VII. The amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh and fifty thousand rupees (w.e.f. 01.04.2017); and VIII The value of any other fringe benefit or amenity as prescribed in Rule 3. 5.2.2A Rules for valuation of such benefit or amenity as given in Rule 3 are as under : - I. Residential Accom .....

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ommodation as reduced by the rent actually paid by the employee. Employees of autonomous, semi-autonomous institutions, PSUs/PSEs & subsidiaries, Universities, etc. are not covered under this method of valuation. (ii) For all others, i.e., those salaried taxpayers not in employment of the Central government and the State government, the valuation of perquisite in respect of accommodation would be at prescribed rates, as discussed below: a) Where the accommodation provided to the employee is .....

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purpose of calculation of perquisite in respect of Residential Accommodation : a. Basic Salary ; b. Dearness Allowance, or Dearness Pay if it enters into the computation of superannuation or retirement benefit of the employees; c. Bonus ; d. Commission ; e. All other taxable allowances (excluding the portion not taxable ); and f. Any monetary payment which is chargeable to tax (by whatever name called). Salary from all employers shall be taken into consideration in respect of the period during .....

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ished accommodation- the value of perquisite as determined by the above method (in A) shall be increased by- i) 10% of the cost of furniture, appliances and equipments, or ii) where the furniture, appliances and equipments have been taken on hire, by the amount of actual hire charges payable and the value so arrived at shall be reduced by any charges paid by the employee himself. It is added that where the accommodation is provided by the Central Government or any State Government to an employee .....

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e basis of lower of the following two: 1. 24% of salary paid or payable in respect of period during which the accommodation is provided; or 2. Actual charges paid or payable by the employer to such hotel, for the period during which such accommodation is provided as reduced by any rent actually paid or payable by the employee. However, nothing in (C) shall be taxable if following two conditions are satisfied : 1. The hotel accommodation is provided for a total period not exceeding in aggregate 1 .....

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Rules and any other charges for other facilities provided by the hotel will be separately valued under the residual clause. D. However, the value of any accommodation provided to an employee working at a mining site or an on-shore oil exploration site or a project execution site or a dam site or a power generation site or an off-shore site will not be treated as a perquisite if: i) such accommodation is located in a remote area or ii) where it is not located in a remote area , the accommodation .....

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er [ Rule 3(2)]: (1) If an employer provides motor car facility to his employee, the value of such perquisite shall be : a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties. b) Actual expenditure incurred by the employer on the running and maintenance of motor car including remuneration to chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for .....

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₹ 2400/-(plus ₹ 900/-, if chauffeur is also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres. d) ₹ 600/- (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 if the expenses on maintenance and running of motor car for such private or personal use are fully met by the employee). H .....

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loyee but actual maintenance & running expenses (including chauffeur salary, if any) are met or reimbursed by the employer, no perquisite shall be chargeable to tax if the car is used wholly and exclusively for official purposes. However following compliances are necessary: ➢ The employer has maintained complete details of the journey undertaken for official purposes; ➢ The employer gives a certificate that the expenditure was incurred wholly for official duties. However if the .....

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oyer. Where the attendant is provided at the residence of the employee, full cost will be taxed as perquisite in the hands of the employee irrespective of the degree of personal service rendered to him. Any amount paid by the employee for such facilities or services shall be reduced from the above amount. IV Gas, electricity & water for household consumption [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 su .....

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in that behalf. 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 ₹ 1000/- p.m. The value of perquisi .....

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of passengers or goods shall be taken to be the value at which such benefit or amenity is offered by such employer to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity. This will not apply to the employees of any airline or the railways. VII Interest free or concessional loans [Rule 3(7)(i)]: It is common practice, particularly in financial institutions, to provide interest free or concessional loans to employees or any member of his .....

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sis of the maximum outstanding monthly balance method. For valuing perquisites under this rule, any other method of calculation and adjustment otherwise adopted by the employer shall not be relevant. However, small loans up to ₹ 20,000/- in the aggregate are exempt. Loans for medical treatment of diseases specified in Rule 3A are also exempt, provided the amount of loan for medical reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement .....

