9911796707
TMI BlogInstruction for deduction of tax at source from salaries during the Financial year 2001-2002 under section 192X X X X Extracts X X X X X X X X Extracts X X X X ..... Where the total income exceeds 10 per cent, of the amount by Rs. 50,000 but does not exceed which the total income exceeds Rs. 60,000. Rs. 50,000 3. Where the total income exceeds Rs. 1,000 plus 20 per cent of the Rs. 60,000 but does not exceed amount by which the total income Rs. 1,50,000 exceeds Rs. 60,000 4. Where the total income exceeds Rs. 19,000 plus 30 per cent of Rs. 1,50,000 the amount by which the total income exceeds Rs. 1,50,000. Surcharge on income-tax The amount of income-tax computed in accordance with the preceding provisions of this paragraph shall be reduced by the amount of rebate of income-tax calculated under Chapter VIIIA and the income tax so reduced shall be increased by a surcharge at the rate of two per cent of such income-tax where the total income exceeds sixty thousand rupees. However, the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on a total income of Rs. 60,000 by more than the amount of income that exceeds Rs. 60,000. Surcharge is payable by both resident and non-resident assessees. Section 192 of the Income-tax Act, 1961 : Broad Scheme of tax deduction at S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder any head other than Salaries and of any tax deducted at source thereon, in the prescribed Form (No. 12C) vide Annexure II. Such income should not be a loss under any such head other than the loss under the head Income from house property for the same financial year. The person responsible for making payment (DDO) shall take such other income and tax, if any, deducted at source from such income, and the loss if any, under the head Income from house property into account for the purpose of computing tax deducible under section 192 of the Income-tax Act. It is, however, provided that this sub-section shall not in any case have the effect of reducing the tax deductible except where the loss under the head Income from house property has been taken into account, from income under the head Salaries below the amount that would be so deductible if the other income and the tax deducted thereon had not been taken into account. In other words, the DDO can take into account the loss from house property only for working out the amount of total tax to be deducted. While taking into the account the loss from house property, the DDO shall ensure that the assessee files declaration in Form No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ognised Provident Fund or any person authorised 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. 3.7 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 Part B of the Fourth Schedule to the Act. 3.8 For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the prescribed rate of exchange. Persons responsible for deducting tax and their duties 4.1 Under clause (i) of section 204 of the Act the persons responsible for paying for the purpose of section 192 means the employer himself or if the employer is a company, the company itself including the principal officer thereof. 4.2 The tax determined as per para 7 sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the amount deducted and certain other particulars. This certificate, usually called the TDS certificate, has to be furnished within a period of one month from the end of the relevant financial year. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. In the case of employees receiving salary income including pension, the certificate has to be issued in Form No. 16 which has been prescribed under Boards Notification No. S.O. 940(E), dated 25-9-2001. It is, however, clarified that there is no obligation to issue the TDS certificate (Form 16) in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions. As per the amended section 192, the responsibility of providing correct and complete particulars of perquisites or profits in lieu of salary given to an employee is placed on the person responsible for paying such income i.e., the person responsible for deducting tax at source. The form and manner of such particulars are prescribed in rule 26A, Form 12BA and Form 16 of the Income-tax Rules as amended by Notification No. 940(E), dated 25-9-2001. A new form (Form 12BA) stating the nature and valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of every local authority or other pubic body or association, every private employer and every other person responsible for deducting tax under section 192, from Salaries shall, after the end of each financial year, prepare and deliver, by 31st May following the financial year, an annual return of deduction of tax to the designated/concerned Assessing Officer. This return has to be furnished in Form No. 24. It may be noted that a copy of each of the TDS certificates issued during the financial year should be enclosed with the annual return. If a person fails to furnish in due time the annual return, he shall be liable to pay by way of penalty under section 272A, a sum which shall be Rs. 100 for every day during which the failure continues, so, however that this sum shall not exceed the amount of tax which was deductible at source. 4.9 A return filed on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media as may be specified by the Board shall be deemed to be a return for the purposes of section 206 and the Rules made thereunder, and shall be admissible in any proceeding thereunder, without further proof of production of the original, as ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it : Circular No. 707, dated 11-7-1995. 