Income Tax

Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi – 110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
Semester: FIFTH Semester
Name of the Subject:
INCOME TAX
BASICS
UNIT 1

AGRICULTURAL INCOME
Sec.10(1) exempts Agricultural Income from Income-Tax. Bu virtue of Sec.2(1)a the
expression “Agricultural Income” means :
•Any Rent or Revenue derived from Land which is situated in India and is used for
agricultural purposes. [Sec. 2(1A)(a)]
•Any income derived from such land :
Use for Agricultural purposes ; or
Used for agricultural operations means- irrigating and harvesting , sowing, weeding,
digging, cutting etc. It involves employment of some human skill, labour and energy
to get some income from land
Condition-1 : Income derived from Land
Condition-2 : Land is used for Agricultural Purposes
Condition-3 : Land is situated in India

Person:
Income-tax is charged in respect of the total income of the previous year of
every person. Hence, it is important to know the definition of the word
person. As per section 2(31),Person includes:
• an Individual
• a Hindu Undivided Family (HUF)
• a Company
• a Firm
• an Association of Persons or a Body of Individuals (BOI) whether
incorporated or not
• a Local Authority
• every Artificial, Juridical person, not falling within any of the above
categories

Assessee:
As per Section 2(7) of the Act according to which assessee means a person by whom any
tax or any other sum of money (i.e. Interest, penalty etc.) Is payable under the Act and
includes:
A) Every person in respect of whom any proceeding under this Act has been taken for the
assessment of his income or assessment of fringe benefits or of the income of any other
person in respect of which he is assessable or to determine the loss sustained by him or by
such other person or to determine the amount of refund due to him or to such other
person.
B) Every person who is deemed to be an assessee under any provision of this Act.
C) Every person who is deemed to be an assessee in default under any provision of this
Act.

Assessment Year:
As per Section 2(9) “Assessment year” means the period of twelve months commencing on
1st April every year and ending on 31st March of the next year. Income of previous year of
an assessee is taxed during the following assessment year at the rates prescribed by the
relevant Finance Act
. Previous Year:
As per Section Section 3Income earned in a year is taxable in the next year. The year in
which income is earned is known as previous year.
From the assessment year 1989-90 onwards, all assessees are required to follow financial
year (i.e. April 1 to March 31) as previous year. The uniform previous year has to be followed
for all sources of income

RESIDENTIAL STATUS
Income tax is charged on total income earned by an Assessee during the previous year,
but at the rate applicable to the assessment year. It shall be determined on the basis of
the residential status of the Assessee. Sec.6 of the act divides the Assessee into 3
categories’
*Resident
*Non resident
*Not ordinary resident

INCOME
“ Income includes “ :
•Profit and Gains : For instance, Profit generated by a businessman is taxable as “Income”.
•Dividend : For instance, “Dividend” declared/paid by a company to a shareholders is
taxable as “ income” in the hands of shareholders .
•Voluntary contribution received by a Trust : In the hands of a Trust, income includes voluntary
contributions received by it.

Exempted Incomes
1. Agriculture Income [Section 10(1)]
2. Any sum received by a Co-parcener from Hindu Undivided Family (H.U.F.) [Section
10(2)]
3. Share of Income from the Firm [Section 10(2A)]
4. Interest paid to Non-Resident [Section 10(4)(i)]
5. Interest to Non-Resident on Non-Resident (External) Account [Section 10(4)(ii)]
6. Interest paid to a person of Indian Origin and who is Non-Resident [Section 10(4 B)]
7. Travel Concession to an Indian Citizen Employee [Section 10(5)]
8. Remuneration received by an individual who is not a citizen of India [Section 10(6)]

