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TMI BlogINCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2020-21 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 ..... Act, 1961 and the Income-tax Rules, 1962 respectively unless otherwise specified. The relevant Acts, Rules, Forms and Notifications are available at the website of the Income-tax Department - www.incometaxindia.gov.in. 2. Rates of income-tax as per Finance Act, 2020 : As per the Finance Act, 2020, income-tax is required to be deducted under section 192 of the Act from income chargeable under the head Salaries for the financial year 2020-21 (i.e., assessment year 2021-22) 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 Rs. 2,50,000. Nil 2 Where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000. 5 per cent. of the amount by which the total income exceeds Rs. 2,50,000. 3 Where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000. Rs. 12,500 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000. 4 Where the total income exceeds Rs. 10,00,000. Rs. 1,12,500 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000. B. Rates of tax for every individual, being a resident in India, who is of the age of sixty years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 115BAC are subject to the condition that the total income shall be computed without specified exemptions or deductions, set off of loss and additional depreciation. The concessional rates of tax under section 115BAC are given in table below : Sl. No. Total income Rate of tax 1. Up to Rs. 2,50,000 Nil 2. From Rs. 2,50,001 to Rs. 5,00,000 5 per cent. 3. From Rs. 5,00,001 to Rs. 7,50,000 10 per cent. 4. From Rs. 7,50,001 to Rs. 10,00,000 15 per cent. 5. From Rs. 10,00,001 to Rs. 12,50,0000 20 per cent. 6. From Rs. 12,50,001 to Rs. 15,00,000 25 per cent. 7. Above Rs. 15,00,000 30 per cent. 2.3 Surcharge on income-tax : The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 1I2A or the provisions of section 115BAC of the Income-tax Act shall be increased by a surcharge for the purposes of the Union, calculated in the case of every individual or Hindu undivided family or association of persons or body of individuals whether incorporated or not or even artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act. (a) having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of two crore rupees by more than the amount of income that exceeds two crore rupees ; (d) five crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of five crore rupees by more than the amount of income that exceeds five crore rupees. 2.4 Health and Education Cess Health and Education Cess shall be levied at the rate of four per cent. of income-tax including surcharge wherever applicable. No marginal relief shall be available in respect of such cess. 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 2020-21. 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 or Aadhaar numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of making the payment of tax mentioned in para 3.2 above, tax is to be determined at the average of income-tax computed on the basis of rate in force for the financial year, on the income chargeable under the head Salaries , including the value of perquisites for which tax has been paid by the employer himself. 3.2.2 Illustration : The income chargeable under the head Salaries of an employee below sixty years of age for the year inclusive of all perquisites is Rs. 6,00,000, out of which, Rs. 50,000 is on account of non-monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions discussed in para 3.2 above. Steps : Income chargeable under the head Salaries inclusive of all perquisites Rs. 6,00,000 Tax as per normal rates on total salary (including cess) Rs. 33,800 Average rate of tax [(33,800/6,00,000) 100] 5.63 per cent. Tax payable on Rs. 50,000 = (5.63 per cent. of 50,000) Rs. 2,815 Amount required to be deposited each month Rs. 235 = 2,815/12 The tax so paid by the employer shall be deemed to be TDS made from the salary of the employee. 3.3 Salary from more than one employer : Section 192(2) deals with situations where an indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year. 3.5 Information regarding income under any other head : (i) Section 192(2B) enables a taxpayer to furnish particulars of income under any head other than Salaries (not being a loss under any such head other than the loss under the head Income from house property ) received by the taxpayer for the same financial year and of any tax deducted at source thereon. The particulars may now be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under rule 26B(2) of the Rules and shall be annexed to the simple statement. The form of verification is reproduced as under : I, . . . . . . . . . . . . . . . . (name of the assessee), do declare that what is stated above is true to the best of my information and belief. It is reiterated that the DDO can take into account any loss only under the head Income from house property . Loss under any other head cannot be considered by the DDO for calculating the amount of tax to be deducted. It may be noted that loss under the head Income from house property can be set off only up to Rs. 2.00 lakhs with the income under any other head of income in view of the amendment to section 71 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 up to the FY in which the property was acquired or constructed (as reduced by any part of interest allowed as deduction under any other section of the Act) shall be deducted in equal instalments for the FY in question and subsequent four FYs. (c) The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of principal and interest of the loan so repaid. As discussed in para 4.6.5 section 192(2D) read with rule 26C makes it mandatory for the DDO to obtain following details/evidence in respect of interest deductible. (i) Interest payable or paid (ii) Name of the lender (iii) Address of the lender (iv) PAN or Aadhaar number as the case may be, of the lender. PAN or Aadhaar number as the case may be, of the lender being financial institution or employer, is mandatory if it is available with the employee, however in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of TDS (Form 24Q). 4.3. 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 : 4.4.1.1 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 opted to be deposited by the employer. 7th day next month 4.4.1.2.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, rule 30(3) allows for payments on quarterly basis and as per time given in Table below : Sl. No. Quarter of the financial year ended on Date for quarterly payment 1 30th June 7t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed. 