Income Tax Tds Instructions

8/12/2019 Income Tax Tds Instructions

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Income Tax TDS on Salary Rate & Provisions A.Y. 2012-13

TDS on Salary Rate & Provisions A.Y. 2012-13

on!ay" A#ril 30" 2012" $%$ Income Tax

'eat(re!")oti*ication

TDS on Salary Provisions Applicable for A.Y. 2012-13 !inancial Year 2011-12 alon"

#it$ for%at of !or%s an 'nerta(in"s

Re*erence is invite! to +irc(lar )o.0$,2010 !ate! 13.12.2010ere/y te rates o* !e!(ction

o* income-tax *rom te #ayment o* income (n!er te ea! Salaries (n!er Section 12 o*

te Income-tax Act" 114ereina*ter 5te Act67" !(rin8 te *inancial year 2010-2011" ere

intimate!. Te #resent +irc(lar contains te rates o* !e!(ction o* income-tax *rom te

#ayment o* income car8ea/le (n!er te ea! Salaries !(rin8 te *inancial year 2011-2012

an! ex#lains certain relate! #rovisions o* te Income-tax Act.

2. !)*A*+, A+T2011

As #er te 'inance Act" 2011" income-tax is re9(ire! to /e !e!(cte! (n!er Section 12 o* te

Income-tax Act 11 *rom income car8ea/le (n!er te ea! Salaries *or te *inancial

year 2011-2012 4i.e.Assessment Year 2012-20137 at te *olloin8 rates%

RAT,S ! )*+/,-TA

A. *or%al Rates of ta

1. :ere te total income !oes

not excee! Rs. 1"$0"000,-.

Nil

2. :ere te total income excee!s

Rs. 1"$0"000 /(t !oes not excee! Rs.

"00"000,-

10 #er cent o* te amo(nt /y ic

te total income excee!s Rs.

1"$0"000,-

3. :ere te total income excee!s

Rs. "00"000,- /(t !oes not excee!Rs. $"00"000,-.

Rs. 32"000,- #l(s 20 #er cent o* te

amo(nt /y ic te total incomeexcee!s Rs. "00"000,-.

;. :ere te total income excee!s

Rs. $"00"000,-.

Rs. 2"000,- #l(s 30 #er cent o* te

amo(nt /y ic te total income

excee!s Rs. $"00"000,-.

. Rates of ta for a #o%an resient in )nia an belo# sity years of a"e at any ti%e

4rin" t$e financial year

1. :ere te total income !oesnot excee! Rs. 1"0"000,-. Nil

2. :ere te total income

excee!s Rs. 1"0"000 /(t !oes not

excee! Rs. "00"000,-.

10 #er cent" o* te amo(nt /y ic


1"0"000,-


excee!s Rs. "00"000,- /(t !oes

not excee! Rs. $"00"000,-.

Rs. 31"000,-plus20 #er cent o* te


excee!s Rs. "00"000,-.

;. :ere te total income

excee!s Rs. $"00"000,-.


amo(nt /y ic te total incomeexcee!s Rs. $"00"000,-.
http://taxguru.in/category/income-tax/http://taxguru.in/income-tax/tds-salary-provisions-applicable-ay-201213-financial-year-201112-format-forms-undertakings.htmlhttp://taxguru.in/category/income-tax/http://taxguru.in/type/featured/http://taxguru.in/type/notification/http://taxguru.in/income-tax/incometax-deduction-salaries-financial-year-20102011-section-192-incometax-act-1961.htmlhttp://taxguru.in/category/income-tax/http://taxguru.in/income-tax/tds-salary-provisions-applicable-ay-201213-financial-year-201112-format-forms-undertakings.htmlhttp://taxguru.in/category/income-tax/http://taxguru.in/type/featured/http://taxguru.in/type/notification/http://taxguru.in/income-tax/incometax-deduction-salaries-financial-year-20102011-section-192-incometax-act-1961.html


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+. Rates of ta for an inivi4al resient in )nia an of t$e a"e of sity years or %ore

b4t less t$an ei"$ty years at any ti%e 4rin" t$e financial year

1. :ere te total income !oesnot excee! Rs. 2"0"000,-.

Nil


excee!s Rs. 2"0"000 /(t !oes not

excee! Rs. "00"000,-.

10 #er cent" o* te amo(nt /y ic


2"0"000,-



not excee! Rs. $"00"000,-.



excee!s Rs. "00"000,-.

;. :ere te total income

excee!s Rs. $"00"000,-.

Rs. $"000,-plus30 #er cent o* te

amo(nt /y ic te total incomeexcee!s Rs. $"00"000,-.

D. )n case of every inivi4al bein" a resient in )nia #$o is of t$e a"e of ei"$ty years

or %ore at any ti%e 4rin" t$e financial year

1. :ere te total income !oesnot excee! Rs. "00"000,-

Nil



not excee! Rs. $"00"000,-

20 #er cent o* te amo(nt /y ic


"00"000,-


excee!s Rs. $"00"000,-



excee!s Rs. $"00"000,-

S4rc$ar"e on )nco%e ta

Tere ill /e no s4rc$ar"eon income tax #ayments /y in!ivi!(al tax#ayers !(rin8 'Y

2011-12 4AY 2012-137.

,4cation +ess on )nco%e ta

Te amo(nt o* income-tax sall /e increase! /y

t#o percent o* te income-tax.

Aitional s4rc$ar"e on )nco%e Ta 5Seconary an 6i"$er ,4cation +ess on

)nco%e-ta7

'rom 'inancial Year 200=-0$ onar!s" an a!!itional s(rcar8e is car8ea/le at te rate o*

one percento* income-tax 4not incl(!in8 te


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3.1


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te income (n!er te ea! Salaries !(e or receive! *rom te *ormer,oter em#loyer an!

also tax !e!(cte! at so(rce tere *rom" in ritin8 an! !(ly veri*ie! /y im an! /y te

*ormer,oter em#loyer. Te #resent, cosen em#loyer ill /e re9(ire! to !e!(ct tax at

so(rce on te a88re8ate amo(nt o* salary 4incl(!in8 salary receive! *rom te *ormer or oter

em#loyer7.

Relief >$en Salary Pai in Arrear or Avance

3. Fn!er s(/-section 42A7o* section 12 ere te assessee" /ein8 a Government servant or

an em#loyee in a com#any" co-o#erative society" local a(tority" (niversity" instit(tion"

association or /o!y is entitle! to te relie* (n!er S(/-section 417 o* Section ?8" e may

*(rnis to te #erson res#onsi/le *or ma@in8 te #ayment re*erre! to in Para 43.17" s(c

#artic(lars in 'orm )o. 10< !(ly veri*ie! /y im" an! tere(#on te #erson res#onsi/le as

a*oresai! sall com#(te te relie* on te /asis o* s(c #artic(lars an! ta@e te same into

acco(nt in ma@in8 te !e!(ction (n!er Para43.17 a/ove.

Explanation :- For this purpose University means a University established or

incorporated by or under a Central, State or Provincial Act, and includes an institution

declared under section o! the University "rants Commission Act, #$%&' o! #$%&(, to be

University !or the purposes o! the Act.

:it e**ect *rom 1,0;,2010 4AY 2010-117" no such relie! shall be )ranted in respect o! any

amount received or receivable by an assessee on his voluntary retirement or termination o!

his service, in accordance *ith any scheme or schemes o! voluntary retirement or in the case

o! a public sector company re!erred to in sub-clause 'i( o! clause '10+( o! section #+ 'read

*ith ule A(, a scheme o! voluntary separation, i! an e/emption in respect o! any amountreceived or receivable on such voluntary retirement or termination o! his service or

voluntary separation has been claimed by the assessee under clause '10+( o! section #+ in

respect o! such, or any other, assessment year

3. 4i7 S(/-section 42H7 o* section 12 ena/les a tax#ayer to *(rnis #artic(lars o* income

(n!er any ea! oter tan Salaries 4not /ein8 a loss (n!er any s(c ea! oter tan te

loss (n!er te ea! income *rom o(se #ro#erty7 receive! /y te assesse *or te same

*inancial year an! o* any tax !e!(cte! at so(rce tereon. 'orm no. 12+" ic as earlier

#rescri/e! *or *(rnisin8 s(c #artic(larsas since /een omitte! *rom te Income Tax R(les

/y te IT 42;tamen!ment7 R(les" 2003" .e.*. 01.10.2003. >oever" te #artic(lars mayno /e *(rnise! in a si%plestate%ent" ic is #ro#erly veri*ie! /y te tax#ayer in te

manner as #rescri/e! (n!er R(le 2H427 o* te Income Tax R(les"12 an! sall /e annexe!

to te sim#le statement. Te *orm o* veri*ication is re#ro!(ce! as (n!er

!R/ ! @,R)!)+AT)*

) . 5na%e of t$e assesse7 o eclare t$at #$at is state above is tr4e to

t$e best of %y infor%ation an belief.

