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TMI BlogDEDUCTION OF TAX AT SOURCEINCOME-TAX DEDUCTION FROM SALARIES UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Department- w ww.incometaxindia.gov.in . 2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2016 As per the Finance Act, 2016 , income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head Salaries for the financial year 2016-17 (i.e. Assessment Year 2017-18) at the following rates: 2.1 Rates of tax A. Normal Rates of tax: Sl. No. Total Income Rate of tax 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/-. 10 per cent of the amount by which the total income exceeds ₹ 2,50,000/- 3 Where the total income exceeds ₹ 5,00,000/- but does not exceed ₹ 10,00,000/-. ₹ 25,000/- plus 20 per cent of the amount by which the total income exceeds ₹ 5,00,000/-. 4 Where the total income exceeds ₹ 10,00,000/-. ₹ 1,25,000/- plus 30 per cent of the amount by which the total income exceeds ₹ 10,00,000/- B. Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year: Sl. No. Total Income Rate of tax 1 Where the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercent of income-tax including the surcharge if any, but not including the Education Cess on income tax as in 2.3.1. 3. 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 2016-17. The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to requirement to furnish PAN as per sec 206 AA of the Act , and shall be deducted at the time of each payment. No tax, however, will be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds ₹ 2,50,000/-or ₹ 3,00,000/- or ₹ 5,00,000/-, as the case may be, depending upon the age of the employee. (Some typical illustrations of computation of tax are given at Annexure-I) . 3.2 Payment of Tax on Perquisites by Employer: An option has been given to the employer to pay the tax on non-monetary perquisites given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89 (1) he may furnish to the person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E duly verified by him , and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars 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 voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in section 10(10C)(i) (read with Rule 2BA), a scheme of voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the employee for his own residence. However, if it is actually not occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him. ( ii ) the quantum of deduction allowed as per table below: Sl. No. Purpose of borrowing capital Date of borrowing capital Maximum Deduction allowable 1. Repair or renewal or reconstruction of the house Any time ₹ 30,000/- 2. Acquisition 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 3 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 deduction is claimed either from the builder or through self-declaration from the employee. ( b ) Further any prior period interest for the FYs upto the FY in which the property was acquired or constructed (as reduced by any part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erly 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. Description Time up to which to be deposited. 1 Tax deposited without Challan [Book Entry] SAME DAY 2 Tax deposited with Challan 7TH DAY NEXT MONTH 3 Tax on perquisites opt to be deposited by the employer. 7TH DAY NEXT MONTH ( b ) In any case other than an Office of Government Sl. No. Description Time up to which to be deposited. 1 Tax deducted in March 30th APRIL NEXT FINANCIAL YEAR 2 Tax deducted in any other month 7TH DAY NEXT MONTH 3 Tax on perquisites opted to be deposited by the employer 7TH DAY NEXT MONTH 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 30t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.4.2.2 Payment by an Income Tax Challan: ( i ) In case the payment is made by an income-tax challan, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it, within the time specified in Table in para 4.4.1 above, into any office 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 State Bank of India or to any authorized bank, if the amount is remitted by way of: ( a ) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorized bank; or ( b ) debit card. {Notification No.41/2010 dated 31st May 2010} 4.5 Interest, Penalty Prosecution for Failure to Deposit Tax Deducted: 4.5.1 If a person fails to deduct the whole or any part of the tax at source, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 payment through bank. (*Challan identification number (CIN) means the number comprising the Basic Statistical Returns (BSR) Code of the Bank branch where the tax has been deposited, the date on which the tax has been deposited and challan serial number given by the bank. ) ( d ) Receipt numbers of all the relevant quarterly statements of TDS (24Q). The receipt number of the quarterly statement is of 8 digit. Further as per Circular 04/2013 dated 17-04-2013 all deductors (including Government deductors 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 manually and issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry excluding any amount exempt under section 10 in column 333 (Total amount of salary) of Annexure II of 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 (Rounded Off) TDS to be Deducted TDS Deducted/ Reported after rounding-off of income Short Deduction Rs.1350094 ₹ 1350090 ₹ 235028.20 ₹ 235027 Rs.1.20 4.6.2. If an assessee is employed by more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers and Part B may be issued by each of the employers or the last employer at the option of the assessee. 