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by the employer for any holiday availed of by the employee or any member of his household, other than leave travel concession (as per section 10(5) ), shall be the amount of the expenditure incurred by the employer in that behalf. However, any amount recovered from or paid by the employee shall be reduced from the perquisite value so determined. Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value .....

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d by employer to an employee[Rule 3(7)(iii)]: Value of taxable perquisite is calculated as under: Expenditure incurred by the employer on the value of food / non-alcoholic beverages including paid vouchers which are not transferable and usable only at eating joints XXX Less: Fixed value of a sum of ₹ 50/- per meal XXX Less: Amount recovered from 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 .....

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ount of expenditure incurred by the employer XXX Less : Expenditure on use for official purposes XXX Less : Amount, if any, recovered from the employee XXX XXX Amount taxable as perquisite XXX However if the amount is incurred wholly and exclusively for official purposes it will be exempt if the following conditions are fulfilled i) Complete details of such expense, including date and nature of expenditure, is maintained by the employer. ii) Employer gives a certificate that the same was incurre .....

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amount is incurred wholly and exclusively for official purposes it will be exempt if the following conditions are fulfilled i) Complete details of such expense, including date and nature of expenditure and its business expediency is maintained by the employer. ii) Employer gives a certificate that the same was incurred wholly and exclusively for official purpose. Note: 1) Health club, sport facilities etc. provided uniformly to all classes of employee by the employer at the employer s premises a .....

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his perquisite is to be charged at the rate of 10% of the original cost of the asset as reduced by any charges recovered from the employee for such use. However, the use of Computers and Laptops would not give rise to any perquisite. XIII Transfer of assets [Rule 3(7)(viii)]: 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 orig .....

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l cost by the reducing balance method for each completed year of use. Electronic gadgets in this case means data storage and handling devices like computer, digital diaries and printers. They do not include household appliance (i.e. white goods) like washing machines, microwave ovens, mixers, hot plates, ovens etc. Similarly, in case of cars, the value of perquisite shall be worked out by reducing 20% of its actual cost by the reducing balance method for each completed year of use. XIV Gifts [Ru .....

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and in rule 3 of the Rules. The deductors may look into the above provisions carefully before they determine the perquisite value for deduction purposes. 5.2.3 'Profits in lieu of salary' shall include I. the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with 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 clau .....

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ny amount due to or received, whether in lump sum or otherwise, by any assessee from any person- (A) before his joining any employment with that person; or (B) after cessation of his employment with that person. 5.3 INCOMES NOT INCLUDED UNDER THE HEAD "SALARIES" (EXEMPTIONS) Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act :- 5.3.1 The value of any travel concession or assistance .....

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d (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. 5.3.2 Death-cum-retirement gratuity or any other gratuity is exempt to the extent specified from inclusion in computing the total income under Section 10(10). Any death-cum-retirement gratuity received under the revised .....

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oyees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence service is exempt. Gratuity received in cases other than those mentioned above, on retirement, termination etc is exempt up to the limit as prescribed by the Board. Presently the limit is ₹ 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 pens .....

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r to the employees of a local authority] or a corporation established by a Central, State or Provincial Act, is exempt under Section10(10A)(i). As regards payments in commutation of pension received under any scheme of any other employer, exemption will be governed by the provisions of section 10(10A)(ii). Also, any payment in commutation 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 Governme .....

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unt specified by the Government of India Notification No.S.O.588(E) dated 31.05.2002 at ₹ 3,00,000/- in relation to such employees who retire, whether on superannuation or otherwise, after 1.4.1998. 5.3.5 Under Section 10(10B), the retrenchment compensation received by a workman is exempt from income-tax subject to certain limits. The 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 .....

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e retrenchment is on or after 1.1.1997 as specified in Notification No. 10969 dated 25-06-1999. 5.3.6 Under Section 10(10C), any payment received or receivable (even if received in installments) by an employee of the following bodies at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes 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 amoun .....

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echnology Act, 1961; h) Such Institute of Management as the Central Government may by notification in the Official Gazette, specify in this behalf. The exemption of amount received under VRS has been extended to employees of the Central Government and State Government and employees of notified institutions having importance throughout India or any State or States. It may also be noted that where this exemption has been allowed to any employee for any assessment year, it shall not be allowed to h .....