9. Tax paid by Government or Indian concern on Income of a Foreign Company [Section
10(6A), (6B), (6BB) and (6C)]
10. Perquisites and Allowances paid by Government to its Employees serving outside India
[Section 10(7)]
11. Employees of Foreign Countries working in India under Cooperative Technical Assistance
Programme [Section 10(8)]
12. Income of a Consultant [Section 10(8A)]
13. Income of Employees of Consultant [Section 10(8B)]
14. Income of any member of the family of individuals working in India under co-operative
technical assistance programmes [Section 10(9)]
15. Gratuity [Section 10(10)]
16. Commuted value of pension received [Section 10(I0A)]
17. Amount received as leave encashment on retirement [Section 10(10AA)]
18. Retrenchment compensation paid to workmen [Section 10(10B)]

INCOME TAX
INCOME FROM SALARY
UNIT 2

INCOME TAX ON SALARIES
1.The levy of income tax in India is at present governed by two acts.
a)The Income Tax Act,1961
b)The Finance Act passed each year by the
Parliament.
2.Income Tax is leviable annually for each Financial Year commencing on the 1st day of
April and ending on the 31st day March following.
3.Income tax on salaries is computed on annual basis and recovered as TDS on monthly
basis for the sake of our convenience.

CONT..
4.For the purpose of computing IT on salaries the term ‘salary’ includes following
elements:
a)Pay as defined in FR 9(21),leave salary and
advance of pay.
b)Bonus
c) Dearness allowance
d)Compensatory allowance
e)House rent allowance-subject to exemption
f) Value of Rent Free quarters
g) Fees retainable by the employees.
h) Honorarium

CONT..
i)Reimbursement of tuition fees.
j) Subsistence allowance
k) Interim relief
l) Overtime allowance
m) Government Contribution to the NPS.
5.Following items are not to be taken in to account for the purpose of computing IT on
salaries :
a)Sumptuary allowance and uniform allowance
b) Reimbursement of cost of medical
treatment subject to limits

CONT..
c) Value of LTC
b) cash equivalent of leave salary received at the
time of retirement.
c) TA granted for tour on duty and for transfer
d) Composite hill compensatory allowance
e) Border area /remote area /tribal area
difficult area /disturbed area allowance.
f) Conveyance allowance
g) CEA and hostel subsidy subject to limits
h) Any allowance granted for encouraging the
academic, research and other professional
pursuit
i) Transport allowance up to Rs.1600/- for orthopedically
handicapped persons and Rs.800/- for others (pm)
j) Any payment from GPF

CONT..
6. The salary income of a person is calculated on the total salary due to him / her as per
the guidelines provided above.
7. From the total income so arrived at(gross salary) the following deductions to the
extent permissible are to be allowed to get taxable salary
a) HRA exemption to the extent admissible
b) Accrued interest/interest paid on HBA ,
c) Donation to any recognized charitable trust/
fund such as Prime Minister’s National relief fund
d) Professional tax paid to local bodies.
e) For handicapped employees an amount of Rs.50000 or
Rs.1,00,000/- as the case may be

CONT..
8. With this taxable salary if the person is having any other income from other sources
as informed by him the same is to be added
9. From the taxable salary, following elements
of various forms of savings are to be
deducted to the extent admissible.
a)Subscription to PF,LIC,PLI policies
b) Subscription to any authorized pension
fund
c) Subscription to New pension Scheme
d) Subscription to any medical insurance
10. The total amount of savings is limited to a
maximum of Rs.1,50,000/.

PERQUISITES
The value of any benefit or amenity granted or provided free of cost or at
concessional rate.
Gratuity
• Death Cum Retirement Gratuity received by the Central Govt./State Govt. /Local
Authorities.
• Covered by gratuity Act, 1972 & Any other gratuity, least of the following is
exempted.
1. Actual amount received.
2. 15 days salary for each year of completed service
3. Rs.10,00,000/-.
EL Encashment
• Central Govt / State Govt Employees – Exempt
• Other Employees - Exemption will be determined with reference to the leave to
their credit at the time of retirement on superannuation, or otherwise, subject to
a maximum of ten months’ leave. This exemption will be further limited to the
maximum amount of Rs. 3,00,000.
1. .