4.13 TDS certificates issued by Central Government Departments which are making payments by book adjustment, should be accepted by the Assessing Officers if they indicate that credit has been effected to the Income-tax Department by book adjustment and the date of such adjustment is given therein. In such cases the Assessing Officers may not insist on details like challan numbers, dates of payment into Government Account etc., but they should in any case satisfy themselves regarding the genuineness of the certificates produced before them : Circular No. 747, dated 27-12-1996. 4.14 There is a specific procedure laid down for refund of payments made by the deductor in excess of taxes deducted at source, vide Circular No. 285, dated 21-10-1980. 4.15 In respect of non-residents, the salary paid for services rendered in India shall be regarded as income earned in India, so as to specifically provide that any salary payable for rest period or leave period which is both preceded or succeeded by service i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is required to be deducted from the commuted portion of pension as explained in clause (3) of para 5.2 of this Circular. (4) Section 17 defines the terms salary, perquisite and profits in lieu of salary. Perquisite, includes the value of any benefit or amenity granted or provided free of cost or at concessional rate, in specified cases. Perquisites are charged to tax under the existing provisions for employees who are directors of companies or have substantial interest in a company, or have an income from salaries, excluding the value of all benefits or amenities, exceeding Rs. 24,000. The Finance Act, 2001 amends the provision to raise the monetary limit to Rs. 50,000. The definition of perquisite has also been amended to include the value of any other fringe benefit or amenity as may be prescribed. The details of fringe benefits are to be calculated in the manner prescribed in the Income-tax Rules. It is further provided that profits in lieu of salary shall include amounts received in lump sum or otherwise, prior to employment or after cessation of employment for the purposes of taxation. The new rules for valuation of perquisite have been prescribed in the amended Rule 3: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such a case shall be 24 per cent of the annual salary or the actual charges paid or payable to such hotel, whichever is lower, for the period during which such accommodation is provided as reduced by any rent actually paid or payable by the employee. However, where in cases the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on transfer from one place to another, no perquisite value for such accommodation provided in a hotel shall be charged. 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 perquisite as per the residual clause. In other words, composite tariff for accommodation will be valued as per these Rules and any other changes for other facilities provided by the hotel will be separately valued under the residual clause. Also, if on account of an employees transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and partly for private or personal use and such details are not available or not properly maintained, the amount paid for or reimbursed less Rs. 1,200 per month for small car or Rs. 1,600 per month for large car would be valued as a perquisite. A higher amount may be deducted on the basis of proper maintenance of details of official use. For claiming higher amount of official use in respect of reimbursement of car expenses or wholly official use of car provided by an employer, the following details and documents need to be maintained: (i) the employer has maintained complete details of journeys undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon; (ii) the employee gives a certificate that the expenditure was incurred wholly and exclusively for the performance of his official duty; (iii) the supervising authority of the employee, wherever applicable, gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties. However, these rules of valuation for employee owned cars should not be taken to apply to conveyance allowance regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here such free educational facilities are provided in any institution by reason of his being in employment of that employer, the sub-rule shall not apply if the cost of such education or such benefit per child does not exceed Rs. 1,000 p.m. VI. Free or concessional journeys - Under the old rules where an employee avails of free or concessional journeys in conveyance owned by the undertaking for the purpose of transport of passengers or goods, the value of perquisite was taken as Nil. However, under the new rules the value at which such benefit or amenity is offered by such undertaking to the public, the value of perquisite shall now be taken as such value as reduced by any amount actually paid by the employee. The conveyance may be owned, leased or made available by any other arrangement by the undertaking. Journey tickets for leave travel, tours and transfers which are already exempt under sections 10(5) and 10(14) would continue to be exempt. VII. Interest free or concessional loans - It is common practice particularly in financial institutions to provide interest free or concessional loans to