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EMPLOYEE TAXATION
SBS AND COMPANY - Chartered ...
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SBS AND COMPANY - Chartered Accountants - www....
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SBS AND COMPANY - Chartered Accountants - www....
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Income from Salaries
• Gross Salary [As per de...
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Basis of Charge
• Chargeability: Section 15 to...
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ALLOWANCES
• Allowance is a fixed monetary amo...
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Type of
Allowances
HRA
Special
Allowances
Ente...
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House Rent Allowance (HRA)
[Section 10 (13A) &...
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Notes :
1. Salary means Basic salary + D.A. if...
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SBS AND COMPANY - Chartered Accountants - www....
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Special Allowances
[Section 10 (14) & Rule 2BB...
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Special allowances[10(14)] & Rule 2BB
For offi...
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II. Some allowances are exempt to the extent
o...
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These allowances are as follows :
Name Of Allo...
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III. Allowances where
exemption is allowed up ...
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PERQUISITE [Sec. 17(2)]
• Perquisite may be de...
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1.Allowed by
Employer to
Employee
4.Personal
a...
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1.Rent Free
Accommodation
Provided
by Employer...
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Valuation of Rent free unfurnished accommodati...
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Valuation of Rent Free Furnished
accommodation...
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Accommodation is provided in a Hotel
Stay is f...
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Motor Car benefits
Motor car Owned/hired by th...
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Owner of
the Car
Expenses
met by
Purpose Taxab...
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Owner of
the Car
Expenses
met by
Purpose Taxab...
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Leave Travel Assistance
SBS AND COMPANY - Char...
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Leave Travel Assistance
• Leave travel assista...
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• Computation of Exemption for LTA : The maxim...
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Other Facilities and Perquisites
Sweeper, Gard...
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Other Facilities and Perquisites
Free or conce...
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Other Facilities & Perquisites
Travelling, tou...
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Other Facilities and Perquisites
Nature of Per...
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Other Facilities and Perquisites
Nature of Per...
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Other Facilities and Perquisites
Nature of
Per...
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Notes:
• Electronic gadgets include computer, ...
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Taxability of Medical Facility
Some instances ...
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3)Any other Medical Expenditure reimbursed sub...
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Taxation of Retirement Benefits
Gratuity
Lea...
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GRATUITY Sec 10(10)
During Continuation Of
Ser...
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LEAVE SALARY ENCASHMENT Sec10(10AA)
During Con...
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PENSION Sec10(10A)
Uncommuted
Pension
Fully ta...
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RETRENCHMENT COMPENSATION Sec10(10B)
In any ot...
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VOLUNTARY RETIREMENT COMPENSATION Sec. 10(10C)...
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Sec10(11,12,13) Any sum received from PF,RPF,S...
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Deductions U/c VIA of the
Income Tax Act:
S. N...
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Deductions U/c VIA of
the Income Tax Act
S. No...
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Deductions U/c VIA of the Income Tax Act:
S. 
...
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Deductions U/c VIA of the Income Tax Act:
S. N...
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Deductions U/c VIA of the Income Tax Act:
S. N...
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RATES OF INCOME TAX:-
• Income Tax Rates/Slab ...
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RATES OF INCOME
TAX:-
• Income Tax Rates/Slab ...
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Tax Deducted At
Source (TDS)
• Any person resp...
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• The person responsible for making the paymen...
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Relief When Salary Paid in
Arrear or Advance:
...
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Section 206AA:
• Finance Act (No. 2) 2009, w.e...
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• According to the provisions of section 203, ...
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SBS AND COMPANY - Chartered Accountants - www....
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SBS AND COMPANY - Chartered Accountants - www....
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SBS AND COMPANY - Chartered Accountants - www....
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SBS AND COMPANY - Chartered Accountants - www....
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SBS AND COMPANY - Chartered Accountants - www....
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SBS AND COMPANY - Chartered Accountants - www....
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Name of the I T 
Building 
Particulars
Income ...
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Residential status
Residential status
Resident...
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Residential status …..Cont’d
None of
the
condi...
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Residential status …..Cont’d
Additional condit...
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SBS AND COMPANY - Chartered Accountants - www....
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Employeetaxation

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Employeetaxation

  1. 1. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net EMPLOYEE TAXATION SBS AND COMPANY - Chartered Accountants www.sbsandco.com M/s VELOX Corporate Services (P) Ltd., www.veloxcs.com SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 1
  2. 2. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com HEADS OF INCOME WHICH FALL UNDER TAX FOR SALARIED EMPLOYEES: 2