CONT..
11.Thus the amount of taxable income is to arrived as follows.
a)Total salary income -- ________
b)less total of exempted
items( such as HRA exemption) -- ________(-)
c ) Gross Taxable income -- _______
d) less savings(limited to maximum) _________(-)
e) Net taxable salary ---------- __________

Deduction on House Rent allowance
House rent allowance granted to the employee is exempt u/s 10(13A) to the following
extent; Provided expenditure on rent is actually incurred, the amount of exemption
granted is the least of
•(1) HRA received
•(2) Rent paid Less 10% of salary
•(3) 40% of salary, (50% in case of Mumbai, Chennai, Kolkata & Delhi). Salary includes
bonus + Dearness allowance, where provided by terms of employment.

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC
or Other Insurer
This section provides deduction to an Individual for any amount paid or deposited in any
annuity plan of LIC or any other insurer for receiving pension from a fund referred to in
Section 10(23AAB).
In case the annuity is surrendered before the date of its maturity, the surrender value is
taxable in the year of receipt.
Deductions on Section 80C, 80CCC & 80CCD
Total Deduction under section 80C, 80CCC and 80CCD (1) together cannot exceed Rs
1,50,000 for the financial year (assessment year 2018-19). The limit for financial year 18-
19 is also Rs 1,50,000.

New Inclusion - 80 CCD(1B)
•A new section 80CCD(1B) has been introduced to provide for additional deduction for
amount contributed to NPS of up to Rs. 50,000.
•Therefore for financial year , Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80
CCD(1B) cannot exceed Rs 2,00,000.
From assessment year 2018-19, employer's contribution under section 80CCD(2) towards
NPS is outside the monetary ceiling mentioned above.
Deduction from gross total income: Section 80 TTA
•Deduction from gross total income with respect to any Income by way of Interest on
Savings account
•Deduction from gross total income of an individual or HUF, up to a maximum of Rs.
10,000/-, in respect of interest on deposits in savings account with a bank, co-operative
society or post office. Section 80TTA deduction is not available on interest income from
fixed deposits.

INCOME TAX
FULL PROCESS OF TAX
UNIT 3

WHAT IS A TAX?
Let us begin by understanding the meaning of tax. Tax is a fee charged by a government on
a product, income or activity.
There are two types of taxes . Direct taxes and indirect taxes.
If tax is levied directly on the income or wealth of a person, then it is a direct tax e.g.
income-tax, wealth tax.
If tax is levied on the price of a good or service, then it is called an indirect tax e.g. excise
duty, custom duty, service tax and sales tax or value added tax. In the case of indirect
taxes, the person paying the tax passes on the incidence to another person.

WHY ARE TAXES LEVIED?
The reason for levy of taxes is that they constitute the basic source of revenue to the
government. Revenue so raised is utilised for meeting the expenses of government like
defence, provision of education, health-care, infrastructure facilities like roads, dams etc

OVERVIEW OF INCOME-TAX LAW IN INDIA
Income-tax is the most significant direct tax. In this material, we would be introducing the
students to the Income-tax law in India. The income-tax law in India consists of the
following components.
Income Tax Act
Annual Finance Acts
Income Tax Rules
Circulars/Notifications
Legal decisions of Courts

Income-tax Act
The levy of income-tax in India is governed by the Income-tax Act, 1961. We shall
briefly refer to this as the Act.
This Act came into force on 1st April, 1962.
The Act contains 298 sections and XIV schedules.
These undergo change every year with additions and deletions brought about by the
Finance Act passed by Parliament.
In pursuance of the power given by the Income-tax Act, rules have been framed to
facilitate proper administration of the Income-tax Act.

Income-tax Rules
The administration of direct taxes is looked after by the Central Board of Direct
Taxes (CBDT).
The CBDT is empowered to make rules for carrying out the purposes of the Act.
For the proper administration of the Income-tax Act, the CBDT frames rules from
time to time. These rules are collectively called Income-tax Rules, 1962. It is
important to keep in mind that along with the Income-tax Act, these rules should
also be studied.

Circulars and Notifications
Circulars are issued by the CBDT from time to time to deal with certain specific problems
and to clarify doubts regarding the scope and meaning of the provisions.
These circulars are issued for the guidance of the officers and/or assessees.
The department is bound by the circulars. While such circulars are not binding the
assessees they can take advantage of beneficial circulars.