4.6.3. Authentication by Digital Signatures : ( i ) Where a certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequences thereof provided under the law. The certificates in Forms 16 and/or Form 12BA specified above, shall be furnished to the employee by 31st May of the financial year immediately following the financial year in which the income was paid and tax deducted. If he fails to issue these certificates to the person concerned, as required by section 192(2C) , he will be liable to pay, by way of penalty, under section 272A(2)(i), a sum which shall be ₹ 100/- for every day during which the failure continues. As per Section 139C of the Act, the Assessing Officer can require the taxpayer to produce Form 12BA alongwith 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 computing the amount of tax deductible under the said section. The evidence /proof /particulars for some of the deductions/exemptions/allowances/set-off of loss claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS. However, where the income of the employee computed for TDS u/s 192 is below taxable limit, no tax will be deducted. But where the income of the employee computed for TDS u/s 192 is above taxable limit, the deductor will calculate the average rate of income-tax based on rates in force as provided in sec 192 . If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed the amount of tax which was deductible at source. This fee is mandatory in nature and to be paid before furnishing of such statement. 4.9.5 Rectification of mistake in filing TDS Statement: A DDO can also file a correction statement for rectification of any 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 ₹ 10,000/- but which may extend to ₹ 1,00,000/-. However, the penalty shall not be levied if the person proves that after paying TDS with the fee and interest, if any, to the credit of Central Government, he had delivered such statement before the expiry of one year from the time prescribed for delivering the statement. 4.9.7 At the time of preparing statements of tax deducted, the deductor is required to: ( i ) mandatory quote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be regarded as income earned in India. 5. COMPUTATION OF INCOME UNDER THE HEAD SALARIES 5.1 INCOME CHARGEABLE UNDER THE HEAD SALARIES : (1) The following income shall be chargeable to income-tax under the head Salaries : ( a ) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not; ( b ) any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or 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 remuneration, by whatever name called, due to, or received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose income under the head Salaries (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 fund, other than a recognized provident fund or an approved superannuation fund or other specified funds u/s 17, to effect an assurance on the life of an assessee or to effect a contract for an annuity. VI. The value of any specified security or sweat equity shares allotted or transferred , directly or indirectly, by the employer, or former employer , free of cost or at concessional rate to the employee and for this purpose, ( a ) specified security means the securities as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 and, where employees' stock option has been granted under any plan or scheme therefor, includes the securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 lakh 15% of salary 2 Exceeds 10 lakhs but does not exceed 25 lakhs 10% of salary 3 For other places 7.5 % of salary ( b ) Where the accommodation so provided is taken on lease/ rent by the employer: The prescribed rate is 15% of the salary or the actual amount of lease rental payable by the employer, whichever is lower, as reduced by any amount of rent paid by the employee. Meaning of 'Salary 'for the 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 which an accommodation is provided. Where on account of the transfer of an employee from one place to another, he is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 is of a temporary nature having plinth area of not more than 800 square feet and should not be located within 8 kilometers of the local limits of any municipality or cantonment board. A project execution site here means a site of project up to the stage of its commissioning. A remote area means an area located at least 40 kilometers away from a town having a population not exceeding 20,000 as per the latest published all-India census. II Perquisite on Motor car provided by the Employer [ 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 increa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e actual cost of the motor car. III Personal attendants etc. [Rule 3(3)]: The value of free service of all personal attendants including a sweeper, gardener and a watchman is to be taken at actual cost to the employer. 