  3. 3. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 1. Income from Salaries 2. Income from House Property 3. Capital Gains; a) Income from Short Term Capital Gains (STCG); b) Income from Long Term Capital Gains (LTCG) 4. Income from Other Sources like Interest income, Dividends etc., 3
  4. 4. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Salary Basic + DA+ Commission etc. Normal components Allowances Perquisites Taxable To employee 4
  5. 5. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Income from Salaries • Gross Salary [As per definition U/s 17(1)] Basic Salary + Wages + Taxable portion of allowances + Taxable portion of perquisites + Taxable portion of gratuity, pension, etc. + Fees, Commission , Profit in lieu of or in addition to any salary or wages + Any Advance Salary + Leave Encashment + Contribution to RPF in excess of 12% of salary made by employer + Interest earned in excess of 8.5% on RPF + Contribution made by Central Government or any other employer to the account of an employee under Pension Scheme u/s 80CCD GROSS SALARY Less: Deduction U/s 16: 16(ii) Entertainment Allowance 16(iii) Professional Tax = INCOME FROM SALARY SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 5
  6. 6. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Basis of Charge • Chargeability: Section 15 to 17 of the Income Tax Act, 1961 provides for calculation of Income under the head “Salaries”. • For the purpose of chargeability of tax, salary consists of : a. Any salary due from an employer (or a former employer) to an assessee in the previous year, whether actually paid or not; b. Any salary paid or allowed to him in the previous year by or on behalf of an employer (or a former employer), though not due or before it became due ; and c. Any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer (or a former employer), if not charged to income tax for any earlier previous year. Remark: Salary income is chargeable to tax either on due basis or on receipt basis, whichever is earlier. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 6
  7. 7. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net ALLOWANCES • Allowance is a fixed monetary amount paid by the employer to the employee for meeting some particular expenses, whether personal or for the performance of his duties. • Certain allowances given by the employer to the employee are exempt u/s 10(14). All these exempt allowances are detailed in Rule 2BB of Income tax Rules and are briefly given hereinafter: SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 7
  8. 8. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Type of Allowances HRA Special Allowances Entertainment Allowance Allowances Exempt In Case Of Certain Persons Fully Taxable Allowances SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 8
  9. 9. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net House Rent Allowance (HRA) [Section 10 (13A) & Rule 2A] Least of the following is exempt : i. Actual amount received ii. Rent paid – 10 % of Salary iii. 50 % of Salary if rented house is situated in any one of the 4 metropolitan cities & 40 % of Salary in other cases. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 9
  10. 10. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Notes : 1. Salary means Basic salary + D.A. if terms of employment so provide. + Commission based on fixed % of turnover. 2. Where employee has not actually incurred expenditure on payment of rent or stays in his own accommodation, no exemption of HRA available. 3. Salary is to be taken on due basis in respect of the period during which the rented house is occupied by the employee. The salary of any other period is not to be included even though it may be received and taxed during the P.Y. (e.g. arrears of salary received during the P.Y.). SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com10
  11. 11. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Note: 11 No Exemption where an employee lives in his own house, or in a house for which he does not pay any rent (say in the house owned by parents, in-laws or spouse). Rent paid up to Rs. 15,000/- PM Original Rent paid receipt is Mandatory Rent paid > Rs. 15,000/- PM Circular No. 05/2001 dated 16.08.2001 a) PAN of the Landlord is mandatory. b) If no PAN a declaration to this effect along with name & address of the landlord is to be furnished c) Original Rent paid receipts are mandatory. d) Copy of rental agreement.
  12. 12. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Special Allowances [Section 10 (14) & Rule 2BB] I. Some allowances are exempt to the extent of least of the following : 1.Actual amount received from employer. 2.Amount spent for the purpose for which allowance received. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 12
  13. 13. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Special allowances[10(14)] & Rule 2BB For official duties (after Reaching office) Not directly relate to Official duty (General) 1.Official travel/transfer Allowance to meet the cost 2.Conveyance allowance to meet customers 3.Daily allowance on official Tour/journey 4.Helper allowance to carry Official documents 5. Research allowance 6. Uniform allowance to do Official duty To be Spent Fully Other Wise, amount not Spent taxable See in the Next slide SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 13
  14. 14. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net II. Some allowances are exempt to the extent of least of the following : 1. Actual amount received from employer 2. Limit Specified SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 14
  15. 15. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net These allowances are as follows : Name Of Allowance Limit Specified 1. Children education allowance 1. Rs. 100 per month per child up to a maximum of 2 children 2. Hostel expenditure allowance 2. Rs. 300 per month per child up to a maximum of 2 children. 3. Transport allowance 3. To meet expenditure for the purpose of commuting between place of his residence and the place of his duty. Blind or orthopedically handicapped with disability of lower extremities : Rs. 1,600 per month Other employees : Rs. 800 per month SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Note: Since these allowances are exempt to the extent amount received or limit specified, which ever is less, hence actual expenditure in this case have no relevance 15
  16. 16. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net III. Allowances where exemption is allowed up to certain % of amount received : Allowance allowed to transport employees : If any fixed allowance is given to meet personal expenditure during duty then least of the following shall be exempt : 1.70 % of the amount received 2.Rs. 10,000/- Per Month Note : Exemption will be allowed to transport employees only when they are not in receipt of daily allowance. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 16