Case Laws
The study of case laws is an important and unavoidable part of the study of income-tax law.
It is not possible for Parliament to conceive and provide for all possible issues that may
arise in the implementation of any Act. Hence the judiciary will hear the disputes between
the assessees and the department and give decisions on various issues.
The Supreme Court is the Apex Court of the country and the law laid down by the Supreme
Court is the law of the land.
The decisions given by various High Courts will apply in the respective states in which such
High Courts have jurisdiction.

LEVY OF INCOME-TAX
Income-tax is a tax levied on the total income of the previous year of every person. A
person includes
An individual,
Hindu Undivided Family (HUF),
Association of Persons (AOP),
Body of Individuals (BOI),
A firm,
A company etc.

TOTAL INCOME AND TAX PAYABLE
Income-tax is levied on an assessee’s total income. Such total income has to be computed
as per the provisions contained in the Income-tax Act, 1961. Let us go step by step to
understand the procedure of computation of total income for the purpose of levy of
income-tax.
Step 1 Determination of residential status
Step 2 Classification of income under different heads
Step 3 Exclusion of income not chargeable to tax
Step 4 Computation of income under each head
Step 5 Clubbing of income of spouse, minor child etc.
Step 6 Set-off or carry forward and set-off of losses
Step 7 Computation of Gross Total Income.
Step 8 Deductions from Gross Total Income
Step 9 Total income
Step 10 Application of the rates of tax on the total income
Step 11 Surcharge
Step 12 Education cess and secondary and higher education cess
Step 13 Advance tax and tax deducted at source

Step 1 . Determination of residential status
The residential status of a person has to be determined to ascertain which income is to be
included in computing the total income. The residential statuses as per the Income-tax Act are
shown below .
Residential status under Income Tax Act !961
Resident Non-resident
Resident And
ordinary
resident
Resident but not-
ordinary resident
• In the case of an individual, the duration for which he is present in India determines his
residential status. Based on the time spent by him, he may be (a) resident and
ordinarily resident, (b) resident but not ordinarily resident, or (c) non-resident.
• The residential status of a person determines the taxability of the income. For e.g.,
income earned outside India will not be taxable in the hands of a non-resident but will
be taxable in case of a resident and ordinarily resident.

Step 2 . Classification of income under different heads
• These heads of income exhaust all possible types of income that can accrue to or be
received by the tax payer.
• Salary, pension earned is taxable under the head ‘Salaries’.
• Rental income is taxable under the head ‘Income from house property’.
• Income derived from carrying on any business or profession is taxable under the head
‘Profits and gains from business or profession’.
• Profit from sale of a capital asset (like land) is taxable under the head ‘Capital Gains’.
• The fifth head of income is the residuary head under which income taxable under the
Act, but not falling under the first four heads, will be taxed.
• The tax payer has to classify the income earned under the relevant head of incom

HEADS OF INCOME
A.—SALARIES.
B.— INCOME FROM HOUSE PROPERTY
C.— PROFITS AND GAINS OF BUSINESS OR PROFESSION.
D.—. CAPITAL GAINS
E.— INCOME FROM OTHER SOURCES

Step 3 - Exclusion of income not chargeable to tax
There are certain income which are wholly exempt from income-tax e.g. Agricultural income.
These income have to be excluded and will not form part of Gross Total Income.
Also, some incomes are partially exempt from income-tax e.g. House Rent Allowance,
Education Allowance. These incomes are excluded only to the extent of the limits specified in
the Act.
The balance income over and above the prescribed exemption limits would enter
computation of total income and have to be classified under the relevant head of income.