4ii7 S(c income so(l! not /e a loss (n!er any s(c ea! oter tan te loss (n!er te ea!Income *rom >o(se Pro#erty *or te same *inancial year. Te #erson res#onsi/le *or

ma@in8 #ayment 4DD7 sall ta@e s(c oter income an! tax !e!(cte! at so(rce" i* any" on

s(c income an! te loss" i* any" (n!er te ea! Income *rom >o(se Pro#erty into acco(nt

*or te #(r#ose o* com#(tin8 tax !e!(cti/le in terms o* section 1242H7 o* te Income-tax

Act. >oever" tis s(/-section sall not in any case ave te e**ect o* re!(cin8 te tax

!e!(cti/le 4exce#t ere te loss (n!er te ea! Income *rom >o(se Pro#erty as /een

ta@en into acco(nt7 *rom income (n!er te ea! Salaries /elo te amo(nt tat o(l! /e

so !e!(cti/le i* te oter income an! te tax !e!(cte! tereon a! not /een ta@en into

acco(nt6. In oter or!s" t$e DD can ta(e into acco4nt any loss 5ne"ative inco%e7 only

4ner t$e $ea :inco%e fro% 6o4se Property< an no ot$er $ea for #or(in" o4t t$ea%o4nt of total ta to be e4cte.B :ile ta@in8 into acco(nt te loss *rom >o(se

Pro#erty" te DD sall ens(re tat te assessee *iles te !eclaration re*erre! to a/ove an!


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encloses tereit a com#(tation o* s(c loss *rom >o(se Pro#erty. 'olloin8 !etails sall

/e o/taine! an! @e#t /y te em#loyer in res#ect o* loss claime! (n!er te ea! income

*rom o(se #ro#erty se#arately *or eac o(se #ro#erty%

4A7 +om#(tation o* income (n!er te ea! income *rom o(se #ro#erty s#eci*yin8

4a7 Gross ann(al rent,val(e

4/7 (nici#al Taxes #ai!" i* any

4c7 De!(ction claime! *or interest #ai!" i* any

4!7 ter !e!(ctions claime!

4H7 A!!ress o* te #ro#erty

4+7 Amo(nt o* loan" i* anyJ an!

4D7 )ame an! a!!ress o* te len!er 4loan #rovi!er7

4iii7 S(/-section 42+7 lays !on tat a #erson res#onsi/le *or #ayin8 any income car8ea/le

(n!er te ea! salaries sall *(rnis to te #erson to om s(c #ayment is ma!e a

statement 8ivin8 correct an! com#lete #artic(lars o* #er9(isites or #ro*its in lie( o* salary

#rovi!e! to im an! te val(e tereo* in *orm no. 12HA 4Annex(re-II7. 'orm no. 12HA

alon8it *orm no. 1" as iss(e! /y te em#loyer" are re9(ire! to /e #ro!(ce! on !eman!

/e*ore te Assessin8 **icer in terms o* Section 13+ o* te Income Tax Act.

+onitions for +lai% of De4ction of )nterest on orro#e +apital for +o%p4tation of

)nco%e !ro% 6o4se Property

3.=4i7 'or te #(r#ose o* com#(tin8 income , loss (n!er te ea! 5Income *rom >o(se

Pro#erty6 in respect of a self-occ4pie resiential $o4se" a normal !e!(ction o*

Rs.30"000,- is alloa/le in res#ect o* interest on /orroe! ca#ital. >oever" a !e!(ction on

acco(nt o* interest (# to a maxim(m limit o* Rs.1"0"000,- is availa/le i* s(c loan as /een

ta@en on or a*ter 1.;.1 *or constr(ctin8 or ac9(irin8 te resi!ential o(se an! te

constr(ction or ac9(isition o* te resi!ential (nit o(t o* s(c loan as /een com#lete! itintree years *rom te en! o* te *inancial year in ic ca#ital as /orroe!. S(c i8er

!e!(ction is not alloa/le in res#ect o* interest on ca#ital /orroe! *or te #(r#oses o*

re#airs or renovation o* an existin8 resi!ential o(se. To claim te i8er !e!(ction in

res#ect o* interest (#to Rs.1"0"000,-"te em#loyee so(l! *(rnis a certi*icate *rom te

#erson to om any interest is #aya/le on te ca#ital /orroe!" s#eci*yin8 te amo(nt o*

interest #aya/le /y s(c em#loyee *or te #(r#ose o* constr(ction or ac9(isition o* te

resi!ential o(se or *or conversion o* a #art or ole o* te ca#ital /orroe!" ic remains

to /e re#ai! as a ne loan.

3.=4ii7Te essential con!itions *or availin8 i8er !e!(ction o* interest o* Rs.1"0"000,- inrespect of a self-occ4pie resiential $o4seare tat te amo(nt o* ca#ital m(st ave /een

/orroe! on or a*ter 01.;.1 an! te ac9(isition or constr(ction o* resi!ential o(se m(st

ave /een com#lete! itin tree years *rom te en! o* te *inancial year in ic ca#ital

as /orroe!. Tere is no sti#(lation re8ar!in8 te !ate o* commencement o* constr(ction.

+onse9(ently" te constr(ction o* te resi!ential o(se co(l! ave commence! /e*ore

01.;.1 /(t" as lon8 as its constr(ction, ac9(isition is com#lete! itin tree years" *rom

te en! o* te *inancial year in ic ca#ital as /orroe! te i8er !e!(ction o(l! /e

availa/le in res#ect o* te ca#ital /orroe! a*ter 1.;.1. It may also /e note! tat tere is

no sti#(lation re8ar!in8 te constr(ction, ac9(isition o* te resi!ential (nit /ein8 entirely

*inance! /y ca#ital /orroe! on or a*ter 01.;.1.Te loan ta@en #rior to 01.;.1 illcarry !e!(ction o* interest (# to Rs.30"000, only. >oever" in any case te total amo(nt o*

!e!(ction o* interest on /orroe! ca#ital ill not excee! Rs.1"0"000,- in a year.


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AC4st%ent for ,cess or S$ortfall of De4ction

3.$ Te #rovisions o* s(/-section 437 o* Section 12 allo te !e!(ctor to ma@e a!?(stments

*or any excess or sort*all in te !e!(ction o* tax alrea!y ma!e !(rin8 te *inancial year" in

s(/se9(ent !e!(ctions *or tat em#loyee itin tat *inancial year itsel*.

TDS on Pay%ent of Acc4%4late alance 'ner Reco"nise Provient !4n an

contrib4tion fro% Approve S4perann4ation !4n

3. Te tr(stees o* a Reco8niKe! Provi!ent '(n!" or any #erson a(toriKe! /y te

re8(lations o* te '(n! to ma@e #ayment o* acc(m(late! /alances !(e to em#loyees" sall"

in cases ere s(/-r(le417 o* r(le o* Part A o* te 'o(rt Sce!(le to te Act a##lies" at te

time en te acc(m(late! /alance !(e to an em#loyee is #ai!" ma@e tere *rom te

!e!(ction s#eci*ie! in r(le 10 o* Part A o* te 'o(rt Sce!(le to te Act.

3.10 :ere any contri/(tion ma!e /y an em#loyer" incl(!in8 interest on s(c contri/(tions"i* any" in an a##rove! S(#erann(ation '(n! is #ai! to te em#loyee" tax on te amo(nt so

#ai! sall /e !e!(cte! /y te tr(stees o* te '(n! to te extent #rovi!e! in r(le o* Part H o*

te 'o(rt Sce!(le to te Act.

Salary Pai in !orei"n +4rrency

3.11 'or te #(r#oses o* !e!(ction o* tax on salary #aya/le in *orei8n c(rrency" te val(e in

r(#ees o* s(c salary sall /e calc(late! at te #rescri/e! rate o* excan8e.

.P,RS*S R,SP*S);, !R D,D'+T)*E TA A*D T6,)R D'T),S

;.1. Fn!er cla(se 4i7 o* Section 20; o* te Act te #ersons res#onsi/le *or #ayin8 *or te

#(r#ose o* Section 12 means te em#loyer imsel* or i* te em#loyer is a +om#any" te

+om#any itsel* incl(!in8 te Princi#al **icer tereo*.

;.2. Te tax !etermine! as #er #ara so(l! /e !e!(cte! *rom te salary (,s 12 o* te Act.

De4ction of Ta at ;o#er Rate

;.3. Section 1= ena/les te tax-#ayer to ma@e an a##lication in *orm )o.13 to te Assessin8**icer4TDS7" an!" i* te Assessin8 **icer4TDS7 is satis*ie! tat te total income o* te tax-

#ayer ?(sti*ies te !e!(ction o* income-tax at any loer rate or no !e!(ction o* income tax"

e may iss(e an a##ro#riate certi*icate to tat e**ect ic so(l! /e ta@en into acco(nt /y

te Drain8 an! Dis/(rsin8 **icer ile !e!(ctin8 tax at so(rce. In te a/sence o* s(c a

certi*icate *(rnise! /y te em#loyee" te em#loyer so(l! !e!(ct income tax on te salary

#aya/le at te normal rates% 5+irc4lar *o. 1F ate 2?.10.18F.7

Deposit of Ta De4cte

;.;. R(le 30 o* Income Tax R(les" 12" as amen!e! /y S.. 1214


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4ii7 on or /e*ore seven !ays *rom te en! o* te mont in ic te !e!(ction is ma!e or

income-tax is !(e (n!er s(/-section 41A7 o* section 12" ere tax is #ai! accom#anie! /y

an income-tax callan.

4/7. Te Tax !e!(cte! at so(rce in accor!ance it te #rovisions o* +a#ter LMII-H o* te

Income tax Act" 11 /y !e!(ctors oter tan an o**ice o* te Government sall /e #ai! tote cre!it o* te +entral Government -

4i7 on or /e*ore 30t !ay o* A#ril ere te income or amo(nt is cre!ite! or #ai! in te

mont o* arcJ an!