  17. 17. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Deduction for any sum paid towards tax on employment (section 16 (iii)). Number of the Employees during the month in respect of whom the tax is payable is as under (in the State of Andhra Pradesh): If the professional tax is paid by the employer on behalf of the employee, it is first included in the salary of the employee as a “perquisite” (since it is an obligation of the employee discharged by the employer) and then the same amount is allowed as deduction on account of “professional tax” from gross salary. If the professional tax is paid by the employer on behalf of the employee, it becomes taxable whether the employee is a ‘specified employee’ or not. Employees whose monthly salaries or wages or both are Rate of Tax per Month Rs. i) Up to Rs. 5,000/- Nil ii) Range from Rs. 5,000/- to Rs. 6,000/- 60 iii) Range from Rs. 6,001/- to Rs.10,000/- 80 iv) Range from Rs.10,001/- to Rs. 15,000/- 100 v) Range from Rs.15,001/- to Rs. 20,000/- 150 vi) Range above Rs.20,000/- 200 17
  18. 18. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net PERQUISITE [Sec. 17(2)] • Perquisite may be defined as any casual emolument or benefit attached to an office or position in addition to salary or wages. • Need not be in kind. It can be in cash. • What are the conditions to be fulfilled to become a perks? SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 18
  19. 19. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net 1.Allowed by Employer to Employee 4.Personal advantage To the employee 5. Derived by Virtue of Employer’s authority 3.Directly Depend upon service 2.Allowed during Continuance Of employment Conditions To become Perquisites SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 19
  20. 20. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net 1.Rent Free Accommodation Provided by Employer 4.Personal obligations of Employee met by Employer 5. Funds paid By employer Other than RPF/Insurance fund 3.Value of Benefits provided Like Furniture in the accommodation 2.Concessional Accommodation provided by employer Perquisites Includes 6.Other Benefits Allowed to Employees Accommodation Related(1-3) Including sweeper, gardener, watchman, gas, electricity, SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 20
  21. 21. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Valuation of Rent free unfurnished accommodation (Private Sector employees or other employees) Where accommodation is owned by the Employer SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Where accommodation is taken on lease or rent by the employer i. 15% of the salary – where population >25 lakhs. ii.10% of the salary - where population > 10 lakhs < 25 lakhs iii.7.5% of the salary- in other cities. Lower of : i. 15% of the salary ii. Actual amount of rent payable by the employer. As reduced by the rent if any, paid by the employee. Salary= Basic salary +D.A +Bonus +Commission +Fees +all other taxable allowances (excluding amount not taxable) and any monetary payment. 21
  22. 22. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Valuation of Rent Free Furnished accommodation Provided by the employer If owned 10% of original Cost of furniture If rented Actual hire charges payable SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 22
  23. 23. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Accommodation is provided in a Hotel Stay is for transfer of location SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Stay is for other than transfer of location a. The hotel accommodation is provided for a period not exceeding in aggregate 15 days; And b. Such accommodation is provided on an employee’s transfer from one place to another. Perquisite (lower of the following) 23 Not a perquisite a) 24% of Salary b) Actual charges paid or payable to such hotel
  24. 24. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Motor Car benefits Motor car Owned/hired by the employer : SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Owner of the Car Expenses met by Purpose Taxable value of perquisite 1(a) Employer Employer Fully official use Not a perquisite, provided the documents specified in Rule 3(2)(B) * As per note below 1(b) Employer Employer Fully personal use a. Actual expenditure on car b. Remuneration to Chauffeur c. 10% of the cost of the car Aggregate of above Less: Amount charged from employee 1(c )(i) Employer Employer Partly for official and partly for Personal use a. Cubic capacity of car engine upto 1.6 litres: Rs.1800 p.m + Rs900 p.m for chauffeur b. Above 1.6 litres : Rs.2400 p.m + Rs900 p.m for chauffeur 24
  25. 25. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Owner of the Car Expenses met by Purpose Taxable value of perquisite 1(c )(ii) Employer Employee Partly for official and partly for Personal use a. Cubic capacity of car engine upto 1.6 liters: Rs.600 pm + Rs. 900 pm for chauffeur. b. Above 1.6 liters: Rs.900 pm + Rs.900 pm for chauffeur. 2(i) Employee Employer Fully official use Not a perquisite, provided the documents specified in Rule 3(2)(B)* are maintained . 2(ii) Employee Employer Partly for official and partly for Personal use Subject to Rule 3(2)(B)* Actual expenditure incurred less i. Cubic capacity of car engine upto 1.6 liters: Value as per 1(c )(i). ii. Cubic capacity of car engine upto 1.6 liters: Value as per 1(c )(i). SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Motor Car benefits …. contd 25
  26. 26. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Owner of the Car Expenses met by Purpose Taxable value of perquisite 3 (i) Employee owns other automotive but not car Employer Fully official use Not a perquisite, provided the documents specified in Rule 3(2)(B) *. 3 (ii) Employee owns other automotive but not car Employer Partly for official and partly for Personal use Subject to Rule 3(2)(B)* Actual expenditure incurred by employer Less: Rs.900 pm SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com * Note: Rule 3 (2)(B): Documents required for claiming ‘Not Taxable Perquisite’ or higher deduction wherever applicable: a. Employer should maintain complete details of journey undertaken for official purpose, which includes date of journey, destination, mileage and amount of expenditure incurred thereon. b. Certificate of supervising authority of the Employee, wherever applicable, to the effect that expenditure was incurred wholly and exclusively for performance of official duties, should be provided. 26 Motor Car benefits …. contd
  27. 27. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Leave Travel Assistance SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 27
  28. 28. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Leave Travel Assistance • Leave travel assistance may be provided by the employer to the employee and his family: a. In connection with proceeding on leave to any in India, while in service. b. Proceeding to any place in India after retirement or termination from service Conditions for benefit: a. An individual can avail the benefit of LTA offered by his employer, twice in block of four years. b. The present block of four years applicable for Assessment year 2013-14 is Calendar years 2011-14 (Present Block) c. If an individual has not availed the benefit twice in a block of four years, the first LTA availed in the next 4 years block can be taken for the previous block. d. This exemption is available only for two children of an individual born after 1.10.1998. There is no restriction for children born before 1.10.1998 and also in case of multiple births after one child. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 28