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 supply is made from the employer's own resources, the manufacturing cost per unit incurred by the employer would be taken for the valuation of perquisite. Any amount paid by the employee for such facilities or services shall be reduced from the perquisite value. V Free or concessional education [Rule 3(5)]: Perquisite on account of free or concessional education for any member of the employee's household shall be determined as the sum equal to the amount of expenditure incurred by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement is received, the perquisite value at the prescribed rate shall be charged from the date of reimbursement on the amount reimbursed, but not repaid against the outstanding loan taken specifically for this purpose. VIII Perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed by the employer for any holiday availed [Rule 3(7)(ii)]: The value of perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed 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 at which such facilities are offered by other agencies to the public. If a holiday faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite 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 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 and expenditure incurred on them are exempt. (2) The initial one-time deposits or fees for corporate or institutional membership, where benefit does not remain with a particular employee after cessation of employment are exempt. Initial fees / deposits, in such case, is not included. XII Use of assets [Rule 3(7)(vii)]: It is common practice for a movable asset (other than those referred in other sub rules of rule 3) owned by the employer to be used by the employee or any member of his household. This 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 10 due to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy. Keyman insurance policy shall have the same meaning as assigned to it in section 10( 10D ); III. any 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 received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding (a) on leave to any place in India or (b) after retirement from service, or, after termination of service to any place in India is exempt under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Government or a State Government, as cash-equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement , whether on superannuation or otherwise, is exempt under Section 10(10AA)(i). In the case of other employees, this exemption will be determined with reference to the leave to their credit at the time of retirement on superannuation or otherwise, subject to a maximum of ten months' leave. This exemption will be further limited to the maximum amount 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 compens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived under a Life Insurance Policy (Sec 10(10D) , including the sum allocated by way of bonus on such policy other than the following is exempt under section 10(10D): ( i ) any sum received under section 80DD(3) or section 80DDA(3); or ( ii ) any sum 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 capital sum assured; or ( v ) any sum received under an insurance policy issued on or after 1.4.2013 in cases of persons with disability or person with severe disability as per Sec 80U or suffering from disease or ailment as specified in Sec 80DDB, in respect of which the premium payable for any of the years during the term of the policy exceeds 15 percent of the actual capital sum assured. However, any sum received under such policy referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided as an administrative measure that salaried employees drawing house rent allowance upto ₹ 3000/- per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax-deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent. Further if annual rent paid by the employee exceeds ₹ 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee. 5.3.10 Section 10(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 gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the family of such individual is also exempt [Notifications No.S.O.1948(E) dated 24.11.2000 and 81(E) dated 29.1.2001, which are enclosed as per Annexure VIII IX]. Family for this purpose shall 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 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 as provided in Rule 3A(2) of the Rules in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines as provided in Rule 3(A)(1)of the Rules, ( c ) premium paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of duty shall be exempt. 5.4 DEDUCTIONS U/S 16 OF THE ACT FROM THE INCOME FROM SALARIES 5.4.1 Entertainment Allowance [Section 16(ii)]: A deduction is also allowed under section 16(ii) in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee, 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. No deduction on account of entertainment allowance is available to non-government 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-A OF THE ACT In computing the taxable income of the employee, the following deductions under Chapter VI-A of the Act are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kanya 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. 