4ii7 in any oter case" on or /e*ore seven !ays *rom te en! o* te mont in ic te

!e!(ction is ma!eJ or income-tax is !(e (n!er s(/-section 41A7 o* section 12.

4c7 )otitstan!in8 anytin8 containe! in 4/7 a/ove" in s#ecial cases" te Assessin8 **icer

may" it te #rior a##roval o* te Noint +ommissioner" #ermit 9(arterly #ayment o* te tax!e!(cte! (n!er section 12 or section 1;A or section 1;D or section 1;> *or te 9(arters

o* te *inancial year s#eci*ie! to in col(mn 427 o* te Ta/le /elo /y te !ate re*erre! to in

col(mn 437 o* te sai! Ta/le%-

TAHOoever" small loans (# to Rs. 20"000,- in te a88re8ate are exem#t. Ooans *or me!ical

treatment s#eci*ie! in R(le 3A are also exem#t" #rovi!e! te amo(nt o* loan *or me!ical

reim/(rsement is not reim/(rse! (n!er any me!ical ins(rance sceme. :ere any me!ical

ins(rance reim/(rsement is receive!" te #er9(isite val(e at te #rescri/e! rate sall /e

car8e! *rom te !ate o* reim/(rsement on te amo(nt reim/(rse!" /(t not re#ai! a8ainst

te o(tstan!in8 loan ta@en s#eci*ically *or tis #(r#ose.

@) 'se of assetsIt is common #ractice *or an asset one! /y te em#loyer to /e (se! /y

te em#loyee or any mem/er o* is o(seol!. Tis #er9(isite is to /e car8e! at te rate o*

10 o* te ori8inal cost o* te asset as re!(ce! /y any car8es recovere! *rom te em#loyee

*or s(c (se. >oever" te (se o* +om#(ters an! Oa#to#s o(l! not 8ive rise to any

#er9(isite.

@)) Transfer of assets*ten an em#loyee or mem/er o* is o(seol! /ene*its *rom te

trans*er o* mova/le asset 4not /ein8 sares or sec(rities7 at no cost or at a cost less tan its

mar@et val(e *rom te em#loyer. Te !i**erence /eteen te ori8inal cost o* te mova/le

asset4not /ein8 sares or sec(rities7 an! te s(m" i* any" #ai! /y te em#loyee" sall /e ta@en

as te val(e o* #er9(isite. In case o* a mova/le asset" ic as alrea!y /een #(t to (se" te

ori8inal cost sall /e re!(ce! /y a s(m o* 10 o* s(c ori8inal cost *or every com#lete!

year o* (se o* te asset. in8 to a i8er !e8ree o* o/solescence" in case o* com#(ters an!

electronic 8a!8ets" oever" te val(e o* #er9(isite sall /e or@e! o(t /y re!(cin8 0 o*

te act(al cost /y te re!(cin8 /alance meto! *or eac com#lete! year o* (se.


17/48

travel" !aily alloance to meet to(r ex#enses as #rescri/e!" me!ical *acilities s(/?ect to

con!itions.

G.2 )nco%es not incl4e 4ner t$e 6ea :Salaries


18/48

In!ia )oti*ication )o.S..$$4oever" any s(m receive! (n!er s(c #olicy on

te !eat o* a #erson o(l! still /e exem#t.


19/48

4$7 any pay%ent fro% a Provient !4nto ic te Provi!ent '(n!s Act" 12 41 o*

127" a##lies or *rom any oter #rovi!ent *(n! set (# /y te +entral Government an!

noti*ie! /y it in tis /eal* in te **icial GaKette.

47 Fn!er Section 10513A7 o* te Income-tax Act" 11"any s#ecial alloance s#eci*ically

8rante! to an assessee /y is em#loyer to meet epenit4re inc4rre on pay%ent of rent4/y atever name calle!7 in res#ect o* resi!ential accommo!ation occ(#ie! /y te assessee

is exem#t *rom Income-tax to te extent as may /e #rescri/e!" avin8 re8ar! to te area or

#lace in ic s(c accommo!ation is sit(ate! an! oter relevant consi!erations. Accor!in8

to r(le 2A o* te Income-tax R(les" 12" te 9(ant(m o* exem#tion alloa/le on acco(nt o*

8rant o* s#ecial alloance to meet ex#en!it(re on #ayment o* rent sall /e%

4a7 Te act(al amo(nt o* s(c alloance receive! /y te assessee in res#ect o* te relevant

#erio!J or

4/7 Te act(al ex#en!it(re inc(rre! in #ayment o* rent in excess o* 1,10 o* te salary !(e*or te relevant #erio!J or

4c7 :ere s(c accommo!ation is sit(ate! in Hom/ay" +alc(tta" Deli or a!ras" 0 o*

te salary !(e to te em#loyee *or te relevant #erio!J or

4!7 :ere s(c accommo!ation is sit(ate! in any oter #laces" ;0 o* te salary !(e to te

em#loyee *or te relevant #erio!"

icever is te least.

'or tis #(r#ose" Salary incl(!es !earness alloance" i* te terms o* em#loyment so

#rovi!e" /(t excl(!es all oter alloances an! #er9(isites.

It as to /e note! tat only te ex#en!it(re act(ally inc(rre! on #ayment o* rent in res#ect o*

resi!ential accommo!ation occ(#ie! /y te assessee s(/?ect to te limits lai! !on in R(le

2A" 9(ali*ies *or exem#tion *rom income-tax. T(s" o(se rent alloance 8rante! to an

em#loyee o is resi!in8 in a o(se,*lat one! /y im is not exem#t *rom income-tax. Te

!is/(rsin8 a(torities so(l! satis*y temselves in tis re8ar! /y insistin8 on #ro!(ction o*

evi!ence o* act(al #ayment o* rent /e*ore excl(!in8 te >o(se Rent Alloance or any

#ortion tereo* *rom te total income o* te em#loyee.

To(8 inc(rrin8 act(al ex#en!it(re on #ayment o* rent is a #re-re9(isite *or claimin8

!e!(ction (n!er section 10413A7" it as /een !eci!e! as an a!ministrative meas(re tat

salarie! em#loyees !rain8 o(se rent alloance (#to Rs.3000,- #er mont ill /e

exem#te! *rom #ro!(ction o* rent recei#t. It may" oever" /e note! tat tis concession is

only *or te #(r#ose o* tax-!e!(ction at so(rce" an!" in te re8(lar assessment o* te

em#loyee" te Assessin8 **icer ill /e *ree to ma@e s(c en9(iry as e !eems *it *or te

#(r#ose o* satis*yin8 imsel* tat te em#loyee as inc(rre! act(al ex#en!it(re on #ayment

o* rent.

'(rter i* ann(al rent #ai! /y te em#loyee excee!s Rs 1"$0"000 #er ann(m" it is man!atory

*or te em#loyee to re#ort PA) o* te lan!lor! to te em#loyer. In case te lan!lor! !oes not

ave a PA)" a !eclaration to tis e**ect *rom te lan!lor! alon8 it te name an! a!!ress o*

te lan!lor! so(l! /e *ile! /y te em#loyee.

4107 +la(se 41;7 o* section 10 #rovi!es *or exem#tion o* te *olloin8 alloances %-

4i7 Any s#ecial alloance or /ene*it 8rante! to an em#loyee to meet te epenses inc4rre

in t$e perfor%ance of $is 4tiesas #rescri/e! (n!er R(le 2HH s(/?ect to te extent to

ic s(c ex#enses are act(ally inc(rre! *or tat #(r#ose.


20/48

4ii7 Any alloance 8rante! to an em#loyee eiter to meet is #ersonal ex#enses at te #lace

o* is #ostin8 or at te #lace e or!inarily resi!es or to co%pensate $i% for t$e increase

cost of livin"" ic may /e #rescri/e! an! to te extent as may /e #rescri/e!.

>oever" te alloance re*erre! to in 4ii7 a/ove so(l! not /e in te nat(re o* a #ersonal

alloance 8rante! to te assessee to rem(nerate or com#ensate im *or #er*ormin8 !(ties o*a s#ecial nat(re relatin8 to is o**ice or em#loyment (nless s(c alloance is relate! to is

#lace o* #ostin8 or resi!ence.

Te +HDT as #rescri/e! 8(i!elines *or te #(r#ose o* cla(ses 4i7 an! 4ii7 o* Section 1041;7

vi!e noti*ication )o.S1=4


21/48

4!7 reim/(rsement" /y te em#loyer" o* te amo(nt s#ent /y an em#loyee in o/tainin8

me!ical treatment *or imsel* or any mem/er o* is *amily *rom any !octor" not excee!in8 in

te a88re8ate Rs.1"000,- in an year.

4e7 As re8ar!s me!ical treatment a/roa!" te act(al ex#en!it(re on stay an! treatment

a/roa! o* te em#loyee or any mem/er o* is *amily" or" on stay a/roa! o* one atten!ant oaccom#anies te #atient" in connection it s(c treatment" ill /e excl(!e! *rom

#er9(isites to te extent #ermitte! /y te Reserve Han@ o* In!ia. It may /e note! tat te

ex#en!it(re inc(rre! on travel a/roa! /y te #atient,atten!ant" sall /e excl(!e! *rom

#er9(isites only i* te em#loyee6s 8ross total income" as com#(te! /e*ore incl(!in8 te sai!

ex#en!it(re" !oes not excee! Rs.2 la@s.