  29. 29. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net • Computation of Exemption for LTA : The maximum amount of exemption is the cost of travel on the shortest route. The exempt amount for various travelling modes are calculated in the following manner: SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Mode of travel Class of travel Amount exempt Economy class Travel charges on shortest route collected by National Airways I Class AC Travel charges on the shortest route Deluxe class Travel charges on the shortest route - I class AC as per Railways, equivalent for the distance for shortest route When taxable: a. LTC encashed without performing journey is fully taxable. b. Expenses incurred other than the Fare (like boarding or lodging) is fully taxable. c. Amount received from Employer in excess of the cost of travelling on the shortest route is taxable. 29
  30. 30. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Other Facilities and Perquisites Sweeper, Gardner, Watchman and personal attendant SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Amount of salary paid to such person incurred by the employer as reduced by the amount, if any, recovered from the employee. 2. Supply of gas, electric energy or water for employee’s household consumption Using the resources owned by the employer without purchasing from the outside agency Manufacturing cost per unit incurred by the employer as reduced by the amount, if any, actually paid by the employee. Any other case Actual amount incurred by the employer to the agency supplying the resources as reduced by the amount, if any, actually paid by the employee. 1. 30
  31. 31. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Other Facilities and Perquisites Free or concessional education facilities for any member of household SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Where educational institution is itself maintained and owned by the employer Or such facilities are allowed in other educational institute by reason of his being in employment of that employer In any other case The cost of education in similar institution in or near the locality. However, if the facilities are provided to the children of the employee, the value of benefit shall be NIL if the cost of such education per child does not exceed INR 1,000 pm. Actual amount incurred by the employer, as reduced by amount, if any, actually paid by the employee. 3. 31
  32. 32. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Other Facilities & Perquisites Travelling, touring, accommodation and any other facility provided by the employer for the personal purposes, other than leave travel concession. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Where such facility is maintained by the employer, and is not available uniformly to all employees. Where any official tour is extended as a vacation In any other case Value at which such facilities are offered by other agencies to the public as reduced by amount, if any, actually paid by the employee. Actual amount incurred by the employer in relation to such extended period of stay or vacation as reduced by amount, if any, actually paid by the employee. Actual amount incurred by the employer as reduced by amount, if any, actually paid by the employee. 4. 32
  33. 33. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Other Facilities and Perquisites Nature of Perquisite Taxable value of Perquisite 5. Free food and non- alcoholic beverages i. Actual amount incurred by the employer as reduced by amount, if any, actually paid by the employee. ii. If food and non-alcoholic beverages are provided during working hours at office or business premises or through non – transferrable paid vouchers usable only at eating joints, to the extent of INR 50 per meal is exempt from tax. iii. Tea and snacks provided during working hours and free food or non-alcoholic beverages during working hours exempt from tax. 6. Gift/Voucher/ Token in lieu of gift Actual amount of gift shall be considered as a perquisite. However, the value perquisite is NIL in case the value of gift is below INR 5000 in aggregate during the previous year. 7. Credit card expenses including membership and annual fees Actual Expenditure to Employee Less: Amount recovered from employee Note: If it is incurred for official purpose and supported by necessary documents, then it is not a taxable perquisite SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 33
  34. 34. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Other Facilities and Perquisites Nature of Perquisite Taxable value of Perquisite 8. Club expenses Actual expenditure incurred by the Employer Less: Amount recovered from employees Note: i. If it is incurred for official purpose and supported by necessary documents, then it is not a taxable perquisite ii. Initial Fee of Corporate membership of a club is not a taxable perquisite 9. Health club, sports and similar facilities If such facilities are provided uniformly by the employer to all the employees, the value of perquisite will be NIL. 10. Free use of moveable property owned by the Employer 10% PA of Actual cost if owned by employer, or Actual rental charge paid/ payable by employer Less: Amount recovered from employee SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 34
  35. 35. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Other Facilities and Perquisites Nature of Perquisite Taxable value of Perquisite 11. Transfer of any moveable assets Particulars Computer & Electronic gadgets Car Other moveable assets Method of depreciation WDV WDV SLM Rate of depreciation for every completed year 50% 20% 10% Actual Cost Less: Depreciation for completed years Less: Sale value taken from employee XX XX XX XX XX XX XX XX XX Taxable value of perquisite XX XX XX SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 35
  36. 36. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Notes: • Electronic gadgets include computer, digital diaries and printers, but exclude Washing machines, microwaves ovens, mixers, hot plates, etc. • Transfer of moveable assets which are 10 years old shall not attract taxability • Completed year means actual completed year from the date of acquisition of the asset to the date of transfer of such asset to the employees. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com36
  37. 37. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Taxability of Medical Facility Some instances of perquisites exempt from tax are given below: Provision of medical facilities, etc. (Proviso to Sec. 17(2)) 1) Value of any medical treatment provided to the employee or his family in; a) Hospital maintained by the employer. b) in any hospital maintained by the Government or any local authority or approved by the Government. c) Value of medical treatment for prescribed diseases or ailments in any hospital approved by the Chief Commissioner of Income-tax. Note: For claiming this benefit the employee needs to maintain a certificate from the hospital specifying the disease or ailment and receipt for the amount paid. 2) Group Medical Insurance Paid U/s 36(1)(ib) 3) Medical Insurance paid U/s 80D Note for 2 & 3 above: health insurance schemes to be approved by the Government or the Insurance Regulatory and Development Authority. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 37