848 (E), dated the 29th November, 2011, publishing the National Savings Certificates (IX-Issue) Rules, 2011 G.S.R. 868 (E), dated the 7th December, 2011, specifying the National Savings Certificates IX Issue as the class of Savings Certificates F No1-13/2011-NS-II r/w amendment Notification No.GSR 319(E), dated 25-4-2012 ] (6) Any sum paid as contribution in the case of an individual, for himself, spouse or any child, a. for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust 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 Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuted 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. [The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O. No.37(E), dated 11.01.2007, for the purposes 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature. (14) Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution. (15) Subscription to any units of any mutual fund referred to in clause (23D) of Section 10 and approved by the Board, if the amount of subscription to such units is subscribed only in eligible issue of capital of any company. (16) Investment as a term deposit for a fixed period of not less 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 Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C. 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 dated 22.12.2003 National Pension System-NPS or as may be notifed by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites). As per section 80CCD(1B), an assessee referred to in 80CCD(1) shall be allowed an deduction in computation of his income, of the whole of the amount paid or deposited in the previous year in his account under the pension scheme notified or as may be notified by the Central Government, which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 2777 E, dated 23.11.2012 (subsequent corrigendum SO NO. 2835E dated 05.12.2012) and amended vide notification SO No. 3693E dated 18.12.2013 as a scheme under this section. The scheme was modified in December 2013 vide notification SO 3693 dated 18.12.13 ( RGESS, 2013). The deduction under this section in accordance with RGESS 2013 is available if following conditions are satisfied: ( 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 deduction - The amount of deduction is at 50% of the amount invested in equity shares/units. However, the amount of deduction under this provision cannot exceed ₹ 25,000. Withdrawal of deduction - If the assessee, after claiming the aforesaid deduction, fails to satisfy the above conditions, the deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldren of the employee. ( i ) Senior citizen means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year. ( iii ) Very senior citizen means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by- ( a ) the General Insurance Corporation of India formed under 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 dependent who is a person with disability (section 80DD): Under section 80DD , where an employee, who is a resident in India, has, during the previous year- ( a ) incurred any expenditure for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal 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 certificate, no deduction under this section shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority as in 1 above and furnished before the DDO. 3. For the purposes of sections 80DD and 80 U some of the terms defined are as under:- ( a ) Administrator means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 ; ( b ) dependant means- ( i ) in the case of an individual, the 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 mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, of any amount actually paid for the medical treatment of such disease or ailment as may be specified in the rules 11DD (1) for himself or a dependant. The deduction allowed is equal to the amount actually paid is in respect of the employee or his dependant or ₹ 40,000 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 upto ₹ 60,000/- is allowed and in case of very senior citizen (80 age years or more) the deduction upto ₹ 80,000/- is allowed. For the purpose of this section, in the case of an employee, dependant means individual, the spouse, children, parents, brothers and sisters of the employee or any of them, dependant wholly or mainly on the employee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er'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 contributions made to these funds are in the form of a consolidated cheque. An employee who makes donations towards these funds is eligible to claim deduction under section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G on the basis of the certificate issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf - Circular No. 2/2005, dated 12-1-2005. No deduction under this section is allowable in case the amount of donation exceeds ₹ 10000/- 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 exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has as its object the training of persons for implementing programmes of rural development. furnishes the certificate u/s 35CCA (2A) Prescribed Authority 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 Government No deduction under this section is allowable in case: ( i ) The employee has gross total income which includes income which is chargeable under the head Profits and gains of business or profession . ( ii ) The amount of donation exceeds ₹ 10000 and is paid in cash. The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome chargeable under the head Salaries . 