'or te #(r#ose o* availin8 exem#tion on ex#en!it(re inc(rre! on me!ical treatment"

os#ital incl(!es a !is#ensary or clinic or n(rsin8 ome" an! *amily in relation to an

in!ivi!(al means te s#o(se an! cil!ren o* te in!ivi!(al. 'amily also incl(!es #arents"

/roters an! sisters o* te in!ivi!(al i* tey are olly or mainly !e#en!ent on tein!ivi!(al.

G.3 De4ctions fro% inco%e fro% Salaries 4s 19 of t$e Act

,ntertain%ent Allo#ance

A !e!(ction is also alloe! (n!er cla(se 4ii7 o* section 1 in res#ect o* any alloance in te

nat(re o* an entertainment alloance s#eci*ically 8rante! /y an em#loyer to te assessee"

o is in recei#t o* a salary *rom te Government" a s(m e9(al to one-*i*t o* is

salary4excl(sive o* any alloance" /ene*it or oter #er9(isite7 or *ive to(san! r(#eesicever is less. )o !e!(ction on acco(nt o* entertainment alloance is availa/le to non-

8overnment em#loyees.

Ta n ,%ploy%ent

Te tax on em#loyment 4Pro*essional Tax7 itin te meanin8 o* cla(se 427 o* Article 2= o*

te +onstit(tion o* In!ia" levia/le /y or (n!er any la" sall also /e alloe! as a !e!(ction

in com#(tin8 te income (n!er te ea! Salaries.

)t %ay be clarifie t$at :Stanar De4ction< fro% "ross salary inco%e #$ic$ #asbein" allo#e 4p to financial year 200-0G is not allo#able fro% financial year 200G-09

on#ars.

G. De4ctions 4ner +$apter @)-A of t$e Act

In com#(tin8 te taxa/le income o* te em#loyee" te *olloin8 !e!(ctions (n!er +a#ter

MI-A o* te Act are to /e alloe! *rom is 8ross total income%

A. As #er section ?0+" an em#loyee ill /e entitle! to !e!(ctions *or te ole o* amo(nts

#ai! or !e#osite! in te c(rrent *inancial year in te *olloin8 scemes" s4bCect to a li%it ofRs.100000-%

417 Payment o* ins4rance pre%i4%to e**ect or to @ee# in *orce an ins(rance on te li*e o*

te in!ivi!(al" te s#o(se or any cil! o* te in!ivi!(al.

427 Any #ayment ma!e to e**ect or to @ee# in *orce a contract *or a eferre ann4ity" not

/ein8 an ann(ity #lan as is re*erre! to in item 4=7 erein /elo on te li*e o* te in!ivi!(al"

te s#o(se or any cil! o* te in!ivi!(al" #rovi!e! tat s(c contract !oes not contain a

#rovision *or te exercise /y te ins(re! o* an o#tion to receive a cas #ayment in lie( o* te

#ayment o* te ann(ityJ

437 Any s(m !e!(cte! *rom te salary #aya/le /y" or" on /eal* o* te Government to any

in!ivi!(al" /ein8 a s(m !e!(cte! in accor!ance it te con!itions o* is service *or te


22/48

#(r#ose o* sec(rin8 to im a eferre ann4ityor ma@in8 #rovision *or is s#o(se or

cil!ren" in so *ar as te s(m !e!(cte! !oes not excee! 1,t o* te salaryJ

4;7 Any contri/(tion ma!e %

4a7 /y an in!ivi!(al to any Provient !4nto ic te Provi!ent '(n! Act" 12 a##liesJ

4/7 to any #rovi!ent *(n! set (# /y te +entral Government" an! noti*ie! /y it in tis /eal*

in te **icial GaKette" ere s(c contri/(tion is to an acco(nt stan!in8 in te name o* an

in!ivi!(al" or s#o(se or cil!ren J

;he Central "overnment has since noti!ied Public Provident Fund vide Noti!ication

S.


23/48

;he Central "overnment has since noti!ied the 09uity >in2ed Savin) Scheme, ++% !or

this purpose vide Noti!ication S.o(sin8 Hoar! etc.

Te !e!(ction ill also /e alloa/le in res#ect o* re-#ayment o* loans /orroe! /y an

assessee *rom te Government" or any /an@ or Oi*e Ins(rance +or#oration" or )ational

>o(sin8 Han@" or certain oter cate8ories o* instit(tions en8a8e! in te /(siness o*

#rovi!in8 lon8 term *inance *or constr(ction or #(rcase o* o(ses in In!ia. Any re#ayment

o* loan /orroe! *rom te em#loyer ill also /e covere!" i* te em#loyer a##ens to /e a

#(/lic com#any" or a #(/lic sector com#any" or a (niversity esta/lise! /y la" or a colle8e

a**iliate! to s(c (niversity" or a local a(tority" or a coo#erative society" or an a(tority" or a

/oar!" or a cor#oration" or any oter /o!y esta/lise! (n!er a +entral or State Act.

Te stam# !(ty" re8istration *ee an! oter ex#enses inc(rre! *or te #(r#ose o* trans*er

sall also /e covere!. Payment toar!s te cost o* o(se #ro#erty" oever" ill not incl(!e"

a!mission *ee or cost o* sare or initial !e#osit or te cost o* any a!!ition or alteration to" or"

renovation or re#air o* te o(se #ro#erty ic is carrie! o(t a*ter te iss(e o* te

com#letion certi*icate /y com#etent a(tority" or a*ter te occ(#ation o* te o(se /y te

assessee or a*ter it as /een let o(t. Payments toar!s any ex#en!it(re in res#ect o* ic

te !e!(ction is alloa/le (n!er te #rovisions o* section 2; o* te Income-tax Act ill also

not /e incl(!e! in #ayments toar!s te cost o* #(rcase or constr(ction o* a o(se

#ro#erty.

:ere te o(se #ro#erty in res#ect o* ic !e!(ction as /een alloe! (n!er tese

#rovisions is trans*erre! /y te tax-#ayer at any time /e*ore te ex#iry o* *ive years *rom te


24/48

en! o* te *inancial year in ic #ossession o* s(c #ro#erty is o/taine! /y im or e

receives /ac@" /y ay o* re*(n! or oterise" any s(m s#eci*ie! in section $0+4274xviii7" no

!e!(ction (n!er tese #rovisions sall /e alloe! in res#ect o* s(c s(ms #ai! in s(c

#revio(s year in ic te trans*er is ma!e an! te a88re8ate amo(nt o* !e!(ctions o*

income so alloe! in te earlier years sall /e a!!e! to te total income o* te assessee o*

s(c #revio(s year an! sall /e lia/le to tax accor!in8ly.

4137 T4ition fees" eter at te time o* a!mission or terea*ter" #ai! to any (niversity"

colle8e" scool or oter e!(cational instit(tion sit(ate! in In!ia" *or te #(r#ose o* *(ll-time

e!(cation o* any to cil!ren o* te em#loyee.

!4ll-ti%e e4cation incl4es any e4cational co4rse offere by any 4niversity

colle"e sc$ool or ot$er e4cational instit4tion to a st4ent #$o is enrolle f4ll-ti%e for

t$e sai co4rse. )t is also clarifie t$at f4ll-ti%e e4cation incl4es play-sc$ool

activities pre-n4rsery an n4rsery classes.

1t is clari!ied that the amount allo*able as tuition !ees shall include any payment o! !ee

to any university, colle)e, school or other educational institution in 1ndia e/cept the amount

representin) payment in the nature o! development !ees or donation or capitation !ees or

payment o! similar nature.

41;7 S(/scri#tion to e=4ity s$ares or ebent4res for%in" part of any eli"ible iss4e of

capitalma!e /y a #(/lic com#any" ic is a##rove! /y te Hoar! or /y any #(/lic *inance

instit(tion.

417 S(/scri#tion to any 4nits of any %4t4al f4nre*erre! to in cla(se 423D7 o* Section 10an! a##rove! /y te Hoar!" i* te amo(nt o* s(/scri#tion to s(c (nits is s(/scri/e! only in

eli8i/le iss(e o* ca#ital o* any com#any.

417 Investment as a ter% eposit for a fie perioo* not less tan *ive years it a

sce!(le! /an@" ic is in accor!ance it a sceme *rame! an! noti*ie! /y te +entral

Government" in te **icial GaKette *or tese #(r#oses.

;he Central "overnment has since noti!ied the an2 erm ?eposit Scheme, ++& !or

this purpose vide Noti!ication S.


25/48

sall" in accor!ance it" an! s(/?ect to te #rovisions o* tis section" /e alloe! a

!e!(ction in te com#(tation o* is total income" o* te ole o* te amo(nt #ai! or

!e#osite! 4excl(!in8 interest or /on(s accr(e! or cre!ite! to te assessee6s acco(nt" i* any7

as oes not ecee t$e a%o4nt of one la($ r4pees in t$e previo4s year.

:ere any amo(nt #ai! or !e#osite! /y te assessee as /een ta@en into acco(nt *or te#(r#oses o* tis section" a re/ate, !e!(ction it re*erence to s(c amo(nt sall not /e

alloe! (n!er section $$ (# to assessment year 200-0 an! (n!er section $0+ *rom

assessment year 200-0= onar!s.