  38. 38. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net 3)Any other Medical Expenditure reimbursed subject to a maximum of Rs. 15,000/-. 4) Premium of Accident Insurance policy. 5) Medical Treatment abroad: Expenditure incurred by the employer on medical treatment of the employee or his family member for medical treatment outside India. This includes travel and stay abroad of the employee or the family member plus one attendant who accompanies the patient in connection with the medical treatment. This exemption is subject to the condition that: Note: The expenditure excluded from the perquisite value shall be to the extent permitted by the Reserve Bank of India; and SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 38 Gross Total Income, before including reimbursement of Foreign Travel Expenditure Tax Treatment Upto Rs. 2,00,000/- Fully Exempt Above Rs. 2,00,000/- Fully Taxable Taxability of Medical Facility
  39. 39. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Taxation of Retirement Benefits Gratuity Leave Salary encashment Pension Retrenchment Compensation Voluntary Retirement Compensation SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 39
  40. 40. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net GRATUITY Sec 10(10) During Continuation Of Service On Termination Of Service Fully Taxable Fully Exempt Covered Under PGA Minimum of following exempted 1) Actual Gratuity Received 2) Rs. 10,00,000/- 3)1/2 month Avg. Salary X Completed Year of Service Minimum of following exempted 1) Actual Gratuity Received 2) Rs. 10,00,000/- 3) P.M. Salary X Completed Year of Service X 15/26 If Non Government Employee NO YESYES NO Note: * PGA= PAYMENT OF GRATUITY ACT *SALARY= BASIC+D.A, last drawn. *COMPLETED YEAR includes every completed year & period in excess of 6 months shall be treated as a year Note: *AVG. SALARY= (10 MONTHS BASIC SALARY+D.A.+TURNOVER BASED COMMISSION) / 10 *COMPLETED YEAR ignores any fraction of year. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 40
  41. 41. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net LEAVE SALARY ENCASHMENT Sec10(10AA) During Continuation Of Service On Termination Of Service Fully Taxable Fully Exempt Minimum of following exempted 1) Actual leave encashment received 2) Rs. 3,00,000/- 3) 10 Months average salary 4) 30 days average salary for every completed year of service, subject to leave availed during the tenure of service. If Non Government Employee NO YES Note: *AVG. SALARY= (10 MONTHS BASIC SALARY+D.A.+TURNOVER BASED COMMISSION) / 10 [LAST 10 MONTHS EXACT FROM THE DATE OF RETIREMENT.] *COMPLETED YEAR ignores ANY FRACTION SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 41
  42. 42. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net PENSION Sec10(10A) Uncommuted Pension Fully taxable Fully Exempt Assessee received gratuity ½ of total pension commuted shall be exempted. 1/3 rd of total pension commuted shall be exempted. If Non Government Employee NO YESYES NO Commuted Pension SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 42
  43. 43. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net RETRENCHMENT COMPENSATION Sec10(10B) In any other Case If Compensation Paid Under Any Scheme Approved By The Central Government. Nothing Shall Be Taxable. Minimum of following shall be exempted: a) Actual amount received b) Rs.5,00,000/- c) Any amount calculated under Industrial Disputes Act,1947 i.e 15 days average pay for every completed year of continuous service or any part thereof in excess of 6 months. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 43
  44. 44. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net VOLUNTARY RETIREMENT COMPENSATION Sec. 10(10C) In any other CaseReceived from specified employers Minimum of following shall be exempted a) Actual amount received as per V.R.S guidelines* or b)Rs.5,00,000/- Fully taxable *GUIDELINES:- a)COMPLETED AGE OF 40 YEARS OR COMPLETED 10 YEARS OF SERVICE (IT IS NOT APPLICABLE ON PUBLIC SECTOR COMPANY) b)THIS IS FRAMED TO REDUCE THE STRENGHT OF EMPLOYEES. c)THE VACANCY CAUSED BY VRS IS NOT TO BE FILLED UP d)THE RETIRING EMPLOYEE IS NOT EMPLOYED IN ANOTHER COMPANY BELONGING TO THE SAME MANAGEMENT e)* THE AMOUNT OF COMPENSATION DOES NOT EXCEED = 3 MONTHS SALARY FOR EACH COMPLETED YEAR OF SERVICE or SALARY AT THE TIME OF RETIREMENT x BALANCE MONTHS OF SERVICE LEFT Note: Exemption once allowed under this section, it cannot be claimed by the employee in relation to any other assessment year. # SPECIFIED EMPLOYERS :- a)COMPANY b)LOCAL AUTHORITY c)CO-OPERATIVE SOCIETY d)ANY AUTHORITY ESTABLISHED UNDER CENTRAL/STATE/PROVINCIAL ACT e)SPECIFIED UNIVERSITY f)INDIAN INSTITUTE OF TECHNOLOGY(IIT) g)STATE GOVERNMENT h)CENTRAL GOVERNMENT i)NOTIFIED INSTITUTION j)NOTIFIED INSTITUTION OF MANAGEMENT (IIM) SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 44
  45. 45. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Sec10(11,12,13) Any sum received from PF,RPF,SAF Type of fund Employer Contribution principal) Employer’s contribution interest) Employee's Contribution principal) Employees Contribution interest) Amount withdrawn on retirement SPF Exempt Exempt Deduction U/s 80C Exempt Exempt u/s 10(11) RPF Exempt up to 12% of salary Exempt up to 9.5% Deduction U/s 80C Exempt up to 9.5% Exempt subject to condition. If not then RPF treated as URPF URPF Exempt Exempt No Deduction us 80 C Exempt Employees contribution exempt. Interest on employee taxable under IOS. Employer contri taxable as salary PPF NA NA Deduction us 80C Exempt Exempt u/s 10(11) Approved Super Annuation fund Exempt Exempt Deduction us 80C Exempt Exempt u/s 10(3) Approved gratuity fund Exempt Exempt NA NA Exempt u/s 10(10) 45
  46. 46. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Deductions U/c VIA of the Income Tax Act: S. No. I.T.  Sec. Nature of Deduction Amount of deduction 1. 80 C Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to U/s. 10(23D), Tuition Fees (max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, Deposit in an account under Senior Citizens Savings Scheme rules, 5 year time deposit in an account under Post Office Time Deposit Rules, 1981 etc. Premium paid towards approved Pension Fund (like LIC’s Jeevan Suraksha) max. 1 lakh. Contribution to Central Government Pension Schemes. Upto 10% of salary with matching contribution from Government. Maximum overall Deductions allowed u/s. 80C, 80CCC & 80CCD is Rs. 1,00,000 (Employer  contribution to NPS is  deductible without  any limit from FY  2011‐12) 2 80  CCF Amount paid/deposited as subscription to long‐term infrastructure bonds being notified by the Central Government. (Available only for the AY: 2011‐12 & 2012‐ 13 only). Rs. 20,000 SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 46
  47. 47. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Deductions U/c VIA of the Income Tax Act S. No. I.T. Sec. Nature of Deduction Amount of deduction 3 80 D (a) Medical Insurance Premium paid by an individual/HUF by any mode of payment other than cash to effect or keep in force an insurance on the health of the assessee (self) or his family(spouse & dependent children) for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme. (b) Medical Insurance Premium paid by an individual/HUF by any mode of payment other than cash to effect or keep in force an insurance on the health of his/her parent or parents for policies taken from General Insurance Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme. Upto Rs.15,000 (Rs.  20,000 in case of senior  citizen) Upto Rs.15,000 (Rs.  20,000 in case of senior  citizen) 4. 80D Preventive Medical Check-up (AY: 2013-14) (sub limit under Sec 80D) Rs. 5,000/‐ SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 47
