Income Tax Act 1961: Key Provisions of TDS, Tax Deductions and Filing Returns
1.
2. INCOME TAX ACT, 1961
TAX DEDUCTION AT SOURCE
-- S.K.Chakraborty, W.B.A.&A.S.,
Accounts Officer, A.T.I.
3. HEAD OF INCOME
1. INCOME FROM SALARY
2. INCOME FROM HOUSE PROPERTY
3. INCOME FROM BUSINESS/PROFESSION
4. CAPITAL GAINS
5. INCOME FROM OTHER SOURCES
4. ROLE OF THE D.D.O. --
• He is the “Person responsible for paying”.
• He acts as an “Assessing Officer” in
respect of the income derived from salary.
He can assess tax on any other income that
an assessee desires to declare.
5. TAX DEDUCTION ACCOUNT
NUMBER (TAN)
• Ten digit unique number allotted by the
Income Tax Department for the purpose of
identifying individual D.D.O.
• Application in FORM NO. 49B.
6. PERMANENT ACCOUNT
NUMBBER (PAN)
• Ten digit unique number allotted by the
Income Tax Department for the purpose of
identifying individual assessee.
• Application in Form No.49A.
7. RATES OF T.D.S.
• U/s 192 - At average rate on salary
payment.
• U/s 194C - @ 1.03% on payment on
advertising contract.
• - @ 2.06% on other
contractual payment.
• U/s 194LA - @10.30% on payment of
compensation on acquisition
of immovable properties.
8. TAXATION LIMIT
• On Salary - Total income exceeding
minimum taxation limit
(Rs.110,000 at present).
• On Contractual payment -
Single payment exceeding
Rs.20,000 or gross annual
payment exceeding
Rs.50,000.
• Annual compensation
payment exceeding
Rs.100,000.
9. NO T.D.S.
• The recipient can make an application in
Form No.13 to the “Assessing Officer” to
get a certificate of lower tax deduction or no
tax deduction.
• In case of salary payment however no such
application is necessary. The D.D.O. may
act directly on the basis of information
submitted to him by the individual payee.
10. REMEMBER
• The person responsible for payment can
make adjustment for any excess or shortfall
in the deduction of tax already made during
the financial year, in subsequent deductions
for that employee within the financial year
itself.
11. DEPOSIT OF T.D.S.
• Government Deductor - On the day of
deduction itself.
• Others - Within one week
of deduction.
12. CREDIT CERTIFICATES
• Salary - Form No.16 or 16AA – within
30th April.
• Other - Form No.16A – within one
month from the end of the month
in which credit is given or the
amount is paid.
13. RETURN
• All government deductors are
compulsorily required to file their
T.D.S. return on electronic media i.e.
e-tds returns.
14. • e-tds return is a TDS return prepared in
Form No.24Q or 26Q in electronic
media as per prescribed data structure
in either a floppy or a CD ROM
accompanied by a signed verification in
Form No.27A.
15. e-Filing Administrator
• The CBDT has appointed the Director
General of Income Tax (Systems) as e-
Filing Administrator for the purpose of the
Electronic Filing of Returns of Tax
Deducted at Source Scheme, 2003. It issues
the data format for the purpose of preparing
the e-tds returns.
16. e-TDS Intermediary
• CBDT has appointed National Securities
Depository Ltd., Mumbai as e-tds
intermediary. It has opened TIN-FC i.e. Tax
Information Network Fecilitation Centres
throughout India for acceptance of e-tds
returns.
17. CHARGES PAYABLE
Returns having
upto 100 deductees
records.
Rs.25/- plus taxes.
Returns having 101
to 1000 deductees
records.
Rs.150/- plus taxes.
Returns having
more than 1000
deductees records.
Rs.500/- plus taxes.
18. DUE DATE
Quarter Due Date
April to June July 15
July to September October 15
October to December January 15
January to March June 15
19. REMEMBER
• Where an employee has worked with a
deductor for part of the financial year only,
the deductor should recover t.d.s from his
salary and report it in the quarterly Form 24Q
of the respective quarter(s) up to the date of
employment with him.
20. • In Form 24Q4, the deductor should
include particulars of that employee
in Annex.II & III irrespective of the fact
that the employee was not under his
employment on the last day of the year
21. REMEMBER
• Where an employee joins
employment with a deductor
during the course of the financial
year, his t.d.s particulars should be
reported by the current deductor in
Form 24Q of the relevant quarter.
22. • In Form 24Q4, the deductor
should include in Annex.II &
III particulars of t.d.s of such
employee for the actual period
of posting under him.
24. TAX PLANNING
• Calculate salary income at current rate for
the whole financial year. Reckonable salary
months are March to February.
• Deduct the Tax on employment i.e.
Profession Tax paid.
• Deduct H.R.A. deductible, if any.
25. DEDUCTIBLE H.R.A.
• Least of the following three alternatives :-
1. Actual HRA received,
2. Rent paid in excess of 10% of salary,
3. 40% or 50% (in case of Kolkata) of salary.
- Amount arrived at is the Income from Salary.
26. INTEREST ON HB ADVANCE
• Income from House Property in respect of
the self occupied residential house is ‘NIL’.
But the interest on borrowed capital for
constructing or acquiring such property can
be shown as ‘LOSS’ under that head of a/c.
The DDO has the authority to set off that
loss to the extent of Rs.150000/- (maximum)
against the Income from Salary.
27. GROSS TOTAL INCOME
• It is the sum total of all the income
declared by the assessee e.g.
1. Income from salary after all allowable
deductions,
2. Income from other sources i.e. Bank Interest,
Interest from small savings etc.,
3. Income/loss from House Property.
28. DEDUCTIONS FROM GTI
1. Medical Insurance Premium (u/s 80D) –
maximum Rs.15000/-,
2. Expenditure for medical treatment
including nursing, training and
rehabilitation of a dependent being a
person with disability (u/s 80DD) –
maximum Rs.50000/-
29. 3. Donations u/s 80G,
4. Repayment of loan taken for higher
education u/s 80E,
5. Deduction for the person with disability
u/s 80U – maximum Rs.50000/-,
6. Deduction u/s 80C – maximum Rs.100000/-.
30. Deduction u/s 80C
• Gross total of all the subscription, deduction
and contribution to –
1. L.I.P./U.L.I.P./P.L.I./G.I.S.,
2. G.P.F./P.P.F.,
3. N.S.C./Interest on NSC being reinvestment,
4. Repayment of H.B.Advance,
5. Tuition Fee of two children,
6. Infrastructure Bond/E.L.S.S.,
7. Pension Annuity Plan.
31. TOTAL INCOME
• The Gross total income reduced by the
deductions is the TOTAL INCOME.
• Income Tax is calculated on this Income at
the rate prescribed for the relevant financial
year.
32. EDUCATION CESS
• The income tax calculated is to be increased
by another 3% towards Education Cess.
• Where rebate of income tax for arrear salary
received during the financial year is availed
of u/s 89(1), the Education Cess is be added
on the net income tax payable.