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 (rule 125). 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. (rule 30(7)). 4.5 Interest, penalty and prosecution for failure to deposit tax deducted : 4.5.1 If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd certain other particulars. Rule 31 prescribes that Form 16 should be furnished to the employee by 15th June after the end of the financial year in which the income was paid and tax deducted. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. Through the Taxation and Other Law (Relaxation of Certain Provisions) Act, 2020 (No. 38 of 2020), the due date for furnishing Form 16 for FY 2019-20 to the employee has been extended up to August 15, 2020. A copy of Form 16 is enclosed. The certificate in Form 16 shall specify (a) Valid permanent account number (PAN) or Aadhaar number, as the case may be, of the deductee ; (b) Valid tax deduction and collection account number (TAN) of the deductor ; (c) (i) Book identification number or numbers (BIN) where deposit of tax deducted is without production of challan in case of an office of the Government ; (ii) Challan identification number or numbers (CIN*) in case of 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mentioned below : (a) TDS certificate (Form 16) would be generated for the deductee only if valid PAN or Aadhaar number as the case may be is correctly mentioned in the Annexure II of Form 24Q in Quarter 4 filed by the deductor. Moreover, employers are advised to ensure in Form 16 that the status of matching with respect to Form 24G/OLTAS is F . If the status of matching other than F kindly take necessary action promptly to rectify the same. It is pertinent to mention here that certain facilities have been provided to the deductors at website www.tdscpc.gov.in/including online correction of statements (Form 24Q). (b) The employer should quote the gross amount of salary (including any amount exempt under section 10 and the deductions under Chapter VI-A) in column 321 (Amount paid/credited) of Annexure I of Form 24Q as per NSDL RPU (hereafter Return Preparation Utility). (c) The employer should quote the amount of salary excluding any amount exempt under section 10 in column 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules. Information relating to the nature and value of perquisites is to be provided by the employer in Form 12BA in case salary- paid or payable is above Rs. 1,50,000. In other cases, the information would have to be provided by the employer in Form 16 itself. 4.6.4.2. An employer, who has paid the tax on perquisites on behalf of the employee as per the provisions discussed in para 3.2 of this circular, shall furnish to the employee concerned, a certificate to the effect that tax has been paid to the Central Government and specify the amount so paid, the rate at which tax has been paid and certain other particulars in the amended Form 16. 4.6.4.3. The obligation cast on the employer under section 192(2C) for furnishing a statement showing the value of perquisites provided to the employee is a crucial responsibility of the employer, which is expected to be discharged in accordance with law and rules of valuation framed thereunder. Any false information, fabricated documentation or suppression of requisite information will entail consequences thereof provided under the law. The certificates in Forms 16 and Form 12BA specified above, shall be furnished to the employee by 15th June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 1987). If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of ten thousand rupees. Similarly, as per section 139A(5B), it is obligatory for persons deducting tax at source to quote PAN or Aadhaar number as the case may be, of the persons from whose income tax has been deducted in the statement furnished under section 192(2C), certificates furnished under section 203 and all statements prepared and delivered as per the provisions of section 200(3) of the Act. 4.7.2 All tax deductors are required to file the TDS statements in Form No. 24Q (for tax deducted from salaries). As the requirement of filing TDS certificates along with the return of income has been done away with, the lack of PAN or Aadhaar number as the case may be, of deductees is creating difficulties in giving credit for the tax deducted. Tax deductors are, therefore, advised to procure and quote correct PAN or Aadhaar number as the case may be, details of all deductees in the TDS statements for salaries in Form 24Q. Taxpayers are also liable to furnish their correct PAN or Aadhaar number as the case may be, to their deductors. Non-fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement for the last quarter filed in Form 24Q (as amended by Notification No. S.O. 704(E) dated May 12, 2006) shall be treated as the annual return of TDS. Due dates of filing this statement quarter-wise is as in the Table below. Table : Due dates of filing quarterly statements in Form 24Q Sl. No. Date of ending of quarter of financial year Due date 1 30th June 31st July of the financial year 2 30th September 31st October of the financial year 3 31st December 31st January of the financial year 4 31st March 31st May of the financial year immediately following the financial year in which the deduction is made Through Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (No. 38 of 2020), the due date for furnishing quarterly statement in form 24Q, for the fourth quarter of the financial year 2019-20 i.e. quarter ending 31st March, 2020, has been extended up to 31st July, 2020 in case of all deductors. Further, the due date for furnishing such quarterly statement for first two quarters of financial year 2020-21 has been extended up to 31st March, 2021. 4.9.2 The statements referred above may be furnished in paper form or electronically under digital signat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor is an office of the Government (including State Government). In case of Government deductors PANNOTREQD to be quoted in the e-TDS statement ; (iii) mandatory quote of permanent account number PAN or Aadhaar number as the case may be, of all deductees ; (iv) furnish particulars of the tax paid to the Central Government including book identification number or challan identification number, as the case may be. (v) furnish particular of amounts paid or credited on which tax was not deducted in view of the issue of certificate of no deduction of tax under section 197 by the Assessing Officer of the payee. 