Your SlideShare is downloading. ×
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Employee+taxation
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Employee+taxation

10,507

Published on

Published in: Business, Economy & Finance
9 Comments
15 Likes
Statistics
Notes
No Downloads
Views
Total Views
10,507
On Slideshare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
475
Comments
9
Likes
15
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. EMPLOYEE TAXATION SBS AND COMPANY - Chartered Accountants www.sbsandco.com M/s VELOX Corporate Services (P) Ltd., www.veloxcs.comSBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 1 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 2. HEADS OF INCOME WHICH FALL UNDER TAXFOR SALARIED EMPLOYEES:SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 2 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 3. 1. Income from Salaries2. Income from House Property3. 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., SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 3 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 4. Salary Perquisites Basic + DA+ Taxable Commission etc. To Normal components employee AllowancesSBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 4 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 5. 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 80CCDGROSS SALARYLess: Deduction U/s 16: 16(ii) Entertainment Allowance 16(iii) Professional Tax= INCOME FROM SALARY 5 SBS AND COMPANY - Chartered From :www.simpletaxindia.net Download Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 6. 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 ; andc. 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. 6 SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 7. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 8. HRA Fully Taxable Special Allowances Allowances Type of Allowances Allowances Exempt In Entertainment Case Of Allowance Certain Persons 8SBS AND COMPANY - Chartered From :www.simpletaxindia.net Download Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 9. House Rent Allowance (HRA) [Section 10 (13A) & Rule 2A]Least of the following is exempt :i. Actual amount receivedii. Rent paid – 10 % of Salaryiii. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 10. 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.com 10 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 11. Note: 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/- Original Rent paid receipt is PM Mandatory Rent paid > Rs. 15,000/- PM a) PAN of the Landlord is Circular No. 05/2001 dated mandatory. 16.08.2001 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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 11 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 12. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 13. Special allowances[10(14)] & Rule 2BBFor official duties (after Not directly relate to Reaching office) Official duty (General)1.Official travel/transfer Allowance to meet the cost2.Conveyance allowance To be to meet customers Spent3.Daily allowance on official Fully Tour/journey Other4.Helper allowance to carry Wise, amount See in Official documents not the5. Research allowance Spent Next6. Uniform allowance to do taxable slide Official duty SBS AND COMPANY - Chartered Accountants - 13 Download From :www.simpletaxindia.net www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 14. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 15. These allowances are as follows : Name Of Allowance Limit Specified1. Children education allowance 1. Rs. 100 per month per child up to a maximum of 2 children2. 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 betweenNote: Since these allowances place of his residence and theare exempt to the extent amount place of his duty.received or limit specified, Blind or orthopedicallywhich ever is less, hence actual handicapped with disability ofexpenditure in this case have no lower extremities : Rs. 1,600relevance per month Other employees : Rs. 800 per month SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 15 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 16. III. Allowances where exemption is allowed up tocertain % 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. 16SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 17. 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 ispayable is as under (in the State of Andhra Pradesh): Employees whose monthly salaries or wages or Rate of Tax per both are 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If the professional tax is paid by the employer on behalf of the employee, it isfirst included in the salary of the employee as a “perquisite” (since it is anobligation of the employee discharged by the employer) and then the sameamount is allowed as deduction on account of “professional tax” from grosssalary.If the professional tax is paid by the employer on behalf of the employee, itbecomes taxable whether the employee is a ‘specified employee’ or not. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 17 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 18. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 19. Conditions To become Perquisites 1.Allowed by Employer to 4.Personal Employee advantage To the employee 3.Directly Depend upon service 5. Derived by2.Allowed during Virtue of Continuance Employer’s Of employment authority 19 Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 20. Perquisites Includes 1.Rent Free Accommodation Provided 4.Personal by Employer obligations of Employee met by Employer Accommodation Related(1-3)Including sweeper, gardener, watchman, gas, electricity, 3.Value of Benefits provided 6.Other Like Furniture Benefits in the accommodation Allowed to Employees 5. Funds paid 2.Concessional By employerAccommodation Other than provided RPF/Insurance by employer fund SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; 20 Download Frominfo@sbsandco.com :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 21. Valuation of Rent free unfurnished accommodation (Private Sector employees or other employees) Where accommodation is Where accommodation is taken on lease or rent by owned by the Employer the employer Lower of :i. 15% of the salary – where population i. 15% of the salary >25 lakhs. ii. Actual amount of rent payable byii.10% of the salary - where population the employer. > 10 lakhs < 25 lakhsiii.7.5% of the salary- in other cities. 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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 21 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 22. Valuation of Rent Free Furnishedaccommodation Provided by the employer If rented Actual hire charges payable If owned 10% of original Cost of furnitureSBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 22 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 23. Accommodation is provided in a Hotel Stay is for transfer of Stay is for other than location transfer of locationa. The hotel accommodation is provided for Perquisite (lower of the following)a period not exceeding in aggregate 15 days;Andb. Such accommodation is provided on anemployee’s transfer from one place to another. a) 24% of Salary b) Actual charges paid or payable to such hotel Not a perquisite SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 23 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 24. Motor Car benefitsMotor car Owned/hired by the employer :Owner of Expenses Purpose Taxable value of perquisitethe Car met by1(a) Employer Fully Not a perquisite, provided the documentsEmployer official use specified in Rule 3(2)(B) * As per note below1(b) Employer Fully a. Actual expenditure on carEmployer personal use b. Remuneration to Chauffeur c. 10% of the cost of the car Aggregate of above Less: Amount charged from employee1(c )(i) Employer Partly for a. Cubic capacity of car engine upto 1.6Employer official and litres: Rs.1800 p.m + Rs900 p.m for partly for chauffeur Personal use b. Above 1.6 litres : Rs.2400 p.m + Rs900 p.m for chauffeur SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 24 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 25. Motor Car benefits …. contdOwner of Expenses Purpose Taxable value of perquisitethe Car met by1(c )(ii) Employee Partly for a. Cubic capacity of car engineEmployer official and upto 1.6 liters: Rs.600 pm + Rs. partly for 900 pm for chauffeur. Personal use b. Above 1.6 liters: Rs.900 pm + Rs.900 pm for chauffeur.2(i) Employer Fully official Not a perquisite, provided theEmployee use documents specified in Rule 3(2)(B)* are maintained .2(ii) Employer Partly for Subject to Rule 3(2)(B)*Employee official and Actual expenditure incurred less partly for i. Cubic capacity of car engine upto Personal use 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). 25 SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 26. Motor Car benefits …. contdOwner of Expenses Purpose Taxable value of perquisitethe Car met by3 (i) Employer Fully official Not a perquisite, provided theEmployee use documents specified in Ruleowns other 3(2)(B) *.automotivebut not car3 (ii) Employer Partly for Subject to Rule 3(2)(B)*Employee official and Actual expenditure incurred byowns other partly for employerautomotive Personal use Less: Rs.900 pmbut not car* Note: Rule 3 (2)(B): Documents required for claiming ‘Not Taxable Perquisite’ orhigher 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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 26 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 27. Leave Travel Assistance SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 27 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 28. 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 serviceConditions 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 29. • 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: 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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 29 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 30. Other Facilities and Perquisites1. Sweeper, Gardner, Amount of salary paid to such person Watchman and personal incurred by the employer as reduced by the amount, if any, recovered from the attendant employee.2. Using the resources Manufacturing cost per owned by the unit incurred by the employer as reduced by employer without the amount, if any, purchasing from the actually paid by the Supply of gas, outside agency employee. electric energy or water for employee’s household consumption Actual amount incurred by the employer to the agency supplying the Any other case resources as reduced by the amount, if any, actually paid by the employee. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 30 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 31. Other Facilities and Perquisites 3. Free or concessional education facilities for any member of householdWhere educational institution is itselfmaintained and owned by the employer Or In any other casesuch facilities are allowed in othereducational institute by reason of his beingin employment of that employerThe cost of education in similar institution inor near the locality. However, if the facilities Actual amount incurredare provided to the children of the by the employer, asemployee, the value of benefit shall be NIL if reduced by amount, ifthe cost of such education per child does not any, actually paid by theexceed INR 1,000 pm. employee. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 31 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 32. Other Facilities & Perquisites 4. Travelling, touring, accommodation and any other facility provided by the employer for the personal purposes, other than leave travel concession.Where such facility ismaintained by the Where any official tour isemployer, and is not In any other case extended as a vacationavailable uniformly toall employees.Value at which such Actual amount incurred by Actual amountfacilities are offered by the employer in relation to incurred by theother agencies to the such extended period of employer aspublic as reduced by stay or vacation as reduced byamount, if any, reduced by amount, if any, amount, if any,actually paid by the actually paid by the actually paid byemployee. employee. the employee. 32 Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 33. Other Facilities and Perquisites Nature of Perquisite Taxable value of Perquisite5. Free food and non- i. Actual amount incurred by the employer as reduced by amount,alcoholic beverages 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 Actual amount of gift shall be considered as a perquisite. However,in lieu of gift 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 Actual Expenditure to Employeeincluding membership Less: Amount recovered from employeeand annual fees Note: If it is incurred for official purpose and supported by necessary documents, then it is not a taxable perquisite SBS AND COMPANY -Download From :www.simpletaxindia.net Chartered Accountants - www.sbsandco.com; info@sbsandco.com 33 Download From :www.simpletaxindia.net
  • 34. Other Facilities and PerquisitesNature of Perquisite Taxable value of Perquisite8. 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 perquisite9. Health club, If such facilities are provided uniformly by the employer tosports and similar all the employees, the value of perquisite will be NIL.facilities10. Free use of 10% PA of Actual cost if owned by employer, or Actualmoveable property rental charge paid/ payable by employerowned by the Less: Amount recovered from employeeEmployer SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 34 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 35. Other Facilities and Perquisites Nature of Taxable value of Perquisite Perquisite11. Transfer Particulars Computer Car Other moveableof any & assetsmoveable Electronicassets gadgets Method of depreciation WDV WDV SLM Rate of depreciation for 50% 20% 10% every completed year Actual Cost XX XX XX Less: Depreciation for completed years XX XX XX Less: Sale value taken from employee XX XX XX Taxable value of XX XX XX perquisite SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 35 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 36. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 37. Taxability of Medical FacilitySome 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 80DNote 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 38. Taxability of Medical Facility3)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: Gross Total Income, before Tax Treatment including reimbursement of Foreign Travel Expenditure Upto Rs. 2,00,000/- Fully Exempt Above Rs. 2,00,000/- Fully TaxableNote: 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 39. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 40. GRATUITY Sec 10(10) During Continuation Of On Termination Of Service Service Fully Taxable If Non Covered Government YES Under PGA YES Employee NO NOMinimum of following exempted Minimum of following exempted1) Actual Gratuity Received 1) Actual Gratuity Received2) Rs. 10,00,000/- 2) Rs. 10,00,000/-3) P.M. Salary X Completed Year of 3)1/2 month Avg. Salary XService X 15/26 Completed Year of Service Fully ExemptNote: Note:* PGA= PAYMENT OF GRATUITY ACT *AVG. SALARY= (10 MONTHS BASIC*SALARY= BASIC+D.A, last drawn. SALARY+D.A.+TURNOVER BASED*COMPLETED YEAR includes every COMMISSION) / 10completed year & period in excess of 6 *COMPLETED YEAR ignores any fractionmonths shall be treated as a year of year. 40 Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 41. LEAVE SALARY ENCASHMENT Sec10(10AA) During Continuation Of On Termination Of Service Service Fully Taxable If Non YES Government Employee Minimum of following exempted 1) Actual leave encashment received NO 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. Fully ExemptNote:*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 41 SBS AND COMPANY - CharteredFrom :www.simpletaxindia.net Download Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 42. PENSION Sec10(10A) Uncommuted Commuted Pension Pension Fully taxable Assessee YES If Non YES received Government gratuity Employee NO NO Fully Exempt1/3 rd of total pension commuted ½ of total pension commuted shall beshall be exempted. exempted. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 42 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 43. RETRENCHMENT COMPENSATION Sec10(10B)If Compensation Paid Under Any Scheme Approved By The Central Government. In any other Case 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 Nothing Shall Be Taxable. service or any part thereof in excess of 6 months. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 43 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 44. VOLUNTARY RETIREMENT COMPENSATION Sec. 10(10C) Received from specified employers In any other Case Minimum of following shall be exempted a) Actual amount received as per Fully taxable V.R.S guidelines* or b)Rs.5,00,000/- *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 SOCIETYd)ANY AUTHORITY ESTABLISHED UNDER CENTRAL/STATE/PROVINCIAL ACTe)SPECIFIED UNIVERSITY f)INDIAN INSTITUTE OF TECHNOLOGY(IIT)g)STATE GOVERNMENT h)CENTRAL GOVERNMENT i)NOTIFIED INSTITUTIONj)NOTIFIED INSTITUTION OF MANAGEMENT (IIM) 44 Download From :www.simpletaxindia.net SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net