+. As #er te #rovisions o* section ?0++D" ere an assessee" /ein8 an inivi4al

e%ploye by t$e +entral Eovern%enton or a*ter te 1st !ay o* Nan(ary" 200;" as in te

#revio(s year pai or eposite any a%o4nt in $is acco4nt 4ner a pension sc$e%eas

noti*ie! vie *otification *o. !.*. GF2003- ,+&PR ate 22.12.2003" e sall /e

alloe! a !e!(ction in te com#(tation o* is total income" o* te ole o* te amo(nt so

#ai! or !e#osite! as !oes not excee! ten #er cent o* is salary in te #revio(s year.

Te /ene*it o* ne #ension sceme as /een exten!e! to any oter em#loyees 4also sel*

em#loye! #erson7 .r.e.* 1,0;,0 an! !e!(ction is alloe! to em#loyees (#to 10 o* salary

in te #revio(s year an! in oter cases (#to 10 o* is 8ross total income in te #revio(s

year. '(rter it as /een s#eci*ie! tat .r.e.* 1,0;,0 any amo(nt receive! /y te assessee

*rom te ne #ension sceme sall /e !eeme! not to ave receive! in te #revio(s year i*

s(c amo(nt is (se! *or #(rcasin8 an ann(ity #lan in te #revio(s year.

t ma $e noted that the contri$ution made $ the entral *overnment or an other

emploer# to!ards a pension scheme notified for section +0 ,# shall $e allo!ed asdeduction in the computation of total income of the emploee to the extent that it does not

exceed ten percent of emploee's salar% W%e%f% 01%04%2011 (Y 2011-12)# the amount of

deduction so allo!ed shall $e outside the overall limit of .s one lah under section

+0E of the ncome ax Act# 11% t is therefore# clarified that contri$ution made $ an

emploee alone !ill $e eli3i$le to deduction limit of upto .s%one lah% he contri$ution

made $ the entral *overnment or an other emploee to a pension scheme u/s

+0,(2) shall $e excluded from the limit of one lah rupees provided under ection

+0E%

:ere any amo(nt stan!in8 to te cre!it o* te assessee in is acco(nt (n!er s(c #ensionsceme" in res#ect o* ic a !e!(ction as /een alloe! as #er te #rovisions !isc(sse!

a/ove" to8eter it te amo(nt accr(e! tereon" i* any" is receive! /y te assessee or is

nominee" in ole or in #art" in any *inancial year"

4a7 on acco(nt o* clos(re or is o#tin8 o(t o* s(c #ension scemeJ or

4/7 as #ension receive! *rom te ann(ity #lan #(rcase! or ta@en on s(c clos(re or o#tin8

o(t"

te ole o* te amo(nt re*erre! to in cla(se 4a7 or cla(se 4/7 a/ove sall /e !eeme! to /ete income o* te assessee or is nominee" as te case may /e" in te *inancial year in ic

s(c amo(nt is receive!" an! sall accor!in8ly /e car8e! to tax as income o* tat *inancial

year.

'or te #(r#oses o* !e!(ction (n!er section $0++D" salary incl(!es !earness alloance" i*

te terms o* em#loyment so #rovi!e" /(t excl(!es all oter alloances an! #er9(isites.

T$e a""re"ate a%o4nt of e4ction 4ner sections ?0+ ?0+++ an s4b section 517 of

Section ?0++D s$all not ecee Rs.100000- 5Section ?0++,7

D. A ne section $0++' as /een inserte! /y te 'inance Act" 2010" e* 01.0;.2011. Te

section $0++' #rovi!es *or !e!(ction availa/le to an in!ivi!(al or a >F'" te ole o* te

amo(nt" to te extent s(c amo(nt !oes not excee! Rs 20"000" #ai! or !e#osite! !(rin8


26/48

*inancial year 2010-11" as s(/scri#tion to lon8-term in*rastr(ct(re /on!s as noti*ie! /y te

+entral Govt *or te #(r#ose o* tis section.4Hoar! )oti*ication no ;$,2010 !ate!

0.0.20107

De4ction 4ner t$is section can not ecee Rs 20000 an are available only for

c4rrent financial year 2011-12. T$e e4ction 4ner t$is section #ill be in aition tooverall li%it of e4ction of 4pto Rs one la($ 4ner section ?0+ ?0+++ an s4b

section 517 of Section ?0 ++D.


27/48

s(/?ect to te con!itions s#eci*ie! in tis re8ar! an! a##rove! /y te Hoar! in tis /eal* *or

te maintenance o* a !e#en!ant" /ein8 a #erson it !isa/ility"

te assessee sall /e alloe! a !e!(ction o* a s(m o*fiftto(san! r(#ees *rom is

8ross total income o* tat year.

>oever" ere s(c !e#en!ant is a #erson it severe !isa/ility" an amo(nt o* one

(n!re! to(san! r(#ees sall /e alloe! as !e!(ction s(/?ect to te s#eci*ie! con!itions.

Te !e!(ction (n!er cla(se 4/7 o* s(/-section 417 sall /e alloe! only i* te *olloin8

con!itions are *(l*ille!%-

A.4i7 te sceme re*erre! to in cla(se 4/7 a/ove #rovi!es *or #ayment o* ann(ity or

l(m# s(m amo(nt *or te /ene*it o* a !e#en!ant" /ein8 a #erson it !isa/ility" in te event

o* te !eat o* te in!ivi!(al in ose name s(/scri#tion to te sceme as /een ma!eJ

4ii7 te assessee nominates eiter te !e#en!ant" /ein8 a #erson it !isa/ility" or any

oter #erson or a tr(st to receive te #ayment on is /eal*" *or te /ene*it o* te !e#en!ant"

/ein8 a #erson it !isa/ility.

>oever" i* te !e#en!ant" /ein8 a #erson it !isa/ility" #re!eceases te assessee" an

amo(nt e9(al to te amo(nt #ai! or !e#osite! (n!er s(/-#ara4/7 a/ove sall /e !eeme! to /e

te income o* te assessee o* te #revio(s year in ic s(c amo(nt is receive! /y te

assessee an! sall accor!in8ly /e car8ea/le to tax as te income o* tat #revio(s year.

H. Te assessee" claimin8 a !e!(ction (n!er tis section" sall *(rnis a co#y o* tecerti*icate iss(e! /y te me!ical a(tority in te #rescri/e! *orm an! manner" alon8 it te

ret(rn o* income (n!er section 13" in res#ect o* te assessment year *or ic te

!e!(ction is claime!%

In cases ere te con!ition o* !isa/ility re9(ires reassessment o* its extent a*ter a

#erio! sti#(late! in te a*oresai! certi*icate" no !e!(ction (n!er tis section sall /e alloe!

*or any s(/se9(ent #erio! (nless a ne certi*icate is o/taine! *rom te me!ical a(tority in

te #rescri/e! *orm an! manner an! a co#y tereo* is *(rnise! alon8 it te ret(rn o*

income.

'or te #(r#oses o* section $0DD"

4a7 A!ministrator means te A!ministrator as re*erre! to in cla(se 4a7 o* section 2 o* te

Fnit Tr(st o* In!ia 4Trans*er o* Fn!erta@in8 an! Re#eal7 Act" 2002 4$ o* 20027 J

4/7 !e#en!ant means

4i7 in te case o* an in!ivi!(al" te s#o(se" cil!ren" #arents" /roters an! sisters o* te

in!ivi!(al or any o* temJ

4ii7 in te case o* a >in!( (n!ivi!e! *amily" a mem/er o* te >in!( (n!ivi!e!

*amily"!e#en!ant olly or mainly on s(c in!ivi!(al or >in!( (n!ivi!e! *amily *or is

s(##ort an! maintenance" an! o as not claime! any !e!(ction (n!er section $0F in

com#(tin8 is total income *or te assessment year relatin8 to te #revio(s yearJ

4c7 !isa/ility sall ave te meanin8 assi8ne! to it in cla(se 4i7 o* section 2 o* te Persons

it Disa/ilities 4


28/48

4e7 me!ical a(tority means te me!ical a(tority as re*erre! to in cla(se 4#7 o* section 2

o* te Persons it Disa/ilities 4


29/48

4!7 initial assessment year means te assessment year relevant to te #revio(s year" in

ic te assessee starts #ayin8 te interest on te loan.

4e7 relative. Section ?0E#rovi!es *or !e!(ctions on acco(nt o* !onation ma!e to vario(s *(n!s "

carita/le or8aniKations etc. Eenerally no e4ction s$o4l be allo#e by t$e D.D..

fro% t$e salary inco%e in respect of any onations %ae for c$aritable p4rposes. Te

tax relie* on s(c !onations as a!missi/le (n!er section $0G o* te Act" ill ave to /e

claime! /y te tax #ayer in te ret(rn o* income. >oever in cases !here emploees mae

donations to the 5rime 6inister's 7ational .elief und# the hief 6inister's .elief und

or the 8ieutenant *overnor's .elief und throu3h their respective emploers# it is not

possi$le for such funds to issue separate certificate to ever such emploee in respect of

donations made to such funds as contri$utions made to these funds are in the form of a

consolidated che"ue% An emploee !ho maes donations to!ards these funds is eli3i$le toclaim deduction under section +0*% t is# here$# clarified that the claim in respect of such

donations as indicated a$ove !ill $e admissi$le under section +0* on the $asis of the

certificate issued $ the ,ra!in3 and ,is$ursin3 9fficer (,,9)/Emploer in this $ehalf :

ircular 7o% 2/200;# dated 12-1-200;%

I. Fn!er Section ?0EEo* te Act an assessee is entitle! to a !e!(ction in res#ect o* $o4se

rent pai by $i% for $is o#n resience. S(c !e!(ction is #ermissi/le s(/?ect to te

*olloin8 con!itions %-

4a7 te assessee as not /een in recei#t o* any >o(se Rent Alloance s#eci*ically 8rante! toim ic 9(ali*ies *or exem#tion (n!er section 10413A7 o* te ActJ

4/7 te assessee *iles te !eclaration in 'orm )o.10HA. 5Anne4re-@)7

4c7 >e ill /e entitle! to a !e!(ction in res#ect o* o(se rent #ai! /y im in excess o* 10

#er cent o* is total income" s(/?ect to a ceilin8 o* 2 #er cent tereo* or Rs. 2"000,- #er

mont" icever is less. Te total income *or or@in8 o(t tese #ercenta8es ill /e

com#(te! /e*ore ma@in8 any !e!(ction (n!er section $0GG.