4.10 TDS on income from pension : In the case of pensioners who receive their pension (not being family pension paid to a spouse) from a nationalized bank, the instructions contained in this circular shall apply in the same manner as they apply to salary-income. The deductions from the amount of pension under section 80C on account of contribution to Life Insurance, Provident Fund, NSC etc., if the pensioner furnishes the relevant details to the banks, may be allowed. Necessary instructions in this regard were issued by the Reserve Bank of India to the State Bank of India and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d profit in lieu of salary (section 17) : 5.2.1 Salary includes :- (i) wages, fees, commissions, perquisites, profits in lieu of, or, in addition to salary, advance of salary, annuity or pension, gratuity, payments in respect of encashment of leave, etc. (ii) the portion of the annual accretion to the balance at the credit of the employee participating in a recognized provident fund as consists of (rule 6 of Part A of the Fourth Schedule of the Act) : (a) contributions made by the employer to the account of the employee in a recognized provident fund in excess of 12 per cent. of the salary of the employee, and (b) interest credited on the balance to the credit of the employee insofar as it is allowed at a rate exceeding such rate as may be fixed by Central Government by notification in the Official Gazette. (iii) the contribution made by the Central Government or any other employer to the account of the employee under the New Pension Scheme as notified vide Notification F.N. 5/7/2003-ECB and PR dated December 22, 2003 (enclosed as Annexure VII) referred to in section 80CCD (para 5.5.3 of this Circular). It may be noted that, since salary includes pension, tax at source would have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called ; (c) the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from the assessee in respect of such security or shares ; (d) fair market value means the value determined in accordance with the method as may be prescribed (refer rule 3(9) of the Income-tax Rules) ; (e) option means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price ; (VII) the amount or the aggregate of amounts of any contribution made to the account of the assessee by the employer (a) in a recognised provident fund ; (b) in the scheme referred to in sub-section (1) of section 80CCD ; and (c) in an approved superannuation fund, to the extent it exceeds seven lakh and fifty thousand rupees in a previous year, (VIIA) the annual accretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 reference to only one such accommodation which has the lower value for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such accommodation. B. Valuation of the perquisite of furnished accommodation the value of perquisite as determined by the above method (in A) shall be increased by (i) 10 per cent. of the cost of furniture, appliances and equipment, or (ii) where the furniture, appliances and equipment have been taken on hire, by the amount of actual hire charges payable, and the value so arrived at shall be reduced by any charges paid by the employee himself. It is added that where the accommodation is provided by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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)) : (I) 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. However following compliances are necessary : The employer has maintained complete details of the journey undertaken for official purposes ; The employer gives a certificate that the expenditure was incurred wholly for official duties. (b) Actual expenditure incurred by the employer on the running and maintenance of motor car including remuneration to chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use (in case the motor car is exclusively for private or personal purposes of the employee or any member of his household). (c) Rs. 1800 (plus Rs. 900, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly for private or personal purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices shall be reduced from the above amount. IV Gas, electricity and 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 the employer in that behalf. However, where such educational institution itself is maintained and owned by the employer or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality if the cost of such education or such benefit per child exceeds Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(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 facility is maintained by the employer and is available uniformly to all employees, the value of such benefit would be exempt. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure with respect to the member of the household shall be a perquisite. IX. Value of subsidized/free food/non-alcoholic beverages provided by employer to an employee [rule 3(7)(iii)] : Value of taxable perquisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenditure on use for official purposes xxx Less : Amount, if any, recovered from the employee xxx xxx Amount taxable as perquisite xxx However, if the amount is incurred wholly and exclusively for official purposes it will be exempt if the following conditions are fulfilled : (i) Complete details of such expense, including date and nature of expenditure 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. XIII 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 ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 section 10(5) subject, however, to the conditions prescribed in rule 2B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence service is exempt. Gratuity received in cases other than those mentioned above, on retirement, termination, etc. is exempt up to the limit as prescribed by the Board. Presently the limit is Rs. 20 lakhs with effect from March 29, 2018 (Notification No. 16/2019/F. No. 200/8/2018-ITA-I dated March 8, 2019). 5.3.3 Any payment in commutation of pension received under the Civil Pensions (Commutation) Rules of the Central Government or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bodies at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of public sector company, a scheme of voluntary separation, is exempt from income-tax to the extent that such amount does not exceed Rs. 5,00,000 : (a) A public sector company ; (b) Any other company ; (c) An Authority established under a Central, State or Provincial Act ; (d) A Local Authority ; (e) A Co-operative Society ; (f) A university established or incorporated or under a Central, State or Provincial Act, or, an Institution declared to be a University under section 3 of the University Grants Commission Act, 1956 ; (g) Any Indian Institute of Technology within the meaning of section 3(g) of the Institute of Technology Act, 1961 ; (h) Such Institute of Management as the Central Government may by notification in the Official Gazette, specify in this behalf. The exemption of amount received under VRS has been extended to employees of the Central Government and State Government and employees of notified institutions having importance throughout India or any State or States. It may also be noted that where this exemption has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and the regulation made thereunder, to the extent it does not exceed twenty-five per cent. of the amount of contribution made by him shall be exempt. 