  • 45. Sec10(11,12,13) Any sum received from PF,RPF,SAFType of Employer Employer’s Employees Employees Amount withdrawnfund Contribution contribution Contribution Contribution on retirement principal) interest) principal) interest)SPF Exempt Exempt Deduction U/s Exempt Exempt u/s 10(11) 80CRPF Exempt up to Exempt up to Deduction U/s Exempt up to Exempt subject to 12% of salary 9.5% 80C 9.5% condition. If not then RPF treated as URPFURPF Exempt Exempt No Deduction us Exempt Employees 80 C contribution exempt. Interest on employee taxable under IOS. Employer contri taxable as salaryPPF NA NA Deduction us 80C Exempt Exempt u/s 10(11)Approved Exempt Exempt Deduction us 80C Exempt ExemptSuper u/s 10(3)AnnuationfundApproved Exempt Exempt NA NA Exemptgratuity u/s 10(10)fund 45 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 46. Deductions U/c VIA of the Income Tax Act: I.T. S. No. Nature of Deduction Amount of deduction Sec. 1. 80 C Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to U/s. 10(23D), Tuition Fees (max. 2 Maximum overall Children), Repayment of Principal of Housing loan, Bank Deductions Fixed Deposit of 5 yrs period, notified Bonds of NABARD, allowed u/s. 80C, Deposit in an account under Senior Citizens Savings 80CCC & 80CCD Scheme rules, 5 year time deposit in an account under is Rs. 1,00,000 Post Office Time Deposit Rules, 1981 etc. (Employer  Premium paid towards approved Pension Fund (like LIC’s contribution to NPS is  Jeevan Suraksha) max. 1 lakh. deductible without  Contribution to Central Government Pension Schemes. any limit from FY  Upto 10% of salary with matching contribution from 2011‐12) Government.2 80  Amount paid/deposited as subscription to long‐term Rs. 20,000 CCF infrastructure bonds being notified by the Central Government. (Available only for the AY: 2011‐12 & 2012‐ 13 only). SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 46 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 47. Deductions U/c VIA of the Income Tax ActS. No. I.T. Sec. Nature of Deduction Amount of deduction3 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 Upto Rs.15,000 (Rs.  from General Insurance Corporation /other approved 20,000 in case of senior  Insurance Regulatory and Development Authority or any citizen) 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 Upto Rs.15,000 (Rs.  in force an insurance on the health of his/her parent or 20,000 in case of senior  parents for policies taken from General Insurance citizen) Corporation /other approved Insurance Regulatory and Development Authority or any contribution made to the Central Government Health Scheme. 4. 80D Preventive Medical Check-up (AY: 2013-14) (sub Rs. 5,000/‐ limit under Sec 80D) SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 47 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 48. Deductions U/c VIA of the Income Tax Act: S.  Amount of  I.T. Sec. Nature of DeductionNo. deduction 5. 80 DD (a) Any expenditure for Medical, Nursing & Rehabilitation incurred on dependant suffering from permanent Rs.50,000  disability including blindness, mental retardation, autism, (Rs.1,00,000 if the  cerebral palsy or multiple disabilities disability is severe  (b) Deposits under LIC, UTI’s Scheme & other IRDA ie., > 80%) 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 6. 80 DDB (a) Actual expenditure incurred on Medical treatment of Self Upto Rs.40,000 or dependant or a member of HUF suffering from terminal Upto Rs.60,000 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. 7. 80 E Interest on loan taken from Financial/Charitable Institutions Actual Interest  for Self/Spouse/Children for pursuing Higher Education (for a repaid max. period of 8 yrs) 48 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 49. Deductions U/c VIA of the Income Tax Act: I.T. S. No. Nature of Deduction Amount of deduction Sec. 80 G (a) Donations made to National Defense Fund, Prime100% of Donation Minister’s Relief Fund, approved Funds of reputed50% of Donation 8. Educational Institutions, National Trust for Welfare ofrestricted to 10% of persons with Autism, Cerebral Palsy etc. Adjusted Gross Total (b) Donations made to Jawaharlal Memorial Fund, PM’sIncome 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 9. 80 GG Deduction in respect of rents paid, provided the25% of income assessee is not in receipt of HRA and no house is ownedor rent paid in excess by self, spouse, minor child or HUF in the place of workof 10% of income subject to filing of declaration in Form No.10BA or ceiling of Rs.24,000 p.a whichever is less SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 49 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 50. 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 asRs.50,000 (Rs.1,00,000 specified in Rule 11D 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 SchemeRs. 25,000/‐ (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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 50 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 51. RATES OF INCOME TAX:- • Income Tax Rates/Slab for Assessment Year 2012-13 (F Y 2011-12): Particulars Rate (%)Up to Rs. 1,80,000/‐Up to Rs. 1,90,000/‐ (for women assessee) NILUp 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)Rs. 1,80,001/‐ to Rs. 5,00,000/‐ (except for resident individual of 80 years and  10above)Rs. 5,00,001/‐ to Rs. 8,00,000/‐ 20Rs. 8,00,001/‐ upwards  30Note: Education Cess and Secondary Higher Education Cess @ 3% on the above will be added. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com51 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 52. RATES OF INCOME TAX:-• Income Tax Rates/Slab for Assessment Year 2013-14 (F Y 2012-13): 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  NIL years) Up to 5,00,000/‐ (for resident individual of 80 years and above) Rs. 2,00,001/‐ to Rs. 5,00,000 (except for resident individual of 80 years  10  and above) Rs. 5,00,001/‐ to Rs.10,00,000/‐ 20 Rs. 10,00,001/‐ upwards  30Note: 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 52 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 53. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 54. Tax Deducted At Source (TDS) … contd• 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 55. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 56. 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 57. • 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: a) PAN of deductee c) Challan Identification No. b) TAN of the Deductor d) Receipt No. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 57 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 58. 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 shallnot 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 forpaying 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 ofsuch Income. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 58 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 59. Mode of Submission of the Return of Income: Particulars Paper Form e-filing without e-filing with (Manual) DSC) DSCTaxable Income Optional Optional Optional</= Rs. 10LTaxable Income > N A (e-filing is Optional OptionalRs. 10L mandatory)Submission of Concerned IT ITR – V Not NecessaryPhysical Forms Department Acknowledgement to be sent to CPC BangaloreTime Period Within due date Within 120 days from N A of filing ROI the date of filingAddress to Concerned IT CPC, Post Bag No.1, Concerned ITfile/Send Department Electronic City Post Department Office, Bangalore – through online 560 100 by ORDINARY/ SPEED POST SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com59 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 60. No enclosures to the return:- Rule 12(2) of the I.T Rules provides that the returnof income required to be furnished in prescribed Form shall not be accompanied by astatement showing the computation of tax payable on the basis of return, or proof oftax, 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 anyaccount or form or report of audit required to be attached with the return of incomeor return of fringe benefits under any provisions of the Act.For timely delivery of refunds; ensure correct address and Bank account numberon your Return of Income – From 1.10.07 onwards, all income tax refunds to theAssessees residing in specified places will be delivered by the Refund Banker directlyat the communication address mentioned on the Return of Income. Taxpayers arerequested to fill in the correct address (available during working hours for delivery) toensure speedy delivery of refunds. In the case of taxpayers who opt for refundsthrough ECS, it will be credited directly to the bank account for which correct MICRcode/ Bank Account Number has to be furnished on the Return SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 60 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 61. DUE DATES FOR PAYMENT OF ADVANCE TAX & FILING OF RETURN:Normally the employer shall deduct TDS from the salaries on monthly basis. If anyemployee is having other incomes like Income from House Property, Capital Gains andIncome from Other Sources then the advance tax is to be calculated by him and paythe 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: S. Advance Tax % of Tax No. 1st On or before 15th September >= 30% 2nd On or before 15th December >= 60% 3rd On or before 15th March Entire BalanceNote: If any amount is paid before 31st March, such payment is also considered asAdvance Tax for the period. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 61 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 62. ITR Forms and other related mattersFORMS TO BE USED: - The forms to be used for filing the return of income onwards are mentioned below:-ITR 1(SAHAJ) – Income from salary/pension: or Income from one houseproperty (excluding where loss brought forward from previous year): or Incomefrom other sources (excluding winnings from lottery and income from raceshorses).ITR 2 – Individual who cannot file SAHAJ (ITR 1) above and where the totalincome 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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 62 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 63. Exemption from filing of ITRPerson having total taxable income up to Rs 5 lakh Salary income from one employerincluding saving bank interest up to Rs 10,000/- is exempted from Income tax returnfor 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. 10Kd) 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. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 63 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 64. Form 26AS and other related mattersFORM 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 orthrough their bank account login mode.Belated Return: Section 139(4) provides that a return which has not been furnishedby the due date may still be furnished as a belated return before the expiry of one yearfrom the end of the assessment year or before the completion of assessment, whicheveris earlier. However, on any return of income that has not been filed by the end of therelevant 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 anyomission or wrong statement therein, he may file a revised return before the expiry ofone year from the end of the assessment year or completion of assessment whichever isearlier. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 64 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 65. Payment of Interest (i) INTEREST U/S 234A:Delay in filing of income tax return within due date (31st July) shall attract a simpleinterest @ 1% for every month or part thereof on the tax payable. If the TDScovered 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 theTDS 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 specifiedpercentage and/or not paid within due date, simple interest @ 1% per month orpart thereof is payable on tax determined on returned income as reduced byTDS/TCS/Amount of advance tax already paid or tax relief, if any, under Double TaxAvoidance Agreement with forgoing contribution.(iv) INTEREST U/S 234D:Interest @ 0.5% is levied under this Section when any refund is granted to theassessee u/s 143(1) and/or on regular assessment if it is found that either norefund is due or the amount already refunded exceeds the refund determined onregular assessment. The said interest is levied @ 0.5% on the whole or excessamount so refunded for every month or part thereof from the date. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 65 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 66. Communication with IT Dept.Intimation U/s 143(1): The Finance Act 2008 has reintroduced provisions in respect ofcorrecting arithmetical mistakes or internal inconsistencies at the stage of processing ofreturns. It has, thus been provided that, during the stage of processing, the total incomeshall be computed after making adjustments in respect of any arithmetical error in thereturn or any incorrect claim apparent from information in the return and if on suchcomputation, any tax or interest or refund is found due on adjustment of TDS or advancetax or self-assessment tax, then an intimation specifying the amount payable shall beprepared/generated or issued to the assessee. If any refund is found due, it is to be sentalong with the intimation to such effect. If no demand or no refund arises, theacknowledgement of the return is deemed to be treated as intimation. Such intimation isto 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 theassessee, considers that it is necessary to ensure that the assessee has not understatedhis income, he shall serve on the assessee a notice u/s 143(2) and, after obtaining suchinformation as he may require, complete the assessment (commonly referred as scrutinyassessment) u/s 143(3).Rectification of mistake u/s 154: If any order passed by an income tax authoritysuffers from a mistake apparent from record, the assessee may make an application forrectifying the same before the expiry of four years from the end of the financial year inwhich the above order was passed. The Finance Act 2001 has provided that where anapplication for rectification under this Section is made by the assessee on or after1.6.2001, the same shall have to be acted upon by the income tax authority within aperiod of six months from the end of the month in which the application is received. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 66 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 67. SALARY CASES - JURISDICTION OF HYDERABAD INCOME TAX OFFICESName of the I T  Income declared     Income declared       Particulars Building  > Rs. 20L  < Rs. 20L  Pensioners & Salaries Employees of Banks, AAYAKAR BHAVAN Insurance Corporations Including LIC, All Organizations/ Establishments/ Institutions/ Circle ‐ 12(1) Range ‐ 12 Hospitals & Medicals Institutions in Private Sectors Including Companies, Missionary Bodies & Private Educational Institutions. Pensioners & Salaries Employees of Central & AAYAKAR BHAVAN State Government Departments including Central & State Govt Undertakings and Local Authorities/ Circle ‐ 13(1) Range ‐ 13 Autonomous Bodies, All Agencies/ Bodies/ Organization like ICRISAT, etc., Income Tax Dept in AP State, Cantonment Board & Municipalities. SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 67 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 68. Residential status Residential status ResidentResident and Resident but Not Ordinarily Ordinarily Non Resident Resident Resident (NR) (ROR) (NOR) Residency is determined by number of days stay in India SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com68 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 69. Residential status …..Cont’d 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 Any one of None of the two the conditions conditions satisfied satisfied ROR / NOR NR* 60 days gets substituted for 182 days only in the year of departure for anIndian citizen proceeding abroad for the purposes of employment. In the yearof arrival to India for resuming employment, the threshold limit is 60 days. 69 SBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 70. 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 One or Both the none of conditions the satisfied condition s satisfied ROR NORGenerally, 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 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net
  • 71. Thank You SBS AND COMPANY - Chartered Accountants www.sbsandco.com; info@sbsandco.comM/s VELOX Corporate Services (P) Ltd., www.veloxcs.com; info@veloxcs.comSBS AND COMPANY - Chartered Accountants - www.sbsandco.com; info@sbsandco.com 71 Download From :www.simpletaxindia.net Download From :www.simpletaxindia.net

×