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received under a Keyman insurance policy; or iii) any sum received under an insurance policy issued on or after 1.4.2003, but on or before 31-03-2012, in respect of which the premium payable for any of the years during the term of the policy exceeds 20 percent of the actual capital sum assured; or iv) any sum received under an 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 c .....

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would be exempt. As per Section 10 (12A) of the Act, any payment from the National Pension System Trust to an employee on closure of his account or on his opting out of the pension scheme referred to in section 80CCD to the extent it does not exceed forty percent , of the total amount payable to him at the time such closure of his opting out of the scheme. As per section 10 (12B) of the Act, any payment from the National Pension System Trust to an employee under the pension scheme referred to in .....

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it in the Official Gazette is exempt under section 10(11). 5.3.9 Under section 10(13A) of the Act, any special allowance specifically granted 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 Ru .....

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(i) where such accommodation is situated in Bombay, Calcutta, Delhi or Madras, 50% of the salary due to the employee for the relevant period; 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 paymen .....

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ncome 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 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 b .....

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14) provides for exemption of the following allowances :- (i) Any special allowance or benefit granted to an employee to meet the expenses wholly, 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 .....

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otification No.SO 617(E) dated 7th July, 1995 (F.No.142/9/95-TPL)which has been amended vide notification SO No.403(E) dt 24.4.2000 (F.No.142/34/99-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 no .....

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n No.F.2/14/89-NS-II dated 7.6.89, as amended by notification No.F.2/14/89-NS-II dated 12.10.89, the Central Government has notified a scheme called Deposit Scheme for Retiring Government Employees, 1989 for the purpose of the said clause. 5.3.12 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 be .....

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have the meaning assigned to it in Section 10(5) of the Act. DDO may not deduct any tax in the case of recipients of such awards 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 b .....

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employer in respect of medical insurance taken for his employees (under any scheme approved by the Central Government or Insurance 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 treatmen .....

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abroad by the patient/attendant, shall be excluded from perquisites only if the employee's gross total income, as computed 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 si .....

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(14) read wit rule 2BBany allowance granted to meet the cost of travel on tour or on transfer includes any sum paid in connection 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 S .....

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t employees. 5.4.2 Tax on Employment [Section 16(iii)]: The tax on employment (Professional Tax) within the meaning of article 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 .....

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o a limit of ₹ 1,50,000/-: (1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual. (2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured .....

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e Provident Fund Act, 1925 applies; (b) to any provident fund set up by the Central Government, and notified by it 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 .....

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fied the scheme Sukanya Samriddhi Account vide Notification GSR No. 863(E) dated 02.12.2014] (b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by notification in the Official Gazette, specify in this behalf. [The Central Government has since notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E) dated 3.11.05and National Saving Certificate (IXth Issue) vide Notification . G.S.R. .....

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of India; b. for participation in any unit-linked insurance plan of the LIC Mutual Fund referred to section 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 Govern .....

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r of Undertaking & Repeal) Act, 2002 under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf; [The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide 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 .....

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ation S.O. No. 1563(E) dated 3.11.2005] (10) Any subscription made to any such deposit scheme of, or, any contribution made to any such pension fund set up by, the National Housing Bank, as the Central Government may, by notification in the Official Gazette, specify in this behalf; (11) Any subscription made to any such deposit scheme, as the Central Government may, by notification in the Official Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providi .....

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rposes of Section 80C(2)(xvi)(a)]. (12) 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 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 sche .....

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ny, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act. The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit .....

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re the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he 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 agg .....

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lege, school or other educational institution to a student who is enrolled full-time for the said course. It 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 .....

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s than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes. [The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28.7.2006] (17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify .....

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il 2012 10% of the actual capital sum assured Policy issued on or after 1st April 2013 * - In cases of persons with disability or person with severe disability as per Sec 80 U or suffering from disease or ailment as specified in rules made under Sec 80DDB 15% of the actual capital sum assured *Introduced by Finance Act 2013 Actual capital sum assured in relation to a life insurance policy means the minimum amount assured under the policy on happening of the insured event at any time during the t .....

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nsurance Corporation of India or any other insurer for receiving pension from the Fund referred to in section 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 bo .....

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owed under section 80C. 5.5.3 Deduction in respect of contribution to pension scheme of Central Government (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 date .....