4!7 Te assessee !oes not on%

4i7 any resi!ential accommo!ation imsel* or /y is s#o(se or minor cil! or ere s(c

assessee is a mem/er o* a >in!( Fn!ivi!e! 'amily" /y s(c *amily" at te #lace ere e

or!inarily resi!es or #er*orms !(ties o* is o**ice or carries on is /(siness or #ro*essionJ or

4ii7 at any oter #lace" any resi!ential accommo!ation /ein8 accommo!ation in te

occ(#ation o* te assessee" te val(e o* ic is to /e !etermine! (n!er cla(se 4a7 o* s(/

section 427 or" as te case may /e" cla(se 4a7 o* s(/-section 4;7 o* section 23%

Te Drain8 an! Dis/(rsin8 A(torities so(l! satis*y temselves tat all tecon!itions mentione! a/ove are satis*ie! /e*ore s(c !e!(ction is alloe! /y tem to te

assessee. Tey so(l! also satis*y temselves in tis re8ar! /y insistin8 on #ro!(ction o*

evi!ence o* act(al #ayment o* rent.

N. Fn!er section ?0'" in com#(tin8 te total income o* an in!ivi!(al" /ein8 a resi!ent" o"

at any time !(rin8 te #revio(s year" is certi*ie! /y te me!ical a(tority to /e a person #it$

isability" tere sall /e alloe! a !e!(ction o* a s(m o* *i*ty to(san! r(#ees. >oever"

ere s(c in!ivi!(al is a #erson it severe !isa/ility" a i8er !e!(ction o* one lah

rupeessall /e alloa/le.


30/48

In cases ere te con!ition o* !isa/ility re9(ires reassessment o* its extent a*ter a #erio!

sti#(late! in te a*oresai! certi*icate" no !e!(ction (n!er tis section sall /e alloe! *or

any s(/se9(ent #erio! (nless a ne certi*icate is o/taine! *rom te me!ical a(tority in te

#rescri/e! *orm an! manner an! a co#y tereo* is *(rnise! alon8 it te ret(rn o* income.

'or te #(r#oses o* tis section" te ex#ressions !isa/ility" me!ical a(tority" #ersonit !isa/ility an! #erson it severe !isa/ility sall ave te same meanin8 as 8iven in

section $0DD 4s(/-#ara < o* #ara .; o* tis +irc(lar7.

DDs to satisfy t$e%selves of t$e "en4ineness of clai%

Te Drain8 an! Dis/(rsin8 **icers so(l! satis*y temselves a/o(t te act(al !e#osits,

s(/scri#tions , #ayments ma!e /y te em#loyees" /y callin8 *or s(c #artic(lars, in*ormation

as tey !eem necessary /e*ore alloin8 te a*oresai! !e!(ctions. In case te DD is not

satis*ie! a/o(t te 8en(ineness o* te em#loyee6s claim re8ar!in8 any

!e#osit,s(/scri#tion,#ayment ma!e /y te em#loyee" e so(l! not allo te same" an! teem#loyee o(l! /e *ree to claim te !e!(ction, re/ate on s(c amo(nt /y *ilin8 is ret(rn o*

income an! *(rnisin8 te necessary #roo* etc." tereit" to te satis*action o* te Assessin8

**icer.

9. +A;+';AT)* ! )*+/,-TA T , D,D'+T,D

%1 alar income for the purpose of ection 12 shall $e computed as follo! from the fi3ure arrived at (a) a$ove and

compute the amount%

(c) Allo! deductions mentioned in para ;%4 from the fi3ure arrived at ($) a$ove ensurin3

that the relevant conditions are satisfied% he a33re3ate of the deductions su$?ect to the

threshold limits mentioned in para ;%4 shall not exceed the amount at ($) a$ove and if it

exceeds# it should $e restricted to that amount%

his !ill $e the amount of income from salaries on !hich income tax !ould $e re"uiredto $e deducted% his income should $e rounded off to the nearest multiple of ten rupees%

%2 ncome-tax on such income shall $e calculated at the rates 3iven in para 2 of this

ircular eepin3 in vie! the a3e and 3ender of the emploee# su$?ect to the provisions of

sec% 20AA# as discussed in para 4%%

%> he amount of tax paa$le so arrived at shall $e increased $ educational cess as

applica$le (2@ for primar and 1@ for secondar education) to arrive at the total tax

paa$le%

%4 he amount of tax as arrived at para %> should $e deducted ever month in e"ual

installments% An excess or deficit arisin3 out of an previous deduction can $e ad?usted

$ increasin3 or decreasin3 the amount of su$se"uent deductions durin3 the same

financial ear%

DDs, PAs o *ail to com#ly it te #rovisions o* Sec 12 o* te Income-tax Act"

11" o(l! /e lia/le to #ay interest (,s 201 41A7 o* te Income-tax Act alon8 it #enal

conse9(ences.

F. /)S+,;;A*,'S

=.1 Tese instr(ctions are not exa(stive an! are iss(e! only it a vie to el# te

em#loyers to (n!erstan! te vario(s #rovisions relatin8 to !e!(ction o* tax *rom salaries.


31/48

:erever tere is any !o(/t" re*erence may /e ma!e to te #rovisions o* te Income-tax Act"

11" te Income-tax R(les" 12" te 'inance Act 2011 an! te relevant circ(lars ,

noti*ications.

=.2 In case any assistance is re9(ire!" te Assessin8 **icer,te local P(/lic Relation **icer

o* te Income-tax De#artment may /e contacte!.

=.3 Tese instr(ctions may /e /ro(8t to te notice o* all Dis/(rsin8 **icers an!

Fn!erta@in8s incl(!in8 tose (n!er te control o* te +entral, State Governments.

=.; +o#ies o* tis +irc(lar are availa/le it te Director o* Income-tax4Researc" Statistics

& P(/lications an! P(/lic Relations7" t 'loor" ay(r Havan" +onna(8t Place" )e

Deli-110 001 an! at te *olloin8 e/sites%

.*inmin.nic.in

.incometaxin!ia.8ov.in

A**,'R,-)

,a%ple 1

'or Assessment Year 2012-2013

5A7 +alc4lation of )nco%e ta in t$e case of a %ale e%ployee belo# t$e a"e of sity

years an $avin" "ross salary inco%e of

4i7 Rs.1"0"000,-"

4ii7 Rs.2"00"000,- "

4iii7 Rs."00"000,- "

4iv7 Rs.10"00"000,- an!

4v7 Rs.20"00"000,-.

4H7 :at ill /e te amo(nt o* TDS in case o* a/ove em#loyees" i* PA) is not s(/mitte! /y

tem to teir DDs,**ices%

Partic4lars R4pees

5i7

R4pees

5ii7

R4pees

5iii7

R4pees

5iv7

R4pees 5i7

Gross Salary

Income 4incl(!in8

alloances7

1"0"000 2"00"000 "00"000 10"00"000 20"00"000

+ontri/(tion o*

G.P.'.

10"000 ;"000 0"000 1"00"000 1"00"000

+o%p4tation of Total )nco%e an ta payable t$ereon


32/48

Partic4lars R4pees 5i7 R4pees

5ii7

R4pees

5iii7

R4pees 5iv7 R4pees 5v7

Gross Salary 1"0"000 2"00"000 "00"000 10"00"000 20"00"000

Oess%De!(ction

F,s $0+

10"000 ;"000 0"000 1"00"000 1"00"000

Taxa/le

Income

1";0"000 1""000 ;"0"000 "00"000 1"00"000

5A7 Ta

t$ereon

*il *il 2F000 122000 22000

A!!%4i7

+ess 2.

*il )il ;0 2;;0 $;;0

4ii7

Secon!ary

an! >i8er

*il )il 2=0 1220 ;220

+ess 1

Total tapayable *il *il 2F?10 12G990 3990

57 TDS

4ner sec.

209AA in

case #$ere

PA* is not

f4rnis$e

by t$ee%ployee

*il *il 80000 1?0000 39F20

,a%ple 2


+alc4lation of )nco%e Ta in t$e case of a %ale e%ployee belo# t$e a"e of sity years

$avin" a $anicappe epenent 5>it$ vali PA* f4rnis$e to e%ployer7.

