Circular No. 6 of 2004 dated 6-12-2004 of CBDT—Deduction of tax at source from salaries under section 192 of the Income-tax Act. - Income Tax - 006

Circular Number: 006 File Number: 275/192/2004-IT(B) Dated 25/01/2005 Reference : Circular No. 6 of 2004 dated 6-12-2004 of CBDT—Deduction of tax at source from salaries under section 192 of the Income-tax Act. 1. Sub-para. 4.4 at pages 5 and 6 (271 ITR (St.) 102) of the circular under reference may be read as follows : "Deposit of tax deducted : 4.4 According to the provisions of section 200, any person deducting any sum in accordance with the provisions of section 192 or paying tax on non-monetary perquisites on behalf of the employee under section 192(1A), shall pay the sum so deducted or tax so calculated on the said non-monetary perquisites, as the case may be, to the credit of the Central Government in the prescribed manner (vide rule 30 of the Income-tax Rules, 1962). In the case of deductions made by, or, on behalf of the Government, the payment has to be made on the day of the tax-deduction itself. In other cases, the payment has to be made within one week from the last day of month in which deduction is made." 2. Sub-para 4.10 at page 8 (271 ITR (St.) 104) of the circular under reference may be read as follows : "Challans for deposit of TDS : 4.10 While making the payment of tax deducted at source to the credit of the Central Government, it may be ensured that the correct amount of income-tax is recorded in the relevant challan. It may also be ensured that the right type of challan is used. The relevant challan for making payment of tax deducted at source from salaries is challan No. ITNS-281. Where the amount of tax deducted at source is credited to the Central Government through book adjustment, care should be taken to ensure that the correct amount of income-tax is reflected therein." 3. Item No. VII of sub-para 5.1 at page 14 (271 ITR (St.) 112) of the circular under reference may be read as follows : "VII. Interest free or concessional loans : It 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 respect of loans of the same type and for the same purpose advanced by it to the general public. Perquisite value would be calculated on the basis 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 Rs. 20,000 in the aggregate are exempt. Loans for medical treatment specified in rule 3A are also exempt, provided the amount of loan for medical reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement is received, the perquisite value at the prescribed rate shall be charged from the date of reimbursement on the amount reimbursed, but not repaid against the outstanding loan taken specifically for this purpose." Hindi version shall follow. (Sd.) Anand Jha, Deputy Secretary (Budget). [F. No. 275/192/2004-IT(B)]