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fied by the Central Government, which shall not exceed ₹ 50,000. The deduction of ₹ 50,000 shall 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 wh .....

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en on such closure or opting out then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax. Provided that the amount received by the nominee, on the death of the assessee, under the circumstances referred to in clause (i) above, shall not be deemed to be the income of the nominee. Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a dedu .....

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he deduction allowed under section 80 CCD(1B) is an additional deduction in respect of any amount paid in the NPS upto ₹ 50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of ₹ 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 .....

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atisfied: (a) The assessee is a resident individual (b) His gross total income does not exceed ₹ 12 lakhs; (c) He has acquired listed shares in accordance with a notified scheme or listed units of an equity oriented fund as defined in section 10(38); (d) The assessee is a new retail investor; (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 .....

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ith the AY in which the listed equity shares or units were first acquired. If any deduction is claimed by a taxpayer under this section in any year, he shall not be entitled to any deduction under this section for any other year. The deduction under this section shall only be allowed in respect of investment made only up to 31st March, 2017. Therefore, no deduction under this section is allowed for investment made on, or after 1st April, 2017. 5.5.5 Deduction in respect of health insurance premi .....

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inance Act 2013) any mode other than cash Aggregate allowable is ₹ 25,000/ (Rs 30000/- for senior and very senior citizen) 2 ❖ any payment on account of preventive health check-up of the employee or family, [restricted to ₹ 5000/-; cash payment allowed here] any mode including cash 3 ❖ Whole of the amount paid on account of medical expenditure incurred on health of a very senior citizen and no amount has been paid to effect of keep in force an insurance on the health of .....

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payment allowed here] any mode including cash 6 ❖ Whole of the amount paid on account of medical expenditure incurred on health of a very senior citizen and no amount has been paid to effect of keep in force an insurance on the health of such person any mode other than cash Aggregate allowable is ₹ 30,000/ *Aggregate of the sum allowable as deduction under Sl No 1, 2 & 3 and 4, 5 &6 above shall not exceed ₹ 30000/- Here i) family means the spouse and dependent childre .....

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section 9 of the General Insurance Business (Nationalization) Act, 1972 and approved by the Central Government in this behalf; or (b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999. 5.5.6 Deductions in respect of expenditure on persons or dependants with disability 5.5.6.1 Deductions in respect of maintenance including medical treatment of a depend .....

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s specified in this regard and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the employee shall be allowed a deduction of a sum of ₹ 75,000/- from his gross total income of that year. However, where such dependant is a person with severe disability, an amount ₹ 1,25,000/- shall be allowed as deduction subject to the specified conditions. The deduction under (b) above shall be allowed only if the following conditions are fulfi .....

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dant, being a person with disability, predeceases the employee, an amount equal to the amount paid or deposited under sub-para(b) above shall be deemed to be the income of the employee of the previous year in which such amount is received by the employee and shall accordingly be chargeable to tax as the income of that previous year. 5.5.6.2 Deductions in respect of a person with disability (section 80U): Under section 80U, in computing the total income of an individual, being a resident, who, at .....

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o the DDO the following: 1. A copy of the certificate issued by the medical authority as defined in Rule 11A(1) in the prescribed form as per Rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein. 2. Further in cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesaid c .....

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spouse, children, parents, brothers and sisters of the individual or any of them; (ii) in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year; (c) disability shall have the meaning assigned to it in clause (i) of section 2 of th .....

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authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or such other medical authority as may, by notification, be specified by the Central Government for certifying autism , cerebral palsy , multiple disabilities , person with disability and 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 P .....

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ne or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995; or (ii) a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999; (h) specified company means a company as referred to in clause (h) of section 2 of the Unit Trust of India .....

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whichever is less. Now the deduction can be allowed on the basis of a prescription from an oncologist, a urologist, nephrologist, a haematologist, an immunologist or such other specialist, as mentioned in Rule 11DD. However, the amount of the claim shall be reduced by the amount if any received from the insurer or reimbursed by the employer. Further in case of the person against whom such claim is made is a senior citizen (60 age years or more) then the deduction up to ₹ 60,000/- is allow .....