7.2 Where any contribution made by an employer, including interest on such contributions, if any, in an approved Superannuation Fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the Fund to the extent provided in Rule 6 of Part B of the Fourth Schedule to the Act. TDS should be at the average rate of tax at which, the employee was liable to be taxed during the preceding three years or during the period, if that period is less than three years, 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, shall, in a case where the accumulated balance due to an employee participating in a recognized provident fund is includible in his total income owing to the provisions of Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on such income shall be calculated at the rates given in para 2.1 of this Circular keeping in view the age of the employee and subject to the provisions of sec. 206AA, as discussed in para 4.8. Rebate as per Section 87A upto ₹ 2000/- to eligible persons (see para 6) may be given. Surcharge shall be calculated in cases where applicable (see para 2.2). 9.3 The amount of tax payable so arrived at shall be increased by educational cess as applicable (2% for primary and 1% for secondary education) to arrive at the total tax payable. 9.4 The amount of tax as arrived at para 9.3 should be deducted every month in equal installments. Any excess or deficit arising out of any previous deduction can be adjusted by increasing or decreasing the amount of subsequent deductions during the same financial year. 10. MISCELLANEOUS: 10.1 These instructions are not exhaustive and are issued only with a view to guide the employers to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962, the Finance Act 2016, the relevant circulars / notifications, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intenance of a dependant, being 60,000 4 GPF Contribution 25,000 5 LIP Paid 10,000 6 Interest Income on Savings Account 12,000 Computation of Tax S.No. Particulars Rupees 1 Gross Salary 4,20,000 2 Add: Income from Other Sources Interest Income on Savings Account Rs 12,000 3 Gross Total Income 4,32,000 4 Less: Deduction U/s 80DD (Restricted to Rs.60,000/- only) 60,000 5 Less: Deduction U/s 80C (i) GPF Rs.25,000/- (ii) LIP Rs.10,000/- = Rs.35,000/- 35,000 6 Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-) 10000 7 Total Income 3,27,000 8 Income Tax thereon/payable (includes Rebate of Rs 5000 as per Section 87A) 2,700 9 Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% 114 57 10 Total Income Tax payable 2,871 11 Rounded off to 2,870 Example 3 For Assessment Year 2017-18 Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer). S.No. Particulars Rupees 1 Gross Salary 5,20,000 2 Medical Reimbursement by employer on the treatment of self and dependent family member 35,000 3 Contribution of GPF 20,000 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit-Linked Insurance Plan Rs.50,000/- Total =Rs.1,14,000/- 90,000 3 Total Income 5,11,000 Tax payable 27,200 Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% 544 272 Total Income Tax payable 28016 Rounded off to 28020 Example 5 For Assessment Year 2017-18 Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years 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 ( With valid PAN furnished to employer). S.No. Particulars Rupees 1 Salary 7,00,000 2 Bonus 1,40,000 3 Free gas, electricity, water etc. (Actual bills paid by company) 40,000 4(a) Flat at concessional rate (for ten month). @ Rs.36000/month 3,60, 000 4(b) Hotel rent paid by employer (for two month) 1,00,000 4(c) Rent recovered from employee. 60,000 4(d) Cost of furniture. 2,00,000 5 Subscription to Unit Linked Insurance Plan 50,000 6 Life Insurance Premium 10,000 7 Contribution to recognized P.F. 42,000 COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON: S.No. Particulars Rupees 1 Salary 7,00,000 2 Bonus 1,40,000 3 Total Salary(1+2) for Valuation of Perquisites 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldren) : 20,000 Total : 1,80,000 Restricted to 1,50,000 1,50,000 Total Income 4,72,000 Income Tax thereon/payable 20,200 Add: (i). Education Cess @2% (ii). Secondary and Higher Education Cess @1% 404 202 Total Income Tax payable 20,806 Rounded off to 20,810 Example 7 For Assessment Year 2017-18 A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of: i) Rs.4,50,000/-, ii) Rs.8,00,000/- , iii) Rs. 12,50,000/-. B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices: Particulars Rupees (i) Rupees (ii) Rupees (iii) Gross Pension 4,50,000 8,00,000 12,50,000 Contribution of P.P.F. 70,000 1,00,000 1,50,000 Computation of Total Income and tax payable thereon Particulars Rupees (i) Rupees (ii) Rupees (iii) Gross Pension 4,50,000 8,00,000 12,50,000 Less: Deduction U/s 80C 70,000 1,00,000 1,50,000 Taxable Income 3,80,000 7,00,000 11,00,000 Tax thereon (after rebate u/s 87A) 3,000 60,000 1,50,000 Add: (i) Education Cess @ 2%. (ii) Secondary and Higher Education Cess @1% 120 60 1200 600 3000 1500 Total tax payable 3,180 61,800 1,54,500 TDS und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c pay (Rs.18,000 x 5) 90,000 H.R.A. (Rs.1,600 x 5) 8,000 Less : Exempt u/s 10(13A) 8,000 Club Facility (Rs.1,100 x 5) 5,500 Facility of Car (not taxable as perquisite) 15,400 Employer s Contribution to R.P.F. 95,500 Gross Salary 2,02,800 Less: Deduction ----- Net Salary 2,02,800 2. Income from Others Sources 95,000 Gross Total Income 2,97,800 Less : Deduction u/s 80C : Contribution to LIC/PPF/NSC Rs. 20,000 : Contribution to RPF ( Rs.2000 x 5) Rs. 10,000 30,000 Total Income 2,67,800 Computation of Tax Liability Tax payable on Rs.2,67,800 1,780 Less : Rebate u/s 87A 1,780 Net Income-tax payable Nil Add : Surcharge Nil Add : EC @ 2% --- Add : S HEC @ 1% --- Total Tax Payable Nil Example 10 2. One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C. Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs.23,720, grade Pay Rs.7,600, DA at prescribed rates, transport allowances @ Rs.3200+DA thereon, and HRA 30% of basic pay + grade pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2015-16. S.No. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... director or a person with : substantial interest in the company (where the employer is a company) 6) Income under the head Salaries of the employee : (other than from perquisites) 7) Financial Year : 8) Valuation of Perquisites S.No Nature of perquisite (see rule 3) Value of perquisite as per rules (Rs.) Amount, if any recovered from the employee (Rs.) Amount of perquisite chargeable to tax Col(3) - Col(4) (Rs.) (1) (2) (3) (4) (5) 1 Accommodation 2 Cars/Other automotive 3 Sweeper, gardener, watchman or personal attendant 4 Gas, electricity, water 5 Interest free or concessional loans 6 Holiday expenses 7 Free or concessional travel 8 Free meals 9 Free Education 10 Gifts, vouchers etc. 11 Credit card expenses 12 Club expenses 13 Use of movable assets by employees 14 Transfer of assets to employees 15 Value of any other benefit/amenity/service/privilege 16 Stock options(non-qualified options) 17 Other benefits or amenities 18 Total value of perquisites 19 Total value of Profits in lieu of salary as per 17(3) 9. Details of tax, - (a) Tax deducted from salary of the employee u/s 192(1) (b) Tax paid by employer on behalf of the employee u/s 192(1A) (c) Total tax paid (d) Date of payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on TIN website www.tin-nsdl.com. The AOs can prepare Form 24G either by using in-house facilities, third party software or by using form 24G Return Preparation Utility (RPU) developed by NSDL e-Governance Infrastructure Limited (NSDL), which is freely downloadable from the TIN web-site www.tin-nsdl.com. After preparation of form 24G, the AO is required to validate the same by using the Form 24G File Validation Utility (FVU) which is freely available on TIN website. Once file is validated through FVU, .fvu file in CD/DVD/Pen Drive along with physical Statement Statistic Report (SSR) signed by the AO, to be furnished at TIN-FCs. On successful acceptance of Form 24G at the TIN-FC, an acknowledgement containing 15 digit Token no. is provided to the AO. The AO can view the status of Form 24G on TIN website. Book identification Number (BIN) is generated for each DDO record with valid TAN reported in Form 24G, which is further disseminated to the AOs on email ID mentioned in Form 24G. AOs need to communicate the BIN details to respective DDOs. BIN is to be quoted by the DDOs in quarterly e-TDS/TCS statements. BIN consists of receipt number of Form 24G. DDO serial number and date of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledgement is identical to the one issued by the TIN-FC. There is no need to submit SSR and provisional receipt of original form 24G in online upload. 3. For FAQs and further details, AOs are advised to log on TIN website www.tin-nsdl.com ****** ANNEXURE IV Furnishing of Monthly Form No. 24G Statements by Pay and Accounts Officers (PAOs)/District Treasury Officers (DTOs)/Cheque Drawing and Disbursing Officers (CDDOs) 1. Under what income tax rule should Form 24G be filed? Income-tax Department Notification no. 41/2010 dated May 31, 2010 amended the Income Tax Rule 30 which mandates that in case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan (associated with deposit of the tax in a bank), the relevant PAO / CDDO / DTO or an equivalent office of the government (herein after called as AO in this document) is required to file Form 24G on monthly basis. 2. Who is the relevant PAO/CDDO/DTO who is liable for filing Form 24G? A relevant PAO/CDDO/DTO is that office to whom the Deductor/DDO (TAN holder) reports remittance of TDS/TCS through book adjustment. Generally, the Central Government DDOs report TDS thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed only in electronic form in a CD/pen drive at TIN-FCs or online through AO Account at www.tin-nsdl.com web portal. The facility to submit Form No. 24G online is available free of cost. Provisional Receipt Number (PRN) is issued as an acknowledgement of the receipt of Form 24G. 8. How to register for online facility? Registration for AO Account is mandatory for filing Form No. 24G online through TIN website, www.tin-nsdl.com. Registration AO Account is required once only. AO required to submit the Form No. 24G at TIN-FC at least once to comply with the Know Your Customer (KYC) norms for registration of the AO Account. After registration, it is optional for AO either to submit the Form No.24G in CD/Pen drive at TIN-FC or online. 