  48. 48. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Deductions U/c VIA of the Income Tax Act: S.  No. I.T. Sec. Nature of Deduction Amount of  deduction 5. 80 DD (a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent disability including blindness, mental retardation, autism, cerebral palsy or multiple disabilities (b) Deposits under LIC, UTI’s Scheme & other IRDA approved insurers for the benefit of physically handicapped dependent Note: Suffering from permanent physical disability or metal retardation including blindness, loss of voice, autism, cerebral palsy & multiple disabilities as per Rule 11D Rs.50,000  (Rs.1,00,000 if the  disability is severe  ie., > 80%) 6. 80 DDB (a) Actual expenditure incurred on Medical treatment of Self or dependant or a member of HUF suffering from terminal diseases like Cancer, AIDS, Renal failure etc. (b) For Senior Citizens(self or dependent on whom expenditure on medical treated is taken). Note: Neurological diseases, cancer, AIDS, Chronic Renal Failure, Hemophilia, Thalassaemia. Upto Rs.40,000 Upto Rs.60,000 7. 80 E Interest on loan taken from Financial/Charitable Institutions for Self/Spouse/Children for pursuing Higher Education (for a max. period of 8 yrs) Actual Interest  repaid 48
  49. 49. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Deductions U/c VIA of the Income Tax Act: S. No. I.T.  Sec. Nature of Deduction Amount of deduction 8. 80 G (a) Donations made to National Defense Fund, Prime Minister’s Relief Fund, approved Funds of reputed Educational Institutions, National Trust for Welfare of persons with Autism, Cerebral Palsy etc. (b) Donations made to Jawaharlal Memorial Fund, PM’s Drought Relief fund, Any approved Charitable Institution/Trust, Religious Institutions, a corporation established by the Government for promoting interest of the members of a Minority Community. Prohibition of cash donations in excess of ten thousand rupees. (W.E.F 01.04.2013 i. e. A.Y. 2013‐14 onwards 100% of Donation 50% of Donation restricted to 10% of Adjusted Gross Total Income 9. 80 GG Deduction in respect of rents paid, provided the assessee is not in receipt of HRA and no house is owned by self, spouse, minor child or HUF in the place of work subject to filing of declaration in Form No.10BA 25% of income or rent paid in excess of 10% of income or ceiling of Rs.24,000 p.a whichever is less SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 49
  50. 50. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Deductions U/c VIA of the Income Tax Act: S. No. I.T. Sec. Nature of Deduction Amount of deduction 10. 80 U Persons suffering from Permanent Physical Disability as specified in Rule 11D Rs.50,000 (Rs.1,00,000 in case of severe disability) 11. 80TTA Interest on Savings Bank Account (AY: 2013‐14) Rs. 10,000/‐ 12. 80CCG Investment made under any Equity Saving Scheme (subject to a maximum investment of Rs. 50,000) ‐ Applicable from AY: 2013‐14: Deduction under this section is available to a resident individual, if his gross total income does not exceed Rs. 10 Lakhs. Eligible Investment to claim: a) If the assessee is a new retail investor as specified in the notified scheme. b) The investment should be locked in for 3 years c) The amount of Deduction is 50% of amount invested in equity shares. Rs. 25,000/‐ SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 50
  51. 51. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net RATES OF INCOME TAX:- • Income Tax Rates/Slab for Assessment Year 2012-13 (F Y 2011-12): Note: Education Cess and Secondary Higher Education Cess @ 3% on the above will be added. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Particulars Rate (%) Up to Rs. 1,80,000/‐ Up to Rs. 1,90,000/‐ (for women assessee) Up to Rs. 2,50,000/‐ (for resident individual attaining of 60 years till 80 years) Up to 5,00,000/‐ (for resident individual of 80 years and above) NIL Rs. 1,80,001/‐ to Rs. 5,00,000/‐ (except for resident individual of 80 years and  above) 10 Rs. 5,00,001/‐ to Rs. 8,00,000/‐ 20 Rs. 8,00,001/‐ upwards  30 51
  52. 52. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net RATES OF INCOME TAX:- • Income Tax Rates/Slab for Assessment Year 2013-14 (F Y 2012-13): Note: Education Cess and Secondary Higher Education Cess @ 3% on the above will be added. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Particulars Rate (%) Up to Rs. 2,00,000/‐ Up to Rs. 2,00,000/‐ (for women assessee) Up to Rs. 2,50,000/‐ (for resident individual attaining of 60 years till of 80  years) Up to 5,00,000/‐ (for resident individual of 80 years and above) NIL Rs. 2,00,001/‐ to Rs. 5,00,000 (except for resident individual of 80 years  and above) 10  Rs. 5,00,001/‐ to Rs.10,00,000/‐ 20 Rs. 10,00,001/‐ upwards  30 52
  53. 53. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Tax Deducted At Source (TDS) • Any person responsible for paying any income chargeable under the head ‘salaries’ shall at the time of payment deduct the income-tax on the estimated income of the employee under the head “salaries” for that financial year. The tax has to be deducted at the average rate of income tax computed on the basis of the rates applicable for that particular financial year. • Where employee also has any other income (not loss) for the same financial year, chargeable under any other head, he may furnish the statement of such other income and tax deducted thereon to his employer to take them into consideration while deducting the tax from the salary. • But the loss under the head income from house property can be taken into consideration for the purpose of determining the amount of tax to be deducted from the income of the employee. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 53
  54. 54. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net • The person responsible for making the payment under the ‘salary’ at the time of making any deduction of tax, increase or decrease the amount to be deducted under the this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year. (section192 (3)) • Where during the financial year an assessee is employed simultaneously under more than one employer or has changed the employment during the previous year he may furnish to the employer of his choice or subsequent employer such details of the salary received by him from other employer(s) and other particulars in form 12B.The present employer or the employer so chosen by the employee will then deduct tax at source on aggregate amount of salary. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com54 Tax Deducted At Source (TDS) … contd
  55. 55. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Relief When Salary Paid in Arrear or Advance: • Under sub-section (2A)of section 192 where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Sub- section (1) of Section 89, he may furnish to the person responsible for making the payment such particulars in Form No. 10E duly verified by him, and thereupon the person responsible as aforesaid shall compute the relief on the basis of such particulars and take the same into account in making the deduction. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 55
