7 salary tds

7/31/2019 7 Salary Tds

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WELCOME

Presentation by:

P.Imran KhanWWW.SIMPLETAXINDIa.org


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Salary Taxation


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Department Website

The relevant Acts, Rules,

Forms and Notifications areavailable at the website of the Income-tax Department-www.incometaxindia.gov.in


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TDS rates for Financial Year 2010-11

Senior Citizen Woman Others Tax (%)For Income

Between 0 to2,40,000

For IncomeBetween 0 to1,90,000

For Income Between 0 to1,60,000 0

For IncomeBetween 2,40,001to 5,00,000


For Income Between1,60,001 to 5,00,000 10



For Income Between5,00,001 to 8,00,000 20

For Income above8,00,001

For Income above8,00,001

For Income above8,00,001 30

Surcharge Surcharge 0

Education Cess Education Cess3


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Topics

WHAT IS SALARY PERQUISITES

ALLOWANCES

INCOMES WHICH DO NOT FORM PART

OF TOTAL INCOME .

DEDUCTION UNDER SECTION 16

DEDUCTION OF INTEREST PAID/ACCRUED ON SOP DEDUCTIONS UNDER CHAPTER vi A .

DUTIES OF PERSONS RESPONSIBLE FOR DEDUCTION

TAX


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What is salary ?(Sec.15,16&17)

Employer and Employee relationship An income can be taxed under the

head salaries only if there is arelationship of an employer andemployee between the payer and

payee.

WWW.SIMPLETAXINDIa.org


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What is salary ? Salary includes Wages, Any annuity or Pension, any

Gratuity, any Fees, Commission,Perquisites, Leave encashment, Arrears of salary and others.



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What is salary ?

Any salary, bonus, commissionor remuneration, by whatever name called, due to, or received by, a partner of afirm from the firm shall not be regarded as Salary.



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,received or limit specified, which

ever is less

1. Children Education Allowance :Exempt up to actual amount received

per child or Rs.100 p.m. per child up tomaximum of two children, which ever is less.

2. Hostel Expenditure Allowance :Exempt up to actual amount receivedper child or Rs.300 p.m. per child up tomaximum of two children, which ever WWW.SIMPLETAXINDIa.org


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not form part of total

income.

These payments will not be part of salary subject tolimits prescribed

LTC (Sec. 10(5)) The exemption is allowed only in respect of

fare only. Gratuity (Sec. 10(10)) Commuted value of pension (Sec. 10(10A)) Leave encashment at the time of retirement

(Sec. 10(10AA))

Provident fund receipts and RPF receipts (Sec.WWW.SIMPLETAXINDIa.org


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Central Govt / State Govt Employees Exempt

Other Employees - Exemptionwill be determined withreference to the leave to their credit at the time of retirementon superannuation, or otherwise, subject to amaximum of ten months leave.

EL Encashment



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Tax on employment (professionaltax) paid is allowable asdeduction from salary.

Entertainment Allowance : Thisdeduction is allowed only to a

Government employee to the leastof following. Actual amount received. 20% of salary exclusive of any

allowance.

section 16



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Deduction on income fromHouse property

interest up to a maximum limit of

Rs. 1,50,000 is allowed Loan taken on or after 1-4-1999 for constructing/acquiring the

residential. house and completed within three years from the

end of the financial year in which

capital was borrowed.WWW.SIMPLETAXINDIa.org

VI A / 80C


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VI A u/s.80C,80CCD&80CCD

The following investments are eligible

for deduction:

Life Insurance Premium, StatutoryProvident Fund, RPF, PPF, NSC, ULIP,

Notified Units of Mutual Fund, Re-payment of housing loan, Tuition Feepaid, fixed deposit for 5 years or morewith a scheduled Bank, Senior CitizenWWW.SIMPLETAXINDIa.org


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Deductions u/s.80C,80CCD&80CCD

Amount of deduction

allowable; grossqualifying amount or

Rs.1,00,000 which ever is lower.



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Deduction u/s.80CCF Deduction in respect of

subscription to long term

infrastructure bonds. This deduction applicable fromthe assessment year 2011-12

Maximum deduction allowableis Rs.20,000.



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Deduction u/s.80D Medical insurance premium

(Med claim Policy) paid: On the

health of taxpayer, spouse,

parents and dependent children

The premium can be paid byany mode other than cash.

It is paid out of incomeWWW.SIMPLETAXINDIa.org


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Deduction u/s.80D

Amount of deduction Rs.15,000

additional deduction Rs.5,000 is allowed if the policy

is taken on the health of senior citizen.



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Deduction in respect of maintenanceincluding medical treatment of ahandicapped dependent :

Furnish a certificate issued by themedical authority in form No.10-IA. Amount of deduction Rs.50,000 is

allowed. In case severe disability (80% or more),

Rs.1,00,000 is allowed. The person claiming deduction under

this section, he should not claim any

Deduction u/s.80DD



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Deduction u/s.80DDB Medical treatment of dependent or self

for specified disease/ailment. Amount of deduction Rs.40,000: if the

person is a senior citizen Rs.60,000 isallowed.

This deduction is not allowableby the employer.



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Deductions -u/s.80E Payment of interest on loan taken for

higher education: spouse or children

The loan has to be taken from anyfinancial institution or approvedcharitable institution.

Such amount is paid out of his incomechargeable to tax.