S.*o. Partic4lars R4pees

1 Gross Salary 3"20"000

2 Amo(nt s#ent on treatment o* a !e#en!ant" /ein8

#erson it !isa/ility 4/(t not severe !isa/ility7

=000

3 Amo(nt #ai! to OI+ it re8ar! to ann(ity *or te

maintenance o* a !e#en!ant" /ein8 #erson it!isa/ility 4/(t not severe !isa/ility7

0"000


33/48

; GP' +ontri/(tion 2"000

OIP Pai! 10"000

+o%p4tation of Ta



;essDe!(ction F,s $0DD 4Restricte! to Rs.0"000,-

only7

4-7

0"000

2 Taable inco%e 2F0000

;essDe!(ction F,s $0+ 4i7 GP' Rs.2"000,-

4ii7 OIP Rs.10"000,- E Rs.3"000,- 4-73"000

3 Total )nco%e 23G000

; )nco%e Ta t$ereonpayable GG00

A

4i7.

4ii7. Secon!ary an! >i8er

110

GG

Total )nco%e Ta payable G99G

Ro4ne off to G9F0

,a%ple 3


+alc4lation of )nco%e Ta in t$e case of a %ale e%ployee belo# a"e of sity years

#$ere %eical treat%ent epenit4re #as borne by t$e e%ployer 5>it$ vali PA*

f4rnis$e to e%ployer7.



2 e!ical Reim/(rsement /y em#loyer on te treatmento* sel* an! !e#en!ent *amily mem/er

30"000

3 +ontri/(tion o* GP' 20"000

; OI+ Premi(m 20"000

Re#ayment o* >o(se H(il!in8 A!vance 2"000

T(ition *ees *or to cil!ren 0"000

= Investment in Fnit-Oin@e! Ins(rance Plan 20"000

+o%p4tation of Ta


34/48



APer9(isite in res#ect o* reim/(rsement o* e!ical

)ll4strative calc4lation of 6o4se Rent Allo#ance 's 10 513A7 in respect of resiential

acco%%oation sit4ate in Del$i in case of a fe%ale e%ployee belo# t$e a"e of sity

years 5>it$ vali PA* f4rnis$e to e%ployer7.


1 Salary 2"0"000

2 Dearness Alloance 1"00"000

3 >o(se Rent Alloance 1";0"000

; >o(se rent #ai! 1";;"000

General Provi!ent '(n! 3"000

Oi*e Ins(rance Premi(m ;"000


35/48

= S(/scri#tion to Fnit-Oin@e! Ins(rance

Plan

0"000

+o%p4tation of total inco%e an ta payable t$ereon


1 Salary U Dearness Alloance U >o(se Rent Alloance

2"0"000U1"00"000U1";0"000 E ;"0"000

;"0"000

2 Total Salary )nco%e 80000

3 ;ess >o(se Rent alloance exem#t F,s 10413A7%

;east of

4a7 Act(al amo(nt o* >RA

receive!E

1";0"000

4/7

belo# a"e of sity years of a private co%pany in /4%bai #$o #as provie


36/48

acco%%oation in a flat at concessional rate for ten %ont$s an in a $otel for t#o

%ont$s 5>it$ vali PA* f4rnis$e to e%ployer7.


1 Salary ="00"000

2 Hon(s 1";0"000

3 'ree 8as" electricity" ater etc. 4Act(al /ills #ai! /y

com#any7

;0"000

;4a7 'lat at concessional rate 4*or ten monts7. E Rs.3"0"00 3"0"000

;4/7 >otel rent #ai! /y em#loyer 4*or to monts7 1"00"000

;4c7 Rent recovere! *rom em#loyee. 0"000

;4!7 +ost o* *(rnit(re. 2"00"000

S(/scri#tion to Fnit Oin@e! Ins(rance Plan 0"000

Oi*e Ins(rance Premi(m 10"000

= +ontri/(tion to reco8niKe! P.'. ;2"000

$ Investment in lon8 term in*rastr(ct(re /on!s 4$0++'7 20"000

+/P'TAT)* ! TTA; )*+/, A*D TA PA)D T6,R,*


1 Salary ="00"000

2 Hon(s 1";0"000

3 Total Salary *or Mal(ation o* 41U27%

Per9(isites i.e. Rs.=0"000 #er mont.

$";0"000

@al4ation of per=4isites

;4a7 Per9. *or *lat%Ooer o* 41 o*

salary *or ten monts

ERs.1"0"000,-7 an! 4act(al rent

#ai!E3"0"0007 1"0"000

;4/7 Per9(isites *or otel % Ooer o* 42;

o* salary o* 2 mtsE33"007 an!4act(al #aymentE1"00"0007

33"00

;4c7 Per9(isites *or

*(rnit(re4Rs.2"00"0007 10 o*

cost

20"000

;4c74i7 Total of O5a75b75c7Q 41"0"000U

33"00U 20"0007

;ess rent recovere N

Rs.1$"00

4-7Rs. 0"000

Rs. $"00

;4!7 A!! #er9. *or *ree 8as" electricity"ater etc. Rs.;0"000 4U7 $"00

;4c74i7C E Rs 13?900

1"3$"00


37/48

Total #er9(isites

Gross Total Income 4Rs.$";0"000 U

1"3$"007

"=$"00

Eross Total )nco%e 8F?900= ;ess De4ction 's ?0+ &

?0++!

4i7. Provi!ent '(n! 4$0+7

4ii7. OI+ 4$0+7

4iii7. S(/scri#tion to Fnit Oin@e!

Ins(rance Plan 4$0+7

4iv7. Investment in In*rastr(ct(re

Hon! 4$0++'7

Total

Restricte to Rs 100000 4s ?0+an Rs 20000 4s ?0++!

%;2"000

%10"000

%0"000,-

%20"000

N 122000

5-7120000

$ Total )nco%e ?G?900

Tax Paya/le 108G?0

10 A

4i7. S(rcar8e )il

4ii7.

4iii7. Secon!ary an! >i8er

*il*il

2182

1089

11 Total )nco%e Ta payable 112?9?

12 Ro4ne off to 112?F0

,a%ple 9


)ll4stratin" @al4ation of per=4isite an calc4lation of ta in t$e case of a fe%ale

e%ployee belo# t$e a"e of 90 years of a Private +o%pany poste at Del$i an repayin"

6o4se 4ilin" ;oan 5>it$ vali PA* f4rnis$e to e%ployer7.


1 Salary 3"00"000

2 Dearness Alloance 1"00"000

3 >o(se Rent Alloance 1"$0"000

; S#ecial D(ties Alloance 12"000

Provi!ent '(n! 0"000

OIP 10"000

= De#osit in )S+ MIII iss(e 30"000

$ Rent Pai! /y te em#loyee *or o(se ire! /y er 1"20"000

Re#ayment o* >o(se H(il!in8 Ooan 4Princi#al7 0"000


38/48

10 T(ition 'ees *or tree cil!ren 4Rs.10"000 #er cil!7 30"000

+o%p4tation of total inco%e an ta payable t$ereon


1 Gross Salary 4HasicUDAU>RAUSDA7 "2"000

;ess% >o(se rent alloance exem#t F,s

10 413A7

Oeast o*%

4a7. Act(al amo(nt o* >RA receive!. %Rs.1"$0"000

4/7.


39/48

State%ent s$o#in" partic4lars of per=4isites ot$er frin"e benefits or a%enities an

profits in lie4 of salary #it$ val4e t$ereof

417 )ame an! a!!ress o* em#loyer %

427 TA)

437 TDS Assessment Ran8e o* te em#loyer %

4;7 )ame" !esi8nation an! PA) o* em#loyee %

47 Is te em#loyee a !irector or a #erson it %

s(/stantial interest in te com#any

4ere te em#loyer is a com#any7

47 Income (n!er te ea! Salaries o* te em#loyee %

4oter tan *rom #er9(isites7

4=7 'inancial Year %

4$7 Mal(ation o* Per9(isites

S.)o. )at(re o* #er9(isite 4see r(le 37 Mal(e o*

#er9(isite

as #er

r(les

4Rs.7

Amo(nt"

i* any

recovere!

*rom te

em#loyee

4Rs.7

Amo(nt o*

#er9(isite

car8ea/le

to tax +ol.

437 +ol.

4;7 4Rs.7

417 427 437 4;7 47

1 Accommo!ation2 +ars,ter a(tomotive

3 See#er" 8ar!ener" atcman or

#ersonal atten!ant

; Gas" electricity" ater

Interest *ree or concessional

loans

>oli!ay ex#enses

= 'ree or concessional travel

$ 'ree meals

'ree

10 Gi*ts" vo(cers etc.

11 +re!it car! ex#enses

12 +l(/ ex#enses

13 Fse o* mova/le assets /yem#loyees

1; Trans*er o* assets to em#loyees


40/48

1 Mal(e o* any oter

/ene*it,amenity,service,#rivile8e

1 Stoc@ o#tions 4non-9(ali*ie!

o#tions7

1= ter /ene*its or amenities

1$ Total val(e o* #er9(isites

1 Total val(e o* Pro*its in lie( o*

salary as #er 1=437

. Details o* tax" -

4a7 Tax !e!(cte! *rom salary o* te em#loyee (,s 12417 VVV

4/7 Tax #ai! /y em#loyer on /eal* o* te em#loyee (,s 1241A7 VVV

4c7 Total tax #ai! VVV

4!7 Date o* #ayment into Government treas(ry VVV

D,+;ARAT)* Y ,/P;Y,R

I VVVVVV. s,o VVVVVVV. or@in8 as VVVVVVVVVVV4!esi8nation7

!o ere/y !eclare on /eal* o* VVVVV..V.. 4name o* te em#loyer7 tat te in*ormation

8iven a/ove is /ase! on te /oo@s o* acco(nt" !oc(ments an! oter relevant recor!s or

in*ormation availa/le it (s an! te !etails o* val(e o* eac s(c #er9(isite are in

accor!ance it section 1= an! r(les *rame! tere(n!er an! tat s(c in*ormation is tr(e an!

correct.