employees. The value of such perquisite would be the excess of interest payable at pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffice premises or through non-transferable vouchers meant for only meals during working hours. These vouchers should be provided by employers encashable only at an eatery, a restaurant or a cafe. Tea or similar non-alcoholic beverages and snacks - in the form of light refreshments during working hours are not charged as perquisite. Also, arrangements for meals in remote areas as prescribed in para 5.1 and similar off-shore sites as specified, shall be exempt. However, expenditure on provision of free meals by the employer in excess of Rs. 50 should be treated as perquisite, as reduced by recoveries made from the employee. X. Gift, voucher or token in lieu of gift - It is customary in India, as it is in other parts of the world, to provide presents directly or indirectly in the form of vouchers or tokens to employees on social and religious occasions like Diwali, Christmas, New Year, the anniversary of the organization etc. Such gifts upto Rs. 5,000 in the aggregate per annum would be exempt, beyond which it would be taxed as a perquisite. However, gifts made in cash or convertible into cash, like gift cheques etc. do not fall in the purview of this sub-rule. XI. Credit card and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such use. However, Computers and laptops are exempt. Further, the value of perquisite for an asset used for income for more than ten years would be taken as Nil. XIII. Transfer of assets - Often an employee or member of his household benefits from the transfer of movable asset (not being shares or securities) at no cost or at a cost less than its market value from the employer. The difference between the original cost of the movable asset (not being shares or securities) and the sum, if any, paid by the employee, shall be taken as the value of perquisite. In case of a movable asset, which has already been put to use, the original cost shall be reduced by a sum of 10% of such original cost for every completed year of use of the asset. Owing to a higher degree of obsolescence, in case of computers and electronic gadgets, however, the value of perquisite shall be worked out by reducing 50% of the actual cost by the reducing balance method for each completed year of use. Electronic gadgets in this case means data storage and handling devices like computer, digital diaries and printers. They do not include household appliance (i.e. white goods) like washing machines, microwave oven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed uniformly in respect of all perquisites, in case of a particular taxpayer. In other words, one cannot selectively value a particular perquisite by the old rule and another one by the new rule. It is pertinent to mention that benefits specifically exempt under section 10(13A), 10(5), 10(14), 17 etc. would continue to be exempt. These include benefits like travel on tour and transfer, leave travel, daily allowance to meet tour expenses as prescribed, medical facilities subject to conditions. However, administrative circulars and instructions relating to perquisites falling under the purview of Rule 3 issued before the adoption of the new rules, shall stand superseded or modified, as the case may be. Income not included in the head Salaries (Exemptions) 5.2 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 : (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) on retirement from service, or, after term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in section 25F(b) of the Industrial Disputes Act, 1947 or any amount not less than Rs. 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 protection to the workmen in the undertaking to which the scheme applies and other relevant circumstances. (6) Under section 10(10C), any payment received 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 exempted from income-tax to the extent that such a mount does not exceed five lakh rupees : (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 declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the house rent allowance or any portion thereof from the total income of the employee. Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance upto Rs. 3,000 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government and has been awarded Param Vir Chakra or Maha Vir Chakra or Vir Chakra or such other gallantry award as may be specifically notified by the Central Government. Such notification has been made vide Notifications No. SO 1948(E), dated 24-11-2000 and 81(E), dated 29-1-2001 which are enclosed as per Annexure VII. (13) 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 local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees; (ii) in respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines : Provided that, in a case falling in sub-clause (ii), the employee shall attach with his return of income a certificate from the hospital specifying the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of an entertainment allowance specifically granted to the assessee by his employer, who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees whichever is less. The deduction hitherto available to non-Government employees has been withdrawn. The tax on employment within the meaning of clause (2) of Article 276 of the Constitution of India leviable by or, under any law, shall also be allowed as a deduction in computing the income under