The deduction is available for amaximum of 8 years or till the interest

is paid, whichever is earlier.WWW.SIMPLETAXINDIa.org


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.80G

Deduction in respect of donations to certainfunds, charitable institutions etc. Deduction can be allowed by the employer

only in respect of donations made to PrimeMinister Relief Fund, Chief Ministers Relief Fund, Earthquake Fund, etc.

In respect of donations to

charitable institutions,

deductions cannot beWWW.SIMPLETAXINDIa.org


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Deductions -u/s.80GG Deduction in respect of rent paid : The assessee should not be receipt of

HRA and he should not own any house The least of the following amount isexempted

1. Rent paid in excess of 10% of totalincome before allowing deductionunder this section.

2. Rs.2000 per month.

3. 25% of total income before allowingWWW.SIMPLETAXINDIa.org


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Deduction-u/s.80GGC Any amount of contribution made by a

person to a political party or an

electoral trust is deductible.This deduction is not

allowable by the employer.



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Deductions under Chapter VI A-u/s.80U

Deduction in case of a person withdisability: blindness, low vision,

leprosy, hearing impairment, mentalretardation and mental illness. Conditions: Furnish a certificate

issued by the medical authority inform No.10-IA.

Amount of deduction (fixed)Rs.50,000 is allowed. In case severedisabilit 80% or more , Rs.1,00,000WWW.SIMPLETAXINDIa.org


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Particulars of income other than salary

Employee has to furnish particulars of income under any head other than

Salaries in a simple statement ,which is properly verified by him. Suchincome should not be a loss under any such head other than the lossunder the head Income from HouseProperty.



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Relief is available when salary isreceived in arrears or advance.

Application in Form-10E has to beobtained from the employee.

Form 10E is required to allow claim

of relief u/s. 89(1)

Relief u/s.89(1)



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Relief u/s.89(1) from 1-4-2010 (assessment year

2010-11) that no such relief shall be granted in respect of any amount received or

receivable by an assessee onhis voluntary retirement or termination of his service.



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Estimation of Income for deducting tax

Method of calculation :Estimate the salary includingperquisites for the financialyear 2010, apply the rates,

calculate the tax and divide itby 12.



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Estimation of Income for deducting tax

The amount of tax so arrived should bededucted every month in equal

installments. However, Any excess or deficit arising out of any previousdeduction can be adjusted by

increasing or decreasing the amount of subsequent deductions during thesame financial year.



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responsible for deducting

tax

DDOs to satisfy themselves of thegenuineness of claim :

The Drawing and Disbursing Officers shouldsatisfy themselves about the actualdeposits/subscriptions/payments made by theemployees, by calling for suchparticulars/information as they deemnecessary before allowing the aforesaiddeductions.



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themselves of the

genuineness of claim :

In case the DDO is not satisfied about thegenuineness of the employees claimregarding any deposit/subscription/paymentmade by the employee, he should not allowthe same, and the employee would be free toclaim the deduction/rebate on such amount byfiling his return of income and furnishing thenecessary proof etc., therewith, to thesatisfaction of the Assessing Officer.



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responsible for deducting

tax

File Quarterly statements in form No.24Q within time i.e. 15th July, 15 th

October, 15th January of the relevantfinancial year and for the last quarter is15 th May following financial year.

Challans for deposit of TDS - for salaries challan No.ITNS-281.



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Attn: Govt. DDOs

1. Who are paying taxes by Book Adjustment -submit a statement in Form No. 24G within tendays from the end of the month to the agencyauthorized by the Director General of Income-tax (Systems) in respect of tax deducted by thedeductors and reported to him for that month;and

(b) intimate the number (hereinafter referred to asthe Book Identification Number) generated by the

agency to each of the deductors in respect of WWW.SIMPLETAXINDIa.org


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Form -24G



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The deductor has to issue a certificatein Form No. 16 along with annexure Aor B and 12BA before 31 st May from

the end of financial year, in which thededuction was made.

FORM 16



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FORM 16

Form No. 16, - for SALARIES(2) The certificate referred to in sub-rule (1) shallspecify:

(a) valid permanent account number (PAN)(b) valid TAN(c) (i) book identification number;(ii) Challan identification number (d) (i) receipt number of the relevant quarterlystatement(ii) receipt numbers of all the relevant quarterly

statements for Salaries.WWW.SIMPLETAXINDIa.org


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Revised Form -16



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Annexure B of Revised Form -16

Non-Government deductors and if tax is

paid accompanied by an income-tax challanWWW.SIMPLETAXINDIa.org

i d


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If the House Property is transferredbefore expiry of five years nodeduction in the year of transfer andearlier deductions allowed will becomeincome in the year of transfer .

No deductions u/s. 80C for therepayment of principal amount if theloan is taken from the private personsand also not for commercialproperties.

Points to Ponder

?WWW.SIMPLETAXINDIa.org


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Points to Ponder Any contributions made towards the ULIP,

deposit under Senior Citizen SavingScheme, Time deposit in Post Office duringthe financial year and the same terminateswithin 5 years and LIP terminates within 2years.

The above contributions not qualified for deduction u/s.80C.



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Points to Ponder The quantum of deduction already

taken in the preceding years would be

deemed as income of the taxpayer inthe year in which contribution to the tothe above plan/scheme/deposit is

terminated.


NOT DEDUCTING TAX


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You may not be able to

cover the tax liability.

Employee may not submitthe details to arrive at the

correct liability.

I will submit thedetails inFebruary

NOT DEDUCTING TAXSTARTING FROM

FINANCIAL YEAR



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Thank you

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