andandPersonal Tax ManagementPersonal Tax Management

Responsibilities of Employers for Deduction and

deposit of TDS

Persons Responsible for TDS & their DutiesPersons Responsible for TDS & their Duties

It is the duty of the employer to deduct tax in accordance with section 192 of the I.Tax act. D.D.O.

Time Limit for Deposit of Tax (sec 200) : Tax deducted by Govt. should be paid to Central Govt. on the day of the Tax Deduction itself. For other than Govt. payment has to be made within one week of last date of the month.

Method of Payment : Through Book adjustment.

Penalty for late payment (Sec 201 (1A): Interest @ 1% Per Month or part of the month.

Penalty for T.D.S. not deducted or short deducted (Sec 271C): A sum equal to the amount of Tax not deducted.

Penalty for non deposit of TDS recovered (Sec. 276B): Punishable with rigorous imprisonment from 3 months to 7 years.

Filing of Quarterly e-tds Statement.Filing of Quarterly e-tds Statement.

These statement require mandatory quoting of TAN – of employer & PAN- of employees (sec 203A). Min. 95% of employees

Otherwise credit of Tax deducted can not be given.

Penalty (sec 272BB) for wrong quoting of PAN- Rs 10000/-

Failure to file e-tds return: penalty Rs 100 per Day.

Quarter Quarter Time limitTime limit

3030thth June June 1515thth July July

3030thth Sept. Sept. 1515thth Oct. Oct.

3131stst Dec. Dec. 1515thth Jan. Jan.

3131stst March. March. 1515thth June June

Annual Annual ReturnReturn

Not Not Required.Required.

Furnishing of TDS Certificates.Furnishing of TDS Certificates.Form- 16AAForm- 16AA To employees To employees

having salary having salary income below- income below- Rs 1,50,000/-Rs 1,50,000/-

Form- 16Form- 16 Other Other EmployeesEmployees

Form- 12BAForm- 12BA For taxable For taxable perquisite or perquisite or non monetary non monetary benefits.benefits.

Time limit- Time limit- within 30 days within 30 days from the end of from the end of F.Y. F.Y.

Penalty (sec. Penalty (sec. 272A) 272A) for non for non furnishing of furnishing of TDS cert. =Rs. TDS cert. =Rs. 100/- for every 100/- for every dayday

Tax Rates Applicable to Male Resident Tax Rates Applicable to Male Resident forfor

A.Y. 2008-09A.Y. 2008-09Nil

10% x ( TI – Rs. 1,10,000)

4000+ 20% ( TI- Rs 1,50,000)

24,000+30%( TI- Rs.2,50,000)

Up to Rs. 1,10,000.

Rs 1,10,000 to 1,50,000

Rs.1,50,001 to 2,50,000

Rs. 2,50,001 and above

A.Y. 2009-10A.Y. 2009-10Up to Rs.1,50,000.Rs 1,50,001 to 3,00,000Rs.3,00,001 to 5,00,000Rs. 5,00,001 and above

Nil 10% x ( TI – Rs. 1,50,000)15,000+ 20% ( TI- Rs 3,00,000)55,000+ 30% ( TI- Rs.5,00,000)

Tax Rates Applicable to Women Tax Rates Applicable to Women forfor

A.Y. 2008-09A.Y. 2008-09For Resident womanUp to Rs.1,45,000.Rs 1,45,001 to 1,50,000Rs.1,50,001 to 2,50,000Rs. 2,50,001 and above

Nil 10% x ( TI – Rs. 1,45,000)500+ 20% ( TI- Rs 1,50,000)20,500+30%(TI- Rs.2,50,000)

For Resident womanUp to Rs.1,80,000.Rs 1,80,001 to 3,00,000Rs.3,00,001 to 5,00,000Rs. 5,00,001 and above

Nil 10% x ( TI – Rs. 1,80,000)12,000+ 20% ( TI- Rs 3,00,000)52,000+30%(TI- Rs.5,00,000)

A.Y. 2009-10

Up to Rs.2,25,000.Rs 2,25,001 to 3,00,000Rs. 3,00,001 to 5,00,000Rs.5,00,001 and above

Nil 10% x ( TI – Rs. 2,25,000)75,00+ 20% ( TI- Rs 3,00,000) 47,500 + 30%(TI- Rs.5,00,000)