the head Salaries. Deductions under Chapter VI-A of the Act 5.4 The following deductions under Chapter VI-A of the Act are available : (1) As per section 80CCC, where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the Fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of handicapped dependent shall in accordance with and subject to the provisions of this section be allowed a deduction of a sum of forty thousand rupees in the previous year. The handicapped dependent means a person who is a relative of the individual or a member of HUF and is not dependent on any person other than such individual or HUF for his support and maintenance and is suffering from permanent physical disability (including blindness or mental retardation, specified in rule 11A of the Income-tax Rules, 1962). The deduction will be available to individuals without any restriction with regard to their total income. The permanent physical disability or mental retardation of the dependent relative has to be certified by a physician, surgeon, occulist or a psychiatrist as the case may be, working in a Government hospital, including a Departmental dispensary or a hospital maintained by a local authority as per Explanation given below section 80DD. It would be sufficient if the employee furnishes a medical certificate from a Government Hospital and a decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... education, subject to the following conditions : (i) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan : Provided that the amount which may be so deducted shall not exceed forty thousand rupees. (ii) The deduction specified above shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the loan referred to above together with interest thereon is paid by the assessee in full, whichever is earlier. For this purpose (a) approved charitable institution means an institution established for charitable purposes and notified by the Central Government under clause (2C) of section 10, or, an institution referred to in clause (a) of sub-section (2) of section 80G. (b) financial institution means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Application set by the Central Government. xviii. The National Trust for Welfare of persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities. (7) Under section 80GG of the Act, an assessee is entitled to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions : (a) the assessee has not been in receipt of any house rent allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act; (b) the assessee files the declaration in Form No. 10BA. (Annexure VII). (c) He will be entitled to a deduction in respect of house rent paid by him in excess of 10 per cent of his total income, subject to a ceiling of 25 per cent thereof or Rs. 2,000 per month, whichever is less, the total income for working out these percentages will be computed before making any deduction under section 80GG. (d) The assessee does not own : (i) any residential accommodation himself or by his spouse or minor child or where such assessee is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of an option to receive a cash payment in lieu of the payment of the annuity; (3) Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his wife or children, insofar as the sum deducted does not exceed 1/5th of the salary; (4) Any contribution made : (a) by an individual to any provident fund to which the Provident Fund Act, 1925 applies; (b) to any provident fund set up by the Central 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 a minor, or of whom he is a guardian; (c) by an employee to a recognised 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; (5) Any deposit in a ten year account or a fifteen year account under the Post Office Savings Bank (Cumulative Time Deposit) Rules, 1959, as amended from time to time, where such sums are deposited in an account st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both. (13) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under the head Income from house property (or which would, if it has not been used for assessees 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-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clause with reference to the cost of any equity shares or debentures, the cost of such shares or debentures shall not be taken into account for the purposes of sections 54EA and 54EB. Explanation : For the purpose of this clause (i) eligible issue of capital means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the purposes of developing, maintaining and operating an infrastructure facility or for generating, or for generating and distributing, power or for providing telecommunication services whether basic or cellular ; (ii) infrastructure facility shall have the meaning assigned to it in the Explanation to sub-section (4) of section 80(1A); (iii) Public Company shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956); (iv) Public Financial Institution shall have the meaning assigned to it in section 4A of the Companies Act, 1956. (15) Subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form: Provided that where a deduction is claimed and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India, and below the age of sixty-five years, at any time during the previous year, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under Chapter VIII) her total income, with which she is chargeable for any assessment year, of an amount equal to hundred per cent, of such income tax or an amount of five thousand rupees, whichever is less. (19) The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/subscriptions/payments made by the employees, by calling for such particulars/information as they deem necessary before allowing the aforesaid rebate. In case the DDO is not satisfied about the genuineness of the employees claim regarding any deposit/subscription/payment made by the employee, he should not allow the same, and the employee would be free to claim the rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer. Calculation of income-tax to be deducted 7.1 Salary income for the purpose of section 192 shall be estimated as follows : (a) First compute the gross salary as mentioned in para 5.