Step 4 - Computation of income under each head
Income is to be computed in accordance with the provisions governing a particular head
of income.
Under each head of income, there is a charging section which defines the scope of income
chargeable under that head.
There are deductions and allowances prescribed under each head of income. For example,
while calculating income from house property, municipal taxes and interest on loan are
allowed as deduction. Similarly, deductions and allowances are prescribed under other
heads of income. These deductions etc. have to be considered before arriving at the net
income chargeable under each h

Step 5 . Clubbing of income of spouse, minor child etc
In case of individuals, income-tax is levied on a slab system on the total income. The tax
system is progressive i.e. as the income increases, the applicable rate of tax increases.
Some taxpayers in the higher income bracket have a tendency to divert some portion of
their income to their spouse, minor child etc. to minimize their tax burden. In order to
prevent such tax avoidance, clubbing provisions have been incorporated in the Act,
under which income arising to certain persons (like spouse, minor child etc.) have to be
included in the income of the person who has diverted his income for the purpose of
computing tax liability.

Step 6 . Set-off or carry forward and set-off of losses
An assessee may have different sources of income under the same head of income. He
might have profit from one source and loss from the other. For instance, an assessee may
have profit from his textile business and loss from his printing business. This loss can be
set-off against the profits of textile business to arrive at the net income chargeable under the
head .Profits and gains of business or profession..
Similarly, an assessee can have loss under one head of income, say, Income from house
property and profits under another head of income, say, Profits and gains of business or
profession. There are provisions in the Income-tax Act for allowing inter-head adjustment
in certain cases.
Further, losses which cannot be set-off in the current year due to inadequacy of eligible
profits can be carried forward for set-off in the subsequent years as per the provisions
contained in the Act.

Step 7 . Computation of Gross Total Income.
The final figures of income or loss under each head of income, after allowing the
deductions, allowances and other adjustments, are then aggregated, after giving effect
to the provisions for clubbing of income and set-off and carry forward of losses, to arrive
at the gross total income

Step 8 . Deductions from Gross Total Income
Deduction in respect of certain payments Deduction in respect of certain
incomes
Other deductions
1. Life insurance premium paid
2. Contribution to provident fund/
Pension fund
3. Medical insurance premium paid
4. Payment of interest of loan taken for
higher education
5. Rent paid
6. Certain donations
7. Contribution to political parties
1. Profit and gains from undertaking
engaged in infrastructural
development
2. Profit and gains from undertaking
engaged in development of
SEZ
3. Certain income of co-operative
societies
4. Royalty income etc of authors
5. Royalty on patents
Deduction in case of
person with disability

Step 9 . Total income
The income arrived at, after claiming the above deductions from the Gross Total Income is
known as the Total Income.
Step 10 . Application of the rates of tax on the total income
The rates of tax for the different classes of assesses are prescribed by the Annual Finance
Act. The tax rates have to be applied on the total income to arrive at the income-tax
liability Step 11 . Surcharge
Surcharge is an additional tax payable over and above the income-tax. Surcharge is levied
as a percentage of income-tax .
Step 12 . Education cess and secondary and higher education
Cess on income-tax
The income-tax, as increased by the surcharge, is to be further increased by an additional
surcharge called education cess@2%. The Education cess on income-tax is for the purpose
of providing universalised quality basic education. This is payable by all assesses who are
liable to pay income-tax irrespective of their level of total income.
Further, .secondary and higher education cess on income-tax. @1% of income-tax plus
surcharge, if applicable, is leviable from A.Y.2008-09 to fulfill the commitment of the
Government to provide and finance secondary and higher education.

Step 13 - Advance tax and tax deducted at source
Although the tax liability of an assessee is determined only at the end of the year, tax is
required to be paid in advance in certain instalments on the basis of estimated income.
In certain cases, tax is required to be deducted at source from the income by the payer
at the rates prescribed in the Act. Such deduction should be made either at the time of
accrual or at the time of payment, as prescribed by the Act.
For example, in the case of salary income, the obligation of the employer to deduct tax
at source arises only at the time of payment of salary to the employees. Such tax
deducted at source has to be remitted to the credit of the Central Government through
any branch of the RBI, SBI or any authorized bank. If any tax is still due on the basis of
return of income, after adjusting advance tax and tax deducted at source, the assessee
has to pay such tax (called self-assessment tax) at the time of filing of the return.