  56. 56. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Section 206AA: • Finance Act (No. 2) 2009, w.e.f. 01/04/2010 has inserted sec. 206AA in the Income-tax Act which makes furnishing of PAN by the employee compulsory in case of payments liable to TDS. If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor shall make TDS at a higher of the following rates: • i. at the rate specified in the relevant provision of this Act; or • ii. at the rate or rates in force; or • iii. at the rate of twenty per cent. • The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS . This section applies to any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVII-B of Income Tax Act. As chapter XVII-B covers all Payments including Salaries, Salaries are also covered by Section 206AA. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 56
  57. 57. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net • According to the provisions of section 203, every person responsible for deducting tax at source is required to furnish a certificate in Form 16 to the payee to the effect that tax has been deducted and to specify therein the amount deducted and certain other particulars. The certificates in Forms 16 specified above shall be furnished to the employee by 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted. • The certificate in Form 16 shall specify: SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com a) PAN of deductee c) Challan Identification No. b) TAN of the Deductor d) Receipt No. 57
  58. 58. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Section 80QQB: Deduction in respect of royalty Income of Authors. Person: Individual resident in India. He is an author or joint author. Book authored by him is work of literary, artistic or scientific nature. Books shall not include brochures, commentaries, dairies, guides, journals, magazines, newspapers, pamphlets, textbooks for schools. Etc. Need to furnish a certificate in Form No. 10CCD from the person responsible for paying the income. Deduction not available unless it is claimed in the ROI. Amount of Deduction: Rs. 3,00,000 or, Amount of Consideration received on account of such ROYALTIES or COPYRIGHT fees including advance received, which is not returnable. Other Conditions: Royalty income not received in lump sum, than 15% of value of such books sold during the PY shall be ignored. Income earned outside India; i) It should remitted within six months from the end of the relevant PY or within such time as extended by RBI ii) A certificate from prescribed authority in FORM 10H should be submitted with the ROI iii) A Certificate from payer in FORM 10CCD should also be obtained. No deduction shall be allowed under any other provision of this Act in respect of such Income. 58
  59. 59. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Particulars Paper Form (Manual) e-filing without DSC) e-filing with DSC Taxable Income </= Rs. 10L Optional Optional Optional Taxable Income > Rs. 10L N A (e-filing is mandatory) Optional Optional Submission of Physical Forms Concerned IT Department ITR – V Acknowledgement to be sent to CPC Bangalore Not Necessary Time Period Within due date of filing ROI Within 120 days from the date of filing N A Address to file/Send Concerned IT Department CPC, Post Bag No.1, Electronic City Post Office, Bangalore – 560 100 by ORDINARY/ SPEED POST Concerned IT Department through online 59 Mode of Submission of the Return of Income:
  60. 60. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com No enclosures to the return:- Rule 12(2) of the I.T Rules provides that the return of income required to be furnished in prescribed Form shall not be accompanied by a statement showing the computation of tax payable on the basis of return, or proof of tax, if any, claimed deducted or collected at source or the advance tax or tax on self- assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income or return of fringe benefits under any provisions of the Act. For timely delivery of refunds; ensure correct address and Bank account number on your Return of Income – From 1.10.07 onwards, all income tax refunds to the Assessee's residing in specified places will be delivered by the Refund Banker directly at the communication address mentioned on the Return of Income. Taxpayers are requested to fill in the correct address (available during working hours for delivery) to ensure speedy delivery of refunds. In the case of taxpayers who opt for refunds through ECS, it will be credited directly to the bank account for which correct MICR code/ Bank Account Number has to be furnished on the Return 60
  61. 61. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Normally the employer shall deduct TDS from the salaries on monthly basis. If any employee is having other incomes like Income from House Property, Capital Gains and Income from Other Sources then the advance tax is to be calculated by him and pay the same to the government account. If total tax payable is more than Rs. 10,000/-, then liability for payment of advance tax arises. The due dates for payment of advance tax in Installments: Note: If any amount is paid before 31st March, such payment is also considered as Advance Tax for the period. S. No. Advance Tax % of Tax 1st On or before 15th September >= 30% 2nd On or before 15th December >= 60% 3rd On or before 15th March Entire Balance 61 DUE DATES FOR PAYMENT OF ADVANCE TAX & FILING OF RETURN:
  62. 62. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com FORMS TO BE USED: - The forms to be used for filing the return of income on wards are mentioned below:- ITR 1(SAHAJ) – Income from salary/pension: or Income from one house property (excluding where loss brought forward from previous year): or Income from other sources (excluding winnings from lottery and income from races horses). ITR 2 – Individual who cannot file SAHAJ (ITR 1) above and where the total income does not include any income chargeable to income-tax under the head “Profits or gains of business or profession”. Challan to be used for making Tax payment: Challan Number: 280 for Advance Tax and Self-Assessment Tax. Challan Number: 281 for payment of TDS by the employer. DUE DATE FOR FILING OF INCOME TAX RETURN: a) On or before 31/07/2012 for the assessment year 2012-13; b) On or before 31/07/2013 for the assessment year 2013-14. 62 ITR Forms and other related matters
  63. 63. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Person having total taxable income up to Rs 5 lakh Salary income from one employer including saving bank interest up to Rs 10,000/- is exempted from Income tax return for Assessment Year 2012-13 & 2013-14. Who can Claim Exemption? a) This exemption is available to Individual assessee only (resident or not). b) Total Income (after deduction 80C to 80U) of Individual must be up to Rs.5L. c) Income must be earned from Salary and/or Saving Bank Interest up to Rs. 10K d) Pension is also covered under salary head. e) Individual must have reported his PAN to his employer. f) He has earned salary only from one employer during the year. g) He has reported his income from saving Bank Interest to his employer for TDS deduction purposes. h) Employer has deducted the tax on his Full income, salary plus interest {taxable if any}, and TDS has been deposited in Govt account by the employer. i) No refund is Due to an Assessee. j) Individual has received Form 16 Form the employer, which mentions PAN, Income detail and Tax deducted and deposit detail. k) The above notification for exemption is optional for Assessee and he may or may not avail this exemption. 63 Exemption from filing of ITR