Education Cess @ 2% + Higher Education Cess @ 1% Surcharge @ 10% is applicable to Total Income above Rs. 10 lacs

Tax Rates Applicable to Senior Tax Rates Applicable to Senior CitizensCitizens

A.Y. 2008-09A.Y. 2008-09

A.Y. 2009-10

Up to Rs.1,95,000.Rs 1,95,001 to 2,50,000Rs. 2,50,001 and above

Nil 20% x ( TI – Rs. 1,95,000)11,000+ 30% ( TI- Rs 2,50,000)

Comparative Chart of Tax Due between A.Y. 2008-09 & 2009-10

AA Male Male ResidentResident

A.Y.A.Y.

2008-092008-09

A.Y.A.Y.

2009-102009-10

Total IncomeTotal Income 250000250000 250000250000

Tax DueTax Due 2472024720 1030010300

Total IncomeTotal Income 500000500000 500000500000

Tax DueTax Due 101970101970 5665056650

BB Resident Resident WomenWomen

A.Y.A.Y.

2008-092008-09

A.Y.A.Y.

2009-102009-10

Total IncomeTotal Income 250000250000 250000250000

Tax DueTax Due 2111521115 72107210

Total IncomeTotal Income 500000500000 500000500000

Tax DueTax Due 9836598365 5356053560

CC Sr CitizensSr Citizens

Total IncomeTotal Income 250000250000 250000250000

Tax DueTax Due 1133011330 25752575

Total IncomeTotal Income 500000500000 500000500000

Tax DueTax Due 8858088580 4892548925

Example For Assessment year 2009-2010: MaleExample For Assessment year 2009-2010: Male

ParticularsParticulars (Rs.)(Rs.) (Rs.)(Rs.) (Rs.) (Rs.) Gross Salary Income 2,00,000 5,00,000 10,00,000Gross Salary Income 2,00,000 5,00,000 10,00,000 (including Allowances)(including Allowances) Contribution to GPFContribution to GPF 20,000 50,000 1,00,000 20,000 50,000 1,00,000

Gross SalaryGross Salary 2,00,000 5,00,000 10,00,000 2,00,000 5,00,000 10,00,000 Less: DeductionLess: Deduction U/s 80CU/s 80C 20,000 20,000 50,000 50,000 1,00,000 1,00,000

Taxable Income 1,80,000 4,50,000Taxable Income 1,80,000 4,50,000 9,50,000 9,50,000 Tax thereonTax thereon 3,000 3,000 45,000 45,000 1,75,000 1,75,000 Add: SurchargeAdd: Surcharge NIL NIL NIL NIL NIL NIL Education Cess @2% 60 900 3,500Education Cess @2% 60 900 3,500Secondary & HigherSecondary & HigherEducation Cess @1% 30 450 1,750Education Cess @1% 30 450 1,750Total Tax PayableTotal Tax Payable 3,090 3,090 46,350 46,350 1,80,250 1,80,250

REVISED PAY COMMISSION AT GLANCE

Before VI th P.C.Before VI th P.C. After VI th P.C.After VI th P.C.

27 Pay Scales27 Pay Scales 6 Pay Scales6 Pay Scales

Basic = Pay+ D.P.Basic = Pay+ D.P. Basic = Pay + Grade Pay ( There is Basic = Pay + Grade Pay ( There is no D P now.)no D P now.)

Annual increment at fixed rates Annual increment at fixed rates provided in the grade.provided in the grade.

Increment on 1Increment on 1stst July @ 3%. July @ 3%.

HRA = 30%, 15%, 7.5% & 5% for HRA = 30%, 15%, 7.5% & 5% for A,B,C & Non categorised cities.A,B,C & Non categorised cities.

HRA = 30%, 20% & 10%HRA = 30%, 20% & 10%

On Basic + NPA for X,Y,Z, citiesOn Basic + NPA for X,Y,Z, cities

CCA = Rs 25 – 300 P.M. depending CCA = Rs 25 – 300 P.M. depending on place of postingon place of posting

No C.C.A.No C.C.A.

Transport Allowance = Rs75 – 800 Transport Allowance = Rs75 – 800 P.M. depending on place of postingP.M. depending on place of posting

Transport Allowance = Transport Allowance =

Grade PayGrade Pay AllowanceAllowance

Rs 10000 & above