Si8nat(re o* te #erson

res#onsi/le

*or !e!(ction o* tax

PlaceV

DateV '(ll )ame VVVVVVVV

Desi8nation VVVVVVV.

J

A***,'R,-)))

'.)o. S:,TDS,TI),1,2010-DIT4S7-II

Directorate o* Income-tax 4System7 )e Deli

R,@)S,D PR+,D'R,

!4rnis$in" of H4arterly e-TDST+S State%ents by e4ctorscollectors

1.1 H'ART,R;Y ,;,+TR*)+ STAT,/,*TS !'R*)S6,D T6R'E6 T)*-!+After preparin" an valiatin" t$e =4arterly e-TDST+S t$e e4ctorcollector s$all


41/48

f4rnis$ t$e sa%e at any T)*-!+ %ana"e by *SD;. De4ctorcollector s$all ens4re

t$at

1.1.1


42/48

2.1.1.1 In case 9(arterly e-TDS,T+S statement is vali! TI)-'+ ill iss(e a Provisional

Recei#t to te !e!(ctor,collector. Te Provisional Recei#t iss(e! /y TI)-'+ to

!e!(ctor,collector is !eeme! to /e te #roo* o* 9(arterly e-TDS,T+S statements *(rnise!

/y te !e!(ctor,collector.

2.1.1.2 De!(ctor,collector ill #ay (#loa! *ee alon8 it service tax 4as a##lica/le 10.20 at #resent7 /y !eman! !ra*t or cas to te TI)-'+ *or every acce#te! 9(arterly e-

TDS,T+S statement.

/ai%4% c$ar"es payable per =4arterly e-TDSe-T+S state%ent accepte

*o. of De4ctee Recors in e-

TDST+S State%ent

'ploa +$ar"es 'ploa +$ar"es

incl4sive of service

ta

F#to 100 !e!(ctee recor!s 5 2=.0,- 5 30,-

101 to 1000 !e!(ctee recor!s 5 1,- 5 1$2,-

ore tan 1000 !e!(ctee

recor!s

5 0,- 5 0,-

2.1.1.3 TI)-'+ ill ret(rn te com#(ter me!ia containin8 te e-TDS,T+S statement to te!e!(ctor,collector

2.1.1.; TI)-'+ ill retain #ysical 'orm 2=A alon8 it oter !oc(ments" i* any" *(rnise!

/y te !e!(ctor,collector. Te retaine! #ysical 'orm 2=A alon8 it !oc(ments" i* any"

sall /e store! /y te TI)-'+ *or a #erio! o* one year *rom !ate o* recei#t o* te statement.

2.1.2 ))-A++


43/48

2.1.2.10 name,a!!ress o* !e!(ctor,collector !is#laye! on TA) aster !ata/ase !oes not

matc it name,a!!ress state! on 'orm 2=A an! !e!(ctor,collector !oes not #rovi!e TA)

can8e re9(estJ

2.1.2.11 mismatc o* control totals as #er it 'orm 2=A an! as #er e-*ileJ

2.1.2.12 te 9(arterly statement as not /een s(ccess*(lly #asse! tro(8 te latest version

o* 'MFJ

2.1.2.13 (arterly e-TDS,T+S statements !o not #ertain to te #erio! *or ic

!e!(ctors,collectors are alloe! to s(/mit teir statements.

2.1.2.1; +om#(ter me!ia is not vir(s *ree.

In s(c cases" TI)-'+ sall iss(e a #re-#rinte! )on Acce#tance emo citin8 reasons *or

non acce#tance to te !e!(ctor,collector to carry o(t necessary corrections.

In case o* non-acce#tance" TI)-'+ sall ret(rn te com#(ter me!ia as ell as any oter

!oc(ments *(rnise! an! #ysical 'orm 2=A to te !e!(ctor,collector.

)o *ee ill /e car8e! *or te e-TDS,e-T+S statement tat is not acce#te!.

A**,'R, )@

:Person Responsible for filin" !or% *o. 2E in case of State Eovt. Depart%entsoever" in tis case" te man!atory ann(itisation o(l! /e $0 o* te

#ension ealt.

Arc$itect4re of t$e ne# Pension Syste%

4iv7 It ill ave a central recor! @ee#in8 an! acco(ntin8 4+RA7 in*rastr(ct(re" several

#ension *(n! mana8ers 4P's7 to o**er tree cate8ories o* scemes viK. o#tion A" H an! +.

4v7 Te #artici#atin8 entities 4P's an! +RA7 o(l! 8ive o(t easily (n!erstoo!

in*ormation a/o(t #ast #er*ormance" so tat te in!ivi!(al o(l! /e a/le to ma@e in*orme!

coices a/o(t ic sceme to coose.

2. Te e**ective !ate *or o#erationaliKation o* te ne #ension system sall /e *orm 1sto*

Nan(ary" 200;.

A**,'R,-@)

*T)!)+AT)* S..10? 5,711G9!.*. 122888-TP; DAT,D 2-11-2000

In exercise o* te #oers con*erre! /y s(/-cla(se 4i7 o* cla(se 41$7 o* Section 10 o* te

Income-tax Act" 11 4;3 o* 117" te +entral Government" ere/y s#eci*ies te 8allantry

aar!s *or te #(r#oses o* te sai! Section" mentione! in col(mn 2 o* te ta/le /eloaar!e! in te circ(mstances as mentione! in corres#on!in8 col(mn 3 tereo*%-

Table

Sl.

)o.

)ame o* 8allantry aar! +irc(mstances *or eli8i/ility

417 427 437

1. Aso@ +a@ra :en aar!e! to +ivilians *or 8allantry

2. Qirti +a@ra !o -

3. Sa(rya +a@ra !o -


46/48

;. Sarvottan Neevan Ra@sa

Pa!a@

:en aar!e! to +ivilians *or /ravery

!is#laye! /y tem in li*e savin8 acts.

. Fttam Neevan Ra@sa

e!al

!o -

. Neevan Ra@sa Pa!a@ !o -

=. Presi!ent6s Police e!al

*or 8allantry

:en aar!e! *or acts o* exce#tional

co(ra8e !is#laye! /y mem/ers o* #olice

*orces" +entral #olice or sec(rity *orces

an! certi*ie! to tis e**ect /y te ea! o*

te !e#artment concerne!.

$. Police e!al *or Gallantry !o -


47/48

. Sena e!al :en aar!e! *or acts o* co(ra8e or

cons#icio(s 8allantry an! s(##orte! /y

certi*icate iss(e! to tis e**ect /y

relevant service ea!9(arters.10. )ao Sena e!al !o -

11. May( Sena e!al !o

12. 'ire Secrvices e!al *or

Gallantry

:en aar!e! *or acts o* co(ra8e or

cons#ic(o(s 8allantry an! s(##orte! /y

certi*icate iss(e! to tis e**ect /y te

last >ea! o* De#artment.

13. Presi!ent6s Police & 'ire

Services e!al *orGallantry

-!o-

1;. Presi!ent6s 'ire Services

e!al *or Gallantry

-!o-

1. Presi!ent6s >ome G(ar!s

an! +ivil De*ence e!al

*or Gallantry

-!o-

1. >ome G(ar! an! +ivil

De*ence e!al *or

Gallantry

-!o-

A**,'R, @))

*T)!)+AT)* *. S..?15,722!.*.122888-TP; DAT,D 28-1-2001

In exercise o* te #oers con*erre! /y s(/-cla(se 4i7 o* cla(se 41$7 o* Section 10 o* te

Income tax Act" 11 4;3 o* 1177" te +entral Government" ere/y s#eci*ies te 8allanty

aar!s *or te #(r#oses o* te sai! Section an! *or tat #(r#ose ma@es te *olloin8amen!ment in te noti*ication o* te Government o* In!ia in te inistry o* 'inance"

De#artment o* Reven(e 4+entral Hoar! o* Direct Taxes7 n(m/er S..10;$4


48/48

resi!ence *or a #erio! o*VVVVVVV..monts an! ave #ai! Rs. VVVVVV. In

cas,tro(8 crosse! ce9(e" /an@ !ra*t toar!s #ayment o* rent to

Sri,s,,sVVVVVVVVV.4name an! com#lete a!!ress o* te lan!lor!7.

It is *(rter certi*ie! tat no oter resi!ential accommo!ation is one! /y

4a7 me,my s#o(se,my minor cil!,o(r *amily 4in case te assessee is >F'7" at

VVVVVVV.ere I,e or!inarily resi!e,#er*orm !(ties o* o**icer or em#loyment or

carry on /(siness or #ro*ession" or

4a7 me,(s at any oter #lace" /ein8 accommo!ation in my occ(#ation" te val(e o* ic is

to /e !etermine! (,s 234274a74i7 o* (,s 234274/7.

So(rce- +)R+';AR *. 0G2011 O!.*. 2FG1822011-)T57Q DAT,D 19-?-2011

Income Tax Tds Instructions

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