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001, dated 12-12-2001. Annexure I For Assessment year 2002-03 Example - 1 Calculation of Income-tax in the case of an employee having gross salary income. (i) up to Rs. 1,00,000. (ii) More than Rs. 1,00,000 but less than Rs. 5,00,000 and (iii) Exceeding Rs. 5,00,000 Particulars (Rupees) (Rupees) (Rupees) (i) (ii) (iii) Gross Salary Income 1,00,000 5,00,000 6,00,000 (including allowances) Contribution to G.P.F. 10,000 20,000 30,000 Computation of total income and tax payable thereon (Rupees) (Rupees) (Rupees) 1. Gross Salary 1,00,000 5,00,000 6,00,000 2. Less Standard deduction u/s 16 (i) 30,000 20,000 Nil . Taxable Income 70,000 4,80,000 6,00,000 Tax thereon 3,000 1,18,000 1,54,000 Less tax rebate u/s 88 3,000 4,000 6,000 Income-tax payable Nil 1,14,000 1,48,000 Add: Surcharge @ 2% 2,280 2,960 . Total Tax Payable 1,16,280 1,50,960 For Assessment year 2002-03 Example 2 Calculation of Income-tax in the case of assessee having handicapped dependent. Particulars (Rupees) 1. Gross Salary 3,20,000 2. Amount spent on treatment of dependent who is handicapped 7,000 3. Amount paid to LIC with regard to annuity for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30,000 whichever is less 30,000 Total Income (rounded off) 65,300 Tax on Total Income 2,060 Rebate u/s 88 GPF 24,000 LIP 2,500 CTD 2,400 Contribution to Mutual Fund 10,000 U/s 88(xiiib) 38,900 @ 20% 7,780 Tax on Total Income 2,060 Less Tax rebate restricted to Rs. 2,060 Tax payable Nil For Assessment year 2002-03 Example - 5 Illustrating valuation of perquisite and calculation of tax in the case of an employee of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months. Employee owns a car (cubic capacity of engine exceeds 1.61) used partly for personal and partly for official work and actual running and maintenance charges including chauffeurs salary are reimbursed by employer, but no documents are maintained regarding details of journeys. Particulars (Rupees) 1. Salary 1,08,000 2. Bonus 12,000 3. Free gas, electricity, water etc. (actual bills paid by Company) 6,000 4. (a) Furnished flat provided to the employee for which actual rent paid by the Company per annum 78,000 (b) Hotel rent paid by employer (for two months) 30,000 (c) Rent recovered from the employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry (including D.A.) as personal D.A. is included for retirement benefits) 8,600 (c) 50% of salary (including D.A.) 77,000 (-) 8,600 Total Salary Income 1,59,800 Less: Standard deduction 25,000 Total Taxable Income 1,34,800 Tax on total income 15,960 Tax rebate u/s 88 (i) Provident Fund 20,000 (ii) LIP 10,000 (iii) NSC VIII Issue 20,000 (iv) Repayment of HBA 12,000 (v) Subscription to eligible issue of capital of a Co. approved u/s 88(xvi) 5,000 (vi) Subscription of units of mutual fund (u/s 88(xvii) 15,000 82,000 limited to 80,000 @20% 15,960 (restricted) Net Tax Payable Nil For Assessment year 2002-03 Example 7 Income-tax calculation in the case of an employee who claims loss under the head Income from house property. Particulars (Rupees) 1. Gross Salary 4,00,000 2. Housing Loan repaid (principal) 30,000 3. Interest payable on housing loan (Loan taken after 1-4-1999) 2,00,000 4. Donation paid to National Childrens Fund 5,000 5. N.S.C. purchased 10,000 6. G.P.F. 20,000 Computation of Taxable Income and Tax thereon 1. Salary Income Gross Salary 4,00,000 Less: Standard deduction 20,000 Taxable Salary 3,80,000 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form for sending particulars of income u/s 192(2B) for the year ending 31st March, 2001 1. Name and address of the employee 2. Permanent Account Number 3. Residential status 4. Particulars of income under any head of income other than salaries (not being a loss under any such head other than the loss under the head Income from house property) received in the financial year (i) Income from house property .................................. (in case of loss, enclose computation thereof) (ii) Profits and gains of business or profession .................................. (iii) Capital gains .................................. (iv) Income from other sources .................................. (a) Dividends (b) Interest (c) Other incomes (specify) Total ................................. . 5. Aggregate of sub-items (i) to (iv) of item 4 6. Tax deducted at source (enclose certificates) issued under section 203 Place : .................................. Date : .................................. . ......................................................... Signature of the employee Verification I, ..................................., do hereby declare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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