9. What are the functionalities available with AO Account? Through the AO Account, the AO can view the status of Form No. 24G filed, obtain BIN (Book Identification Number) details, update AO profile and upload Form No. 24G. The status tracking is based on AIN and concerned Provisional Receipt Number (PRN) of Form 24G. 10. Can the AO furnish Form No. 24G in paper form? No. Form 24G is to be filed only in electronic form. 11. Can the AO submit the electroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... http://www.ibm.com/developerworks/java/jdk or you can ask your computer vendor (hardware) to install the same for you. Form 24G Preparation Utility can be executed on Windows platform(s) Win 2K Prof. / Win 2K Server/ Win NT 4.0 Server/ Win XP Prof. To run the Form 24G Preparation Utility , click on the 24GRPU.bat file. If JRE is not installed on the computer, then on clicking 24GRPU.bat , a message will be displayed. In such cases, install JRE and try again. If appropriate version of JRE is installed, then the Form 24G Preparation Utility will be displayed. 15. What are the steps to download and install Form 24G Preparation Utility? For assistance in downloading and using Form 24G Preparation Utility, please read the instructions provided in Help in the Form 24G Preparation Utility. This utility can be used for preparation of Form 24G with upto 75,000 records. Form 24G Preparation Utility (version 1.2) should be used for regular and correction statements. 16. What is File Validation Utility (FVU)? The AO should pass the Form 24G (Regular/Correction) file generated using Preparation Utility through the File Validation Utility (FVU) to ensure format level accuracy of the file. This u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24G should be complete and correct. No fragmented statements are expected to be filed (i.e. separate statements giving details for deductions under different form type with respect to the same AIN, FY and month). However, any mistake made in an original accepted statement can be rectified by submitting a correction statement . For correction, the latest version of the RPU should be downloaded from TIN website. Form 24G corrections can also be uploaded directly at the TIN website. For direct upload at TIN Central system, AO has to first register AIN at TIN website and upload the Form 24G correction. 19. What are the different kinds of correction statements allowed? There are two different types of correction statements that can be furnished by the AO. These are listed below. M (Modify) -: For any modification in the existing Form 24G statement. X (Cancel) -: For cancellation of an existing Form 24G statement. For preparation of correction statement, the receipt number of the original statement and receipt number of the previous statement is mandatory. In case of first correction, PRN of original statement should be provided in field Receipt number of Original Statement and also in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o verify the claim of TDS deposited without production of challan. As it is a verification key, it is advised that valid BIN disseminated by AO to the respective DDO should be correctly filled in TDS statement. 23. When is BIN generated? On processing of accepted Form 24G statement, BIN is generated for each DDO record (with valid TAN) present in Form 24G statement. BIN are generated at TIN Central System and intimated to the PAOs with details of TAN and Form Type. 24. What do the PAO and DDO have to do with the BIN? PAOs have to disseminate the BINS to respective DDOs. While preparing the quarterly TDS/TCS statement, DDO has to quote the said BIN details, if tax has been paid through transfer voucher (book adjustment). BINs generated for a particular 24G are mailed to the AO on the e-mail id provided in Form 24G. In addition, AO may also download the BIN details through AO login at TIN site. 25. Under what circumstances will BIN be generated? BIN will be generated for valid TAN-DDO records added in Form 24G correction statement. BIN will be generated for DDO records where invalid TANs/TAN not present in Income Tax Department database is updated with a valid TAN. New BIN will not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N in the quarterly TDS/TCS Statement (24Q, 26Q, etc) for the tax deducted and credited through book adjustment. iv. Filing of TDS/TCS statement (24Q, 26Q etc) within the due date. v. To download Form 16/26A from TRACES website (www.tdscpc.gov.in) and timely issuance of the same to the deductees. 