5.3.8 Any payment from a provident fund to which the Provident Funds Act, 1925, applies or from any other provident fund set up by the Central Government and notified by it in the Official Gazette is exempt under section 10(11). 5.3.9 Under section 10(13A) of the Act, any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from income-tax to the extent as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations. According to rule 2A of the Rules, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be the least of the following : (a) the actual amount of such allowance received by the assessee in respect of the relevant period, i.e., the period during which the accommodation was occupied by the assessee during the financial year ; o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 10(14) read with rule 2BB or the sum of allowance exceeding the amount prescribed under rule shall be chargeable to tax under the head income from salary. For example no exemption is provided in rule 2BB for the training allowance paid for the posting in any training institute hence whole of the training allowance shall be included in the salary. The CBDT has prescribed guidelines for the purpose of section 10(14)(i) and 10(14)(ii) vide Notification No. S.O. 617(E) dated July 7, 1995 (F. No. 142/9/95-TPL) which has been amended vide Notification No. S.O. 403(E), dated April 24, 2000 (F. No. 142/34/99-TPL). Rule 2BB has been amended and the exemption in respect of transport allowance for financial year 2018-19 shall be available up to Rs. 3,200 per month only to the person who is blind or orthopaedically handicapped with disabilities of lower extremities, to meet his expenditure for the purpose of commuting between the place of the residence and the place of his duties. 5.3.11 Under section 10(15)(iv)(i) of the Act, interest payable by the Government on deposits made by an employee of the Central Government or a State Government or a public sector company out of his r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s who take medical insurance for themselves or for their family members (under any scheme approved by the Central Government or Insurance Regulatory and Development Authority) ; (d) As regards medical treatment abroad, the actual expenditure on stay and treatment abroad of the employee or any member of his family, or, on stay abroad of one attendant who accompanies the patient, in connection with such treatment, will be excluded from perquisites to the extent permitted by the Reserve Bank of India. It may be noted that the expenditure incurred on travel abroad by the patient/attendant, shall be excluded from perquisites only if the employee s gross total income, as computed before including the said expenditure, does not exceed Rs. 2 lakhs. For the purpose of availing exemption on expenditure incurred on medical treatment, hospital includes a dispensary or clinic or nursing home, and family in relation to an individual means the spouse and children of the individual. Family also includes parents, brothers and sisters of the individual if they are wholly or mainly dependent on the individual. It is pertinent to mention that benefits specifically exempt under sections 10(13A), 10(5), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5.4.3 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 . 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 be allowed from his gross total income : 5.5.1 Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. (section 80C) A. Section 80C, entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs. 1,50,000 : (1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual. (2) Any payment made to effect or to keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 G.S.R. 868(E), dated December 7, 2011, specifying the National Savings Certificates IX Issue as the class of Savings Certificates F No. 1-13/2011-NS-II r/w amendment Notification No. GSR 319(E), dated April 25, 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 in section 10(23D) and as notified by the Central Government. [The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification No. S.O. 1561(E), dated November 3, 2005] (7) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify ; [The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification No. S.O. 1562(E) dated November 3, 2005 and Jeevan Akshay-III vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome 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 repayment 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 from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a co-operative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act. The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 No. S.O. 1220(E), dated July 28, 2006] (17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf. (18) Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004. (19) Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981. (20) From financial year 2019-20, any contribution by employee of the Central Government to a specified account of the pension scheme referred to in section 80CCD (a) for a fixed period of not less than three years ; and (b) which is in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployee or his nominee for that Financial Year and accordingly will be charged to tax. Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C. 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 January 1, 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. No. 5/7/2003-ECB and PR dated December 22, 2003 National Pension System-NPS or as may be notified by the Central Government. However, the deduction shall not exceed an amount equal to 10 per cent. 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 a deduction in computation of his income, of the whole of the amount paid or deposited in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government or any other employer to a pension scheme under section 80CCD(2) shall be excluded from the limit of Rs. 1,50,000 provided under this section. 