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rtificate in Form 10-I. A prescription from a specialist as specified in the Rules containing the name and age the patient, name of the disease/ailment along with the name, address, registration number & qualification of the specialist issuing the prescription would now be required. 5.5.8 Deduction in respect 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 .....

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hever is earlier. For the purpose of this section - (a) "approved charitable institution" means an institution established for charitable purposes and approved by the prescribed authority section 10(23C), or an institution referred to in section 80G(2)(a); (b) "financial institution" means 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 whi .....

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unds, charitable institutions, etc. (Section 80G): Section 80G provides for deductions on account of donation made to various funds , charitable organizations etc. In cases where employees make donations to the Prime Minister s National Relief Fund, the Chief Minister s Relief Fund or the Lieutenant Governor s Relief Fund through their respective employers, it is not possible for such funds to issue separate certificate to every such employee in respect of donations made to such funds as contrib .....

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amount of donation exceeds ₹ 2000/- unless the amount is paid by any mode other than cash. 5.5.10 Deductions is respect of rents paid (Section 80GG): Section 80GG allows the employee 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 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) th .....

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ined under section 23(2)(a) or section 23(4)(a), as the case may be. (d) He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income. The deduction shall be equal to 25% of total income or ₹ 5,000/- per month, whichever is less. The total 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 a .....

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n Authority granting approval/ Notification 1 A research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research u/s 35(1)(ii) Central Government 2 A research association which has as its object the undertaking of research in social science or statistical research or to a University, college or other institution to be used for research in social science or statistical research u/s 35(1)(iii) Ce .....

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ity under Rule 6AAA 5 a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme. furnishes the certificate u/s 35AC(2)(a) National Committee for Promotion of Social & Economic Welfare 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 Gov .....

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this regard by insisting on production of evidence of actual payment of donation and a receipt from the person to whom donation has been made and ensure that the approval/notification has been issued by the right authority. DDO must ensure a self-declaration from the employee that he 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 Financi .....

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Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); (b) co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or (c) Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898, For this section, "time deposits" means the deposits repayable on expiry of fixed periods. 6. REBATE OF ₹ 2500 FOR INDIVIDUALS H .....

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ND: 7.1 The trustees of a Recognized Provident Fund, or any person authorized by the regulations of the Fund to make payment of accumulated balances due to employees, shall in cases where sub-rule(1) of Rule 9 of Part A of the Fourth Schedule to the Act applies, at the time when the accumulated balance due to an employee is paid, make 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 Sa .....

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when he was member of the fund. The deductor shall remain liable to deduct tax on any sum paid on account of returned contributions (including interest, if any) even if a fund or part of a fund ceases to be an approved Superannuation fund. 7.3 As per section 192A of the Act, w. e. f. 01.06.2015 the trustees of the EPF Scheme 1952 framed under section 5 of the EPF & Misc. Provisions Act, 1952 or any person authorized under the scheme to make payment of accumulated balance due to employees, sh .....

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uction will have to be made at maximum marginal rate. The Rule-8 of Part-A of fourth schedule excludes the following accumulated balance due and becoming payable to the employee from the total income; (i) If, he has rendered continuous service with his employer for a period of five years or more, or (ii) If, though he has not rendered such continuous service, the service has been terminated by reason of - the employees ill health, or by the contraction or discontinuance of the employer s busines .....

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n the accumulated balance due and becoming payable to an employee includes any amount transferred from his individual account in any other recognized provident fund(s) maintained by his former employer(s), then in computing the period of continuous service the period or periods of continuous services rendered under former employer(s) shall be counted for the purposes of (i) and (ii) above. Under the above four situations at (i) to (iv), the accumulated balance due and payable to the employee is .....

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e 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 Salary income for the purpose of section 192 shall be computed as follow:- (a) First compute the gross salary as mentioned in para 5.1 including all the incomes mentioned in para 5.2 and excluding the income mentione .....

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nder the Head Income from House property to the extent of ₹ 2.00 lakh. (d) Allow deductions mentioned in para 5.5 from the figure arrived at (c) above ensuring that the relevant conditions are satisfied. The aggregate of the deductions subject to the threshold limits mentioned in para 5.5 shall not exceed the amount at (b) above and if it exceeds, it should be restricted to that amount. This will be the amount of total income of the employee on which income tax would be required to be dedu .....

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