  64. 64. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com FORM No.26AS: Assessee’s can view their Annual Tax Statement (Form No.26AS) online by logging on to www.incometaxindiaefiling.gov.in or www.tin-nsdl.com or through their bank account login mode. Belated Return: Section 139(4) provides that a return which has not been furnished by the due date may still be furnished as a belated return before the expiry of one year from the end of the assessment year or before the completion of assessment, whichever is earlier. However, on any return of income that has not been filed by the end of the relevant assessment year, penalty of Rs.5,000/- U/s 271F may be levied. Revised Return: If a person having filed his return within the due date; discovers any omission or wrong statement therein, he may file a revised return before the expiry of one year from the end of the assessment year or completion of assessment whichever is earlier. 64 Form 26AS and other related matters
  65. 65. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com (i) INTEREST U/S 234A: Delay in filing of income tax return within due date (31st July) shall attract a simple interest @ 1% for every month or part thereof on the tax payable. If the TDS covered fully/ Taxes paid fully then Interest under this section will not attract. (ii) INTEREST U/S 234B: If the advance tax is not paid/ TDS is not covered, Interest on the tax payable @ 1% for every month or part thereof from 1st April to till the date of payment. If the TDS covered fully/ Taxes paid fully then Interest under this section will not attract. (iii) INTEREST U/S 234C: For deferment of advance tax payment; If advance tax paid is less than specified percentage and/or not paid within due date, simple interest @ 1% per month or part thereof is payable on tax determined on returned income as reduced by TDS/TCS/Amount of advance tax already paid or tax relief, if any, under Double Tax Avoidance Agreement with forgoing contribution. (iv) INTEREST U/S 234D: Interest @ 0.5% is levied under this Section when any refund is granted to the assessee u/s 143(1) and/or on regular assessment if it is found that either no refund is due or the amount already refunded exceeds the refund determined on regular assessment. The said interest is levied @ 0.5% on the whole or excess amount so refunded for every month or part thereof from the date. 65 Payment of Interest
  66. 66. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Intimation U/s 143(1): The Finance Act 2008 has reintroduced provisions in respect of correcting arithmetical mistakes or internal inconsistencies at the stage of processing of returns. It has, thus been provided that, during the stage of processing, the total income shall be computed after making adjustments in respect of any arithmetical error in the return or any incorrect claim apparent from information in the return and if on such computation, any tax or interest or refund is found due on adjustment of TDS or advance tax or self-assessment tax, then an intimation specifying the amount payable shall be prepared/generated or issued to the assessee. If any refund is found due, it is to be sent along with the intimation to such effect. If no demand or no refund arises, the acknowledgement of the return is deemed to be treated as intimation. Such intimation is to be sent within one year from the end of the financial year in which the return is filed. Assessment u/s 143(3): If the Assessing Officer, on the basis of the return filed by the assessee, considers that it is necessary to ensure that the assessee has not understated his income, he shall serve on the assessee a notice u/s 143(2) and, after obtaining such information as he may require, complete the assessment (commonly referred as scrutiny assessment) u/s 143(3). Rectification of mistake u/s 154: If any order passed by an income tax authority suffers from a mistake apparent from record, the assessee may make an application for rectifying the same before the expiry of four years from the end of the financial year in which the above order was passed. The Finance Act 2001 has provided that where an application for rectification under this Section is made by the assessee on or after 1.6.2001, the same shall have to be acted upon by the income tax authority within a period of six months from the end of the month in which the application is received. 66 Communication with IT Dept.
  67. 67. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Name of the I T  Building  Particulars Income declared     > Rs. 20L  Income declared       < Rs. 20L AAYAKAR BHAVAN Pensioners & Salaries Employees of Banks, Insurance Corporations Including LIC, All Organizations/ Establishments/ Institutions/ Hospitals & Medicals Institutions in Private Sectors Including Companies, Missionary Bodies & Private Educational Institutions. Circle ‐ 12(1) Range ‐ 12 AAYAKAR BHAVAN Pensioners & Salaries Employees of Central & State Government Departments including Central & State Govt Undertakings and Local Authorities/ Autonomous Bodies, All Agencies/ Bodies/ Organization like ICRISAT, etc., Income Tax Dept in AP State, Cantonment Board & Municipalities. Circle ‐ 13(1) Range ‐ 13 SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 67 SALARY CASES - JURISDICTION OF HYDERABAD INCOME TAX OFFICES
  68. 68. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Residential status Residential status Resident Resident and Ordinarily Resident (ROR) Resident but Not Ordinarily Resident (NOR) Non Resident (NR) Residency is determined by number of days stay in India SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com68
  69. 69. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Residential status …..Cont’d None of the conditions satisfied Any one of the two conditions satisfied ROR / NOR NR Basic conditions: • 182 days or more in a financial year • 60 days* or more in a financial year plus 365 days or more in four financial years preceding the relevant financial year * 60 days gets substituted for 182 days only in the year of departure for an Indian citizen proceeding abroad for the purposes of employment. In the year of arrival to India for resuming employment, the threshold limit is 60 days. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com69
  70. 70. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net Residential status …..Cont’d Additional conditions: • “Resident” in India in atleast two out of ten financial years preceding the relevant financial year; and • Present in India for 730 days or more during the 7 financial year preceding the relevant financial year ROR NOR Both the conditions satisfied One or none of the condition s satisfied Generally, an expatriate coming to India for the first time will qualify as ROR in the 3rd or 4th year. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 70
  71. 71. Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Thank You 71 SBS AND COMPANY - Chartered Accountants www.sbsandco.com; info@sbsandco.com M/s VELOX Corporate Services (P) Ltd., www.veloxcs.com; info@veloxcs.com

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