5.5.4 Deduction in respect of investment made under an equity savings scheme (section 80CCG) : Section 80CCG provides deduction with effect from assessment year 2013-14 in respect of investment made under notified equity saving scheme. Rajiv Gandhi Equity Savings Scheme 2012 has been notified vide S.O. No. 2777(E), dated November 23, 2012 (subsequent corrigendum S.O. No. 2835(E), dated December 5, 2012) and amended vide Notification No. S.O. 3693(E), dated December 18, 2013 as a scheme under this section. The scheme was modified in December 2013 vide Notification No. S.O. 3693, dated December 18, 2013 (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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion shall be allowed on proportionate basis for the number of years for which health insurance cover is provided, subject to the monetary limits specified above. Here (i) family means the spouse and dependent children of the employee. (ii) 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. 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. (II) Lump sum payment of health insurance premium In case, a lump sum amount is paid to effect or to keep in force an insurance on health for more than a year, proportionate deduction (appropriate fraction) will be allowable for the year in which it was paid and for subsequent year/years in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person with severe disability, a higher deduction of Rs. 1,25,000 shall be allowable. DDOs should note that 80DD deduction is in case of the dependent of the employee whereas 80U deduction is in case of the employee himself. However, under both the sections, the employee shall furnish to the DDO the following : 1. A copy of the certificate issued by the medical authority as defined in rule 11A(1) in the prescribed form as per rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein. 2. Further in cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesaid 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 80U 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 Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 ; (h) specified company means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. 5.5.7. Deduction in respect of medical treatment, etc. (section 80DDB) : Section 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, of any amount actually paid for the medical treatment of such disease or ailment as may be specified in rule 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 Rs.40,000 whichever is less. Now the deduction can be allowed on the basis of a prescription from an oncologist, an 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 years or more) then the deduction up to one lakh rupees is allowed. For the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80EEA introduced by the Finance (No. 2) Act, 2019 (No. 23 of 2019), allows deduction from gross total income of an individual (not eligible to claim deduction under section 80EE) in respect of the interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property if following conditions are met : (i) the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2021 ; (ii) the stamp duty value of residential house property does not exceed forty-five lakh rupees ; (iii) the assessee does not own any residential house property on the date of sanction of loan. For the purposes of this section, (a) the expression financial institution shall have the meaning assigned to it in clause (a) of sub-section (5) of section 80EE ; (b) the expression stamp duty value means value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property. The amount of this deduction shall not exceed Rs. 1,50,000 and it shall be allowed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parate 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 of 2005, dated January 12, 2005. No deduction under this section is allowable in case the amount of donation exceeds Rs. 2,000 unless the amount is paid by any mode other than cash. 5.5.12 Deductions is respect of rents paid (section 80GG) : Section 80GG allows the employee to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions : (a) the employee has not been in receipt of any house rent allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act ; (b) the employee files the declaration in Form No. 10BA (annexure X) ; (c) The employee does not own : (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the certificate under section 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 under section 35AC(2)(a) National Committee for Promotion of Social and Economic Welfare 6. A rural development fund notified under section 35CCA(1)(c) set up and notified by the Central Government 7. National Urban Poverty Eradication Fund notified under section 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 Rs. 10,000 and is paid in cash. With effect from June 1, 2020 if the amount of donation exceeds Rs. 2,000 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm or any member of the association or any individual of the body if said interest is derived from any deposit held by, or on behalf of, a firm, an association of persons or a body of individuals. For this purpose, 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. However, taxpayers claiming deduction under section 80TTB shall not be eligible for deduction under section 80TTA. 6. Rebate of Rs. 12,500 for individuals having total income up to Rs. 5 lakh [section 87A] Finance Act, 2019 (No. 7 of 2019) provided relief in the form of rebate to individual taxpayers, resident in India, who are in lower income bracket, i.e. having total income not exceeding Rs. 5,00,000. The amount of rebate available under section 87A is Rs. 12,500 or the amount of tax payable, whichever is less from financial year 2019-20. 7. TDS on payment of accumulated balance under recognised provident fund and contribution from approved superannuation fund : 7.1 The trustees of a Recognized Provident Fund, or any person authorized by the regulations of the Fund to make payment of accumulated balances due to employees, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployer s business or other cause beyond the control of employee, or (iii) if, on cessation of his employment, the employee obtains employment with any other employer, to the extent amount of such accumulated balance is transferred to his individual account in any recognized provident fund maintained by such other employer, or (iv) if the entire balance standing to the credit of employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government. When the accumulated balance due and becoming payable to an employee includes any amount transferred from his individual account in any other recognized provident fund(s) maintained by his former employer(s), then in computing the period of continuous service the period or periods of continuous services rendered under former employer(s) shall be counted for the purposes of (i) and (ii) above. Under the above four situations at (i) to (iv), the accumulated balance due and payable to the employee is not liable for TDS under section 192A. 8. DDOs to obtain evidence/proof of claims : For the purpose of estimating income of the assessee or computing tax deductions, section 192(2D) pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.8. Rebate as per section 87A up to Rs. 12,500 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 as increased by the surcharge if applicable so arrived at shall be increased by health and education cess at the rate of 4 per cent. to arrive at the total tax payable. 