RETURN OF INCOME
The Income-tax Act, contains provisions for filing of return of income.
Return of income is the format in which the assessee furnishes information as to his total
income and tax payable. The format for filing of returns by different assessees is notified
by the CBDT.
The particulars of income earned under different heads, gross total income, deductions
from gross total income, total income and tax payable by the assessee are required to be
furnished in a return of income.
In short, a return of income is the declaration of income by the assessee in the prescribed
format.
The Act has prescribed due dates for filing return of income in case of different assessees.
All companies and firms have to mandatorily file their return of income before the due
date.
Other persons have to file a return of income if their total income exceeds the basic
exemption limit.

INCOME TAX
DEDUCTION OF TAX AT SOURCE
UNIT 4

Introduction
To avoid cases of tax evasion, the Income-Tax Act has made provisions to collect tax at
source on accrual of income. Cases included in the scheme are, generally, those where
income can be computed at the time of accrual of income. Under this scheme, persons
responsible for making payment of income covered by the scheme are responsible to
deduct tax at source and deposit the same to the Government’s treasury within the
stipulated time. The recipient of income—though he gets only the net amount (after
deduction of tax at source)—is liable to tax on the gross amount and the amount
deducted at source is adjusted against his final tax liability. The details of the scheme of
tax deduction and collection at source are briefly discussed in this presentation. To
conclude one can say that the scheme of TDS is only payment of tax on adhoc basis by
the payer of income on behalf of recipient.

Steps for TDS

TAN
Every deductor is required to obtain a unique identification number called TAN (Tax
Deduction Account Number) which is a ten digit alpha numeric number. This number
has to be quoted by the deductor in every correspondence related to TDS

Tax Deduction & Collection Account Number
Every person deducting tax or collecting tax should obtain a tax deduction &
collection number
Such person should quote such number in every challan for payment u/s 200 or
206C(3), in every certificate furnished u/s 203 or u/s 206C(5)
In all the TDS returns delivered
In all other documents pertaining to such transaction as may be prescribed in
the interest of revenue

Payment covered under the scheme of TDS
Salary (Sec.192)
 Interest on Securities (Sec.193)
 Dividends (Sec.194)
 Interest other than Interest on Securities (Sec.194A)
 Winnings from Lotteries or crossword puzzles (Sec.194B)
 Winnings from Horse Races (Sec.194BB)
 Payments to Contractors and Sub-contractors (Sec.194C)
 Insurance Commission (Sec.194D)
 Payment to Non-resident sportsmen or sports association (Sec.194E)
 Payment in respect of NSC (Sec. 194EE)

Salary (Sec.192)
Who is the payer Employer
Who is the recipient Employee
Payment Covered Taxable Salary of the employee
At what time TDS to be deducted At the time of payment
Maximum amount which can be paid without
tax deduction
The amount of exemption limit
(i.e.,Rs.160000/190000/240000 for A.Y.
2011-12)
Rate at which tax to be deducted. As per Calculation
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
The employee can make application in Form
No.13 to the Assessing Officer to get the
certificate of lower tax deduction or no tax
deduction.

Interest on Securities (Sec. 193)
Who is the payer Payer of interest on securities
Who is the recipient A resident person holding securities
Payment covered Interest on securities
At what time TDS to be deducted. At the time of payment or at the time of
credit, whichever is earlier
tax deduction
Rs. 2500
Rate at which TDS to be deducted 10%
When the provisions are not applicable Interest on Central/State Government
securities
The recipient can make application to the
Assessing Officer in Form No. 13 or
declaration to the payer in Form 15G or 15H
as applicable

Dividends (Sec. 194)
Who is the payer Domestic company
Who is the recipient Resident shareholder
Payment Covered Deemed dividend under section 2(22)(e)
At what time TDS to be deducted At the time of payment
Maximum amount which can be paid
without tax deduction
Rs.2500
When the provisions are not applicable Dividend covered by section 115-O
Is it possible to get the payment without
tax deduction or with lower tax deduction
The recipient can make application to the
Assessing Officer in Form No. 13 or
declaration to the payer in Form 15G or
15H as applicable