30. What are the consequences of non-quoting of BIN details in quarterly TDS/TCS statement? (a) BIN details and amount of TDS reported in the quarterly TDS/TCS Statement filed by the DDO will be matched with the details filed in Form No.24G filed by the PAO for verification purpose. (b) Any wrong information reported by the DDOs in TDS/TCS Statement may lead to mismatch due to which credit to the respective deductee will not be available in the deductee s Form 26AS. (c) Further details are available at TIN website www.tin-nsdl.com and ITD website www.incometaxindia.gov.in. 31. What is the format of Form 16/16A to be issued to the deductees? It is mandatory to download and generate the Form 16/16A from the TRACES portal only. Deductor is allowed to issue manually only part B of Form 16 for salary details. 32. Is there any scenario where the DDO is also required to obtain the AIN? Yes, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of statements whereby personal information, PAN correction, add/update of challan information, add/update of salary detail, add/update/movement of deductee row etc. can be done in the statements filed by the deductors, with or without the digital signatures. For further details, kindly refer the matrix below: Default Summary View Personal Information Challan Correction (Unmatched, matched Deductee + Deductee Movement PAN Correction (Annex.I) PAN Correction (Annex. II) Add Challan to statement Interest, Levy Payment Modify/Add deductee rows Delete/Add salary deducted rows Online Correction (with digital signature, 2013-14 onwards) Y Y Y Y Y Y Y Y Y Online Correction (with digital signature, prior to 201314 onwards) Y Y Y N N Y Y N N Online Correction (without digital signature, 2013-14 onwards) Y N Y N N Y Y N N Online Correction (withoutdigital signature, prior to 201314 onwards) Y N Y N N Y Y N N For more information, deductors are advised to refer to e-tutorials/FAQs available on TRACES portal. Online correction entails no charges and does away with the requirement of downloading conso file and visiting TIN-FCs. 2.1.2 With effect from 1st January, 2015, TRACES will be providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of e-TDS statement/return. After registration on TIN website, an authorization letter by the Deductor/DDO should be provided on the letter head of the organisation to NSDL. Once application is approved by NSDL, user ID is created and intimated to Deductor/DDO on their registered email ID provided at the time of registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN-FC).Deductor/DDO can login with its user ID and DSSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token no. and 8 digit receipt number is generated and displayed. There is no need to submit physical form 27A in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website. No charges are applicable for online upload of e-TDS statement/return. 4.1 Correction of e-TDS statement/return online at TIN website: Deductor/DDO can file a correction e-TDS statement/return for any modification in e-TDS statement/return accepted at TIN central system. Correction statement/return can be pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all of the second tier of his money anytime. This withdrawable account does not constitute pension investment, and would attract no special tax treatment. iii. Individuals can normally exit at or after age 60 years for tier-I of the pension system. At the exit the individual would be mandatorily required to invest 40 percent of pension wealth to purchase an annuity (from an IRDA- regulated life insurance company). In case of Government employees the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. The individual would receive a lump-sum of the remaining pension wealth, which he would be free to utilize in any manner. Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, the mandatory annuitisation would be 80% of the pension wealth. Architecture of the new Pension System i. It will have a central record keeping and accounting (CRA) infrastructure, several pension fund managers (PFMs) to offer three categories of schemes viz. option A, B and C. ii. The participating entities (PFMs and CRA) would give out easily understood information about past ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Section and for that purpose makes the following amendment in the notification of the Government of India in the Ministry of Finance, Department of Revenue (Central Board of Direct Taxes) number S.O.1048(E), dated the 24th November 2000, namely:- In the said notification, in the Table, against serial numbers 1,2 and 3 under column (3) relating to Circumstances for eligibility the words to civilians shall be omitted. (Notification No.22/F.No.142/29/99-TPL) T.K. SHAH Director ANNEXURE-X FORM NO. 10BA (See rule 11B) DECLARATION TO BE FILED BY THE ASSESSEE CLAIMING DEDUCTION U/S 80 GG I/We . ( Name of the assessee with permanent account number) do hereby certify that during the previous Year .I/We had occupied the premise .(full address of the premise) for the purpose of my/our own residence for a period of ..months and have paid Rs. . In cash/through crossed cheque, bank draft towards payment of rent to Shri/Ms/M/s .(name and complete address of the landlord). It is further certified that no other residential accommodation is owned by a) me/my spouse/my minor child/our family (in case the assessee is HUF), at .where I/we ordinarily reside/perform duties of officer or employment or c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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