9.4 The amount of total tax payable as arrived at para 9.3 should be deducted every month in equal instalments. 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, 2020 (No. 12 of 2020) the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (No. 38 of 2020), the relevant circulars/notifications, etc. 10.2 In case any assistance is required, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere disability) 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 4,70,000 2 Less: Standard deduction u/s 16(ia) 50,000 3 Add: Income from Other Sources Interest Income on Savings Account Rs 12,000 4 Gross Total Income 4,32,000 5 Less: Deduction U/s 80DD (Restricted to Rs.75,000/- only) 60,000 6 Less: Deduction U/s 8OC (i) GPF Rs.25,000/- (ii) LIP Rs.10,000/- = Rs.35,000/- 35,000 7 Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-) 10000 8 Total Income 2,97,000 9 Income Tas thereon/payable (includes Rebate of Rs 12500 as per Section 87A) Nil 10 Add: Health Education Cess @ 4%. Nil 11 Total Income payable Nil 12 Rounded off to Nil @or Aadhaar number, as the case may be, # It may be noted that tax liability may not be the same in case taxpayer opts for concessional tax regime under section 115BAC of the Act. Example 3 For Assessment Year 2021-22 Calculation or 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 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of HRA received = 1,40,000 (b) Expenditure of rent in excess of 10% of salary (including D.A- presuming that D.A. is taken for retirement benefit) (1,44,000-55,000) = 89,000 (c) 50% of Salary (Basic + DA) = 2,75,000 [Bombay/Kolkata/Delhi/Chennai] or 40% of salary (Basic + DA) in case of other cities 89,000 Gross Total Income 6,01,000 Less: Deduction U/s 80C (i) GPF Rs. 36,000/- (ii) LIC Rs.4,000/- (iii) Investment in Unit-Linked Insurance plan Rs.50,000 Total = Rs.90,000/- 90,000 5 Total Income 5,11,000 Tax payable 14700 Add: Health Education Cess @ 4% 588 Total Income Tax payable 15288 Rounded off to 15290 @or Aadhaar number, as the case may be. # It may be noted that tax liability may not be the same in case the taxpayer opts for concessional tax regime under section 115BAC of the Act. Example 5 For Assessment Year 2021-22 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 7,50,000 2 Bonus 1,40,000 3 Free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired by employee 1,20,000 9 Repayment of House Building Loan (Principal) 60,000 10 Tuition Fees for three children (Rs.10,000 per child) 30,000 Computation of total income and tax payable thereon S.No. Particulars Rupees 1 Gross Salary (Basic + DA + HRA + SDA) 7,42,000 Less: House rent allowance exempt U/s 10 (13A) Least of: (a) Actual amount of HRA received: Rs.1,80,000 (b) Expenditure on rent in excess of 10% of salary (Including D.A.) assuming D.A. is included for retirement benefits (1,20,000-50,000): Rs.70,000 (c) 50% of salary (including D.A.) : Rs. 2,50,000 70,000 2 Less: Standard deduction u/s 16(ia) 50,000 3 Gross Total Taxable Income 6,22,000 4 Less: Deduction U/s 80C (i) Provident Fund: 60,000 (ii) LIP: 10,000 (iii) NSC VIII Issue: 30,000 (iv) Repayment of HBA: 60,000 (v) Tuition Fees (Restricted to two children): 20,000 Total: 1,80,000 Restricted to 1,50,000 1,50,000 5 Total Income 4,72,000 6 Income Tax thereon/payable (includes Rebate of Rs.12500 as per Section 87A) Nil 7 Add: Health Education Cess @ 4% Nil 8 Total Income Tax payable Nil 9 Rounded off to Nil @ or Aadhaar number, as the case may be # It may be noted that tax liability may not be the same in case the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Particulars Rupees 1. Basic pay p.m. 13,000 2. Bonus for the year received in July, 2019 7,200 3. Club facility (for private use only) Expenditure by employer p.m. 700 4. House Rent Allowance p.m. 2,800 5. Employer s contribution to URPF p.m. (Mr. A also made equal contribution) 1,000 W.e.f. 01.11.2019, Mr. A joined PQR Ltd., with following pay package: 1. Basic pay p.m. 18,000 2. House Rent Allowance p.m. 1,600 3. Club facility (for private use only) Expenditure by employer p.m. 1,100 4. Use of car for journey between office and residence Employer s expenditure p.m. 600 5. Employer s contribution to RPF p.m. (Mr. A. also made equal contribution) 2,000 Other particulars of Mr. A are as under: 1. Mr. A resides at Amritsar paying a monthly rent of 3,500 2. Mr. A s income from other sources 1,35,000 3. Mr. A contributed to LIC/PPR/NSC etc. 20,000 Computed Mr. A s taxable income and tax liability for A.Y. 2020-21. Computation of Tax S.No. Particulars Rupees 1. Income from Salary (a) From XYZ Ltd. Basic pay (Rs.13,000 7) 91,000 Bonus 7,200 Club facility (Rs.700 7) Rupees 4,900 H.R.A (Rs.2,800 7) 19,600 Less: Exempt u/s 10(13A) 15,400 4,200 Employer s Contribution to U.R.P.F. 1,07,300 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... House Rent Allowance 1,17,504 6,49,616 Transport Allowance 1.3.2019 to 30.06.2019 @ Rs.3200 p.m. 12,800 1.7.2019 to 31.12.2019 @ Rs.3780 p.m. 22,680 1.2020 to 28.02.2020 @ Rs.3852 p.m. 7704 43,184 43,184 6,92,800 Honorarium 3,000 Fees (2/3 retained by him) 34,800 Total Salary 7,30,600 Less: Standard Deduction u/s section 16(ia) 50,000 Net Salary 6,80,600 2. Income from House Property Self-occupied u/s 23(2)(a) where property is acquired/constructed with borrowed capital on or after 1.4.1999 and such acquisition/construction computed within five years from the end of FY in which capital was borrowed. Nil Less: Interest on HDFC Loan (upto Rs.2,00,000) 2,00,000(-) 2,00,000 Gross Total Income 4,80,600 Less: Deduction u/s 80 C - GPF @ Rs.4,700/- p.m. 56,400 - CGEGIS @ Rs. 500/- p.m. 6,000 - Life Insurance Premium 10,500 - Repayment of HDFC Loan 95,000 - Deposit in public Provident Fund 10,000 1,77,900 1,50,000 Restricted to a maximum of Taxable Income 3,30,600 Computation of Tax Liability Tax payable 4,030 Less: Rebate u/s 87A 4,030 Net Income-tax payable Nil Add: Health Education Cess @4%. Nil Total Tax Payable Nil # It may be noted that tax liability may not be the same in case the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar number of the employee: 