Tax Deduction - DR Sajjad Wani JKAS
Tax Deduction - DR Sajjad Wani JKAS
Tax Deduction - DR Sajjad Wani JKAS
INCOME TAX
DEDUCTION FROM SALARIES
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Income Tax Deduction from Salaries
PREFACE
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Income Tax Deduction from Salaries
TABLE OF CONTENTS
3. Tax Rates under the Existing and the Concessional Tax Regime.
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Chapter 1:
ROLE OF A DRAWING & DISBURSING OFFICER IN
INCOME TAX CALCULATION & PAYMENT
The person responsible for paying tax (DDOs) shall obtain from
the employee evidence or proof or particulars of claims such as
House rent Allowance (where aggregate annual rent exceeds one lakh
rupees), Leave Travel Concession or Assistance, Deduction of interest
under the head ―Income from house property and deduction under
Chapter VI-A. DDOs shall also seek correct PAN or Aadhar number
of the employees; non-furnishing by employees will result in
deduction of TDS at higher rates.
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Chapter 2:
CONCESSIONAL TAX REGIME UNDER SECTION
115BAC
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Chapter 3:
THE TAX RATES UNDER THE EXISTING TAX
REGIME AND THE NEW TAX REGIME
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Chapter 4:
DEDUCTION OF INCOME TAX AT SOURCE FROM
SALARY
(b) any salary paid or allowed though not due or before it became due.
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Chapter 5:
EXEMPTIONS: INCOMES NOT TO BE INCLUDED
UNDER THE HEAD ‘SALARY’
Under the existing regime, any income falling within any of the
following clauses shall not be included in computing the income from
salaries:
7. Section 10 (14):
(i) Any special allowance granted to an employee to meet the
expenses wholly, necessarily and exclusively incurred in the
performance of his duties.
(ii) Any allowance granted to an employee either to meet his personal
expenses at the place of his posting or at the place he ordinarily
resides or to compensate him for the increased cost of living.
(iii) Any allowance granted for the period of journey in connection
with transfer, to meet the ordinary daily charges incurred on account
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Chapter 6:
DEDUCTIONS: INCOMES TO BE DEDUCTED FROM
THE HEAD ‘SALARY’
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Chapter 7:
DEDUCTIONS UNDER CHAPTER VI-A OF INCOME
TAX ACT
In computing the taxable income of the employee under the existing
tax regime, the following deductions under Chapter VI-A of the IT
Act are to be allowed from the gross total income:
In both cases, the employee shall furnish to the DDO the following:
1. A copy of the certificate issued by the medical authority as
defined in Rule 11A (1) in the prescribed form as per Rule 11A(2) of
the IT Rules.
2. New certificate in cases where the disability is temporary and
requires reassessment of its extent after a period stipulated in the
aforesaid certificate.
loan taken from any financial institution for the purpose of acquisition
of a residential house property if following conditions are met:-
(i) the loan has been sanctioned between 01.04.2019 and 31.03.2021;
(ii) the stamp duty value of residential house property does not exceed
Rs 45,00,000/-;
(iii) the employee does not own any residential house property on the
date of sanction of loan.
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Chapter 8:
CALCULATION OF INCOME TAX
Steps to be followed:
a) First compute the gross salary (excluding exemptions).
b) Allow deductions and compute the amount to arrive at Net salary
c) Add income from all other heads- like House property, etc to arrive
at the Gross Total Income.
However it may be remembered that no loss under any such head is
allowable by DDO other than loss under the Head “Income from
House property”.
d) Allow deductions mentioned from the figure arrived at (c) above
ensuring that the relevant conditions are satisfied. The aggregate of
the deductions subject to the threshold limits mentioned shall not
exceed the amount at (b) above and if it exceeds, it should be
restricted to that amount. This will be the amount of total income of
the employee on which income tax would be required to be deducted.
This income should be rounded off to the nearest multiple of ten
rupees.
e) Income-tax on such income shall be calculated at the rates given.
f) Rebate under Section 87A up to Rs 12,500/- to eligible persons
may be given.
g) The amount of tax as increased by the surcharge if applicable so
arrived at shall be increased by Health and Education Cess at the
rate of 4% to arrive at the total tax payable.
h) The amount of total tax payable as arrived should be deducted
every month in equal instalments. Any excess or deficit arising out of
any previous deduction can be adjusted by increasing or decreasing
the amount of subsequent deductions during the same financial year.
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