INTEREST OTHER THAN INTEREST ON
SECURITIES (Sec 194A)
Who is the payer Any person paying interest other than interest
on securities
Who is the recipient A Resident person
Payment covered Interest other than interest on securities
At what time TDS to be deducted. At the time of payment or at the time of credit,
whichever is earlier
tax deduction
If payer is banking company, co-operative
engaged in banking business or Rs 10000/- if
Payer is any other person Rs 5000/-
Rate at which TDS to be deducted 10% if the recipient is resident non-corporate
assessee and 20% if the recipient is resident
corporate assessee
When the provisions are not applicable If the payee are Insurance companies or
financial institutions including co-operative
societies etc.
Declaration to the payer in Form 15G or 15H
as applicable

Winnings from Lotteries or Crossword
Puzzles
(Sec. 194B)
Who is the payer Any person paying winnings from
lotteries/crossword puzzles/card games/other
games
Who is the recipient Any Person
Payment covered Winnings from lotteries/crossword puzzles/card
games/other games
At what time TDS to be deducted. At the time of Payment
Maximum amount which can be paid without tax
deduction
If the amount payment is Rs. 10000/- or less
than Rs. 10000/-
Not Possible

Insurance Commission (Sec.194D)
Who is the payer Any person paying insurance commission.
Who is the recipient A resident person
Payment covered Insurance Commission
At what time TDS to be deducted. At the time of payment or at the time of credit
whichever is earlier
tax deduction
If the amount of payment is Rs. 20000/- or
less than Rs. 20000/-
Rate at which TDS to be deducted 10% if the recipient is resident non-corporate
assessee and
20% if the recipient is resident corporate
assessee
The recipient can make an application in
Form No. 13 to the Assessing Officer to get
the certificate of lower tax deduction or no
tax deduction.

Payments in respect of NSC (Sec.194EE)
Who is the payer Post Office
Who is the recipient Any Person
Payment covered Payment (Principal+Interest) out of National
Saving Scheme, 1987.
At what time TDS to be deducted. At the time of payment
Maximum amount which can be paid
without tax deduction
If the amount of payment is Rs.2500 or less
than Rs.2500
When the provisions are not applicable The payment is made to legal heirs of the
deceased depositor

Provisions for Filing Returns
Different Payments In case the person deducting tax is a
company or a Government department
or a person whose books are required
to be audited u/s. 44AB in the
immediately preceding year or in whose
case number of deductees in any of the
quarterly statements in the immediately
year is 20 or more
In case the person
deducting tax is
any other person
Time-limit for submission
of return by the person
deducting tax
Salary Form No. 24Q in Electronic format and
Form No. 27A
Form No. 24Q Within 15 days from the
end of each quarter (31st
May in case of last
quarter)
Payment (other than
salary) to a resident
Form No. 26Q in Electronic format and
Form No. 27A
Form No. 26Q Within 15 days from the
May in case of last
quarter)
Payment (other than
salary) to a non-
resident
Form No. 27Q in Electronic format and
Form No. 27A (quarterly)
Form No. 27Q
(quarterly)
Within 15 days from the
May in case of last
quarter)

Issue TDS Certificates Sec. 203
Sr. No. Form no Periodicity Cut off Date
1 16 For Salary Annual 31st May of following financial year
2 16A Other
than salary
Quarterly Within 15 days from due date of furnishing
the TDS statement under rule 31A

Dates for Payment of TDS
Deductor For MARCH For April to February
Government On or before 7th of next
month for salary
On the same day for other than salary & on
or before 7th of next month for salary
Other than
Government
On or before 30th April On or before 7th of next month
Special Cases 30th April Quarterly payment on or before 7th of the
month succeeding quarter

Furnishing of quarterly returns for payment of interest to residents
without Deducting Tax (Sec. 206A)
Banking company, Cooperative societies, & Public Companies shall furnish
quarterly return to department in respect of payments of Interest (other than
Interest on Securities) in any computer readable media.

Income Tax

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