3. Financial year: Details of claims and evidence thereof Sl. No. Nature of claim Amount (Rs.) Evidence / particulars (1) (2) (3) (4) 1 House Rent Allowance: (i) Rent paid to the landlord (ii) Name of the landlord (iii) Address of the landlord (iv) Permanent Account Number or Aadhaar number, as the ease may be, of the landlord Note: Permanent Account Number or Aadhaar number, shall be furnished if the aggregate rent paid during the previous year exceeds one lakh rupees 2 Leave travel concessions or assistance 3 Deduction of interest on borrowing: (i) Interest payable/paid to the lender (ii) Name of the lender (iii) Address of the lender (iv) Permanent Account Number or Aadhaar number of the lender (a) Financial Institutions (if available) (b) Employer (if available) (c) Others 4 Deduction under Chapter VI-A (A) Section 80C, 80CCC and 80CCD (i) Section 80C (a) (b) . (c) (d) (e) (f) (g) (ii) Section 80CCC (iii) Section 80CCD (B) Other sections (e.g. 80E, 80G, 80TTA, etc.) under Chapter VI-A. (i) section . (ii) section . (iii) section . (iv) section . (v) section . Verification I, .. son/daughter of................... do hereby certify that the information g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted along with the provisional receipt of original Form 24G and SSR to TIN-FC. On successful acceptance of correction 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. 2. Online upload or Form 24G at TIN websites: For online upload of Form 24G at TIN website, the Accounts Office Identification Number (AIN) is a pre-requisite. For online AIN registration, AO need to file at least one Form 24G through TIN-FC. After AIN registration, AO can file Form 24G through AO Account at TIN website. Preparation and validation of correction Form 24G is in line with regular Form 24G (submitted at TIN-FC). The validated Form 24G correction file (.fvu file) is to be uploaded at TIN website. There is no need to submit SSR in online upload. For Form 24G accepted at TIN Central System an online acknowledgement containing a 15 digit token number is generated and displayed to the AO. The format of the acknowledgement is identical to the one issued by the TIN-FC. No charges are applicable to AOs for online upload of Form 24G. On login, AO can also View/Download BIN details and update demographic details. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form 24G in different scenarios. 3. Can the same office/officer also act as DDO and AO? Ordinarily, the PAO office is the one to whom the DDO reports the TDS and therefore, both should be from different offices. However, where the DDO and AO are the same, as in the case of CDDOs, the statistics report of Form 24G should be counter signed by his superior officer. 4. What is AIN and who should apply? Accounts Office Identification Number (AIN) is a unique seven digit which is allotted by the Directorate of Income Tax (Systems), Delhi, to every AO. Each AO is uniquely identified in the system by this number. AOs are required to apply for AIN with jurisdictional TDS office. The AIN application can be downloaded from TIN site. Every AIN holder is required to file Form 24G. Each DDO is identified in the system by a Tax Deduction and Collection Account Number (TAN). This number is allotted by Income Tax Department. 5. Where should the Accounts Office Identification Number (AIN) application be submitted? The duly filled and signed application for AIN allotment is to be submitted in physical form by the PAO / CDDO / DTO to the jurisdictional CIT (TDS). Complete and correct AIN application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary; nature of deduction wise (TDS Salary /TDS Non-salary / TDS Non-salary Non-resident / TCS). DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA). DDOs Which are associated with the AO. If the AO wants to add/delete or update details of DDO, same should be mentioned in the statement. 13. What is the procedure to prepare the Form 24G statement? The AOs can prepare Form 24G either by using in-house facilities, third party software or by using Form 24G Preparation Utility developed by NSDL, which is freely downloadable from the TIN web-site ( www.tin-nsdl.com ) or ITD website ( www.incometaxindia.gov.in ). Once the statement is prepared, the AO shall validate the same by using File Validation Utility (FVU) developed by NSDL and freely available at the TIN or ITD website. The statement can be furnished in Compact Disk (CD) at any of the TIN-Facilitation Centres (TIN-FC) managed by NSDL along with Form 24G Statement Statistics Report (generated through File Validation Utility), duly signed by the AO. The list of TIN-FCs is available at TIN or ITD website. Once Form 24G is accepted by the TIN-FC, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the computer where the Form 24G FVU is being installed. JRE is freely downloadable from http://java.sun.com and http://www.ibm.com/developerworks/java/jdk or you can request your computer vendor (hardware) to install the same for you. The Form 24G FVU setup comprises of two files, namely- Form 24G FVU.bat : This is a setup program for installation of FVU. Form 24G_FVU_STANDALONE.jar : This is the FVU program file. These files are in an executable zip file (Form24GFVU) (version 1.2). These files are required for installing the Form 24G FVU. Instructions for extracting and setup are given in: Form 24G FVU Extract and Setup 17. After preparation of Form No. 24G statement through RPU, three files are generated when such statement passes through FVU. Is the AO required to take all three files in CD /Pen drive to TIN-FC? When a valid file is passed through the FVU, the following three files are generated :- (a) The upload file (b) Form 24G statement Statistics Report and (c) Form 24G. Every Form 24G (upload file) mentioned at Sr. No. (a) is to be saved in CD and the same should be accompanied with the Statement Statistic Report mentioned at Sr. No. (b), in paper form duly signed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Disbursing Officer) etc. Modifications in AIN (Account office Identification Number), Financial Year and Month are not allowed. There are three modes by which changes can be made in the DDO details provided in original Form 24G statement: Add: DDO records can be added to the original Form 24G statement Update: details of DDO (i.e. TAN, TAN Name, demographic and contact details, amount of tax deducted and remitted, nature of deduction) can be updated for the DDO records provided in original or subsequent correction statement Delete: DDO records provided in original Form 24G or subsequent correction statement can be deleted M-type correction statement will always contain AO details and details of DDO which are added and/or deleted. 21. What is X Type of Correction Statement? This type of correction statement is to be furnished by AO if it wishes to cancel an existing Form 24G statement. Filing of Correction type X will allow AOs to file regular Form 24G for the same primary key (AIN, Financial year and Month). This type of correction is to be filed only if the Form 24G has been filed with wrong AIN, F.Y. or Month. 22. What is BIN? BIN stands for Book Identification Number for each f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in Form 24G? What are the consequences of such mismatch? (i) Instances of wrong/incorrect reporting of BIN by the DDOs in the TDS/TCS Statement have been observed. Reporting of incorrect BINs and corresponding amount in TDS statement will lead to mismatch with the respective amount as reported in the Form No. 24G. In this situation, the corresponding deductees may not get credit of the TDS/TCS. Therefore, the BIN as disseminated by the respective PAO should be reported correctly along with the corresponding amount in the TDS, TCS Statement filed by the DDOs. (ii) In a number of cases, one distinct DDO has been found to be reported by more than one AO in the Form No. 24G for the same form type of TDS statement which is not a valid scenario. The DDOs and respective AOs are advised to reconcile the issue and one DDO should be mapped to one AO only for a particular form type for a particular month. 28. What are the duties of PAOs/DTOs/CDDOs? i. To apply for AIN with jurisdictional TDS office. AIN application can be downloaded from TIN site. ii. To obtain correct TAN from the reporting DDOs. iii. To file Form No. 24G (in CD, DVD, Pen Drive), within 10 days from the end of the month, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e form 24G for monthly reporting of these book adjustment entries and file quarterly TDS statements as TAN der by quoting the corresponding BINs. *** ANNEXURE V Person Responsible for filing Form No. 24G in case of State Govt. Departments ANNEXURE VI POINT NO.4.9 OF DRAFT CIRCULAR OF DEDUCTION OF TAX AT SOURCE FROM SALARIES UIS 192 OF THE INCOME TAX ACT, 1961 - FINANCIAL YEAR 2015-16- PROCEDURE OF PREPARATION OF QUARTERLY STATEMENT OF DEDUCTION OF TAX UNDER SECTION 200(3) OF THE ACT I. Quarterly e-TDS statement/return should be prepared by Deductor/DDO as per the data structure (File Format) prescribed by the DIT (Systems), Delhi which is available on TIN website www.tin-nsdl.com . Deductor/DDO can prepare e-TDS statement/return either by using in-house facilities, third party software or by using Return Preparation Utility (RPU) developed by NSDL e-Governance Infrastructure Limited (NSDL), which is freely downloadable from the TIN website. After preparation of e-TDS statement/return, the Deductor/DDO is required to validate the same by using the File Validation Utility (FVU) which is freely available on TIN website. 2. Procedure of furnishing of e-TDS statement/return at TIN Facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file that is available at TRACES ( www.tdscpc.gov.in ). Validation of correction statement is in line with regular e-TDS statement, physical Form 27A duly signed and Statement Statistical Report at TIN-FC. On successful acceptance of correction e-TDS statement at the TIN-FC, an acknowledgement containing a unique 15 digit token no. is provided to the Deductor/DDO. Deduetor/DDO can view the status of e-TDS statement on TRACES website. 3. Procedure of preparation and furnishing of paper TDS statement/return at TIN-Facilitation Centres (TIN-FCs): All statement/return in Form 24Q are required to be furnished in computer media except in case where the number of deductee records are equal to or less than 20. Paper statement/return duly filled and signed by the Deductor/DDO can be furnished at TIN-FC. On successful acceptance of paper statement/return at the TIN-FC, an acknowledgment containing a unique 15 digit token no. is provided to the Deductor/DDO. Deductor/DDO can view the status of paper statement/return on TIN website. No charges are applicable for paper TDS statement/return. 3.1. Correction in paper statements/returns: The physical TDS statement/return is to be filed again in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no need to submit copy of provisional receipt of regular e-TDS Statement/return, physical Form 27A and SSR in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website. 5. For FAQs and further details, Deductors/DDOs are advised to log on website www.tin-nsdl.com. ****** For FAQs and further details, Deductors/DDOs are advised to log on website www.tin-nsdl.com ANNEXURE-VII MINISTRY OF FINANCE (Department of Economic Affairs) (ECB PR Division) NOTIFICATION New Delhi, the 22nd December, 2003 F.No. 5/7/2003-ECB PR- The government approved on 23rd August, 2003 the proposal to implement the budget announcement of 2003-04 relating to introducing a new restructured defined contribution pension system for new entrants to Central Government service, except to Armed Forces, in the first stage, replacing the existing system of defined benefit pension system. i. The system would be mandatory for all new recruits to the Central Government service from 1 st January 2004 (except the armed forces in the first stage). The monthly contribution would be 10 percent of the salary and DA to be paid by the employee and matched by the Central government. However, there wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (i) of clause (18) of Section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government, he/shereby specifies the gallantry awards for the purposes of the said Section, mentioned in column 2 of the table below awarded in the circumstances as mentioned in corresponding column 3 thereof:- Table SI. No. Name of gallantry award Circumstances for eligibility (1) (2) (3) 1. Ashok Chakra When awarded to Civilians for gallantry 2. Kirti Chakra -do- 3. Shaurya Chakra - do- 4. SarvottanJeevanRaksha When awarded to Civilians for bravery Padak displayed by them in life saving acts. 5. UttamJeevanRaksha Medal -do- 6. JeevanRakshaPadak - do - 7. President's Police Medal When awarded for acts of exceptional for gallantry courage displayed by members of police forces, Central police or security forces and certified to this effect by thehe/shead of the department concerned 8. Police Medal for Gallantry - do- 9. Sena Medal When awarded for acts of courage or conspicuous gallantry and supported by certificate issued to this effect by relevant service he/sheadquarters. 10. NaoSena Medal -do- 11. VayuSena Medal - do 12. Fire Services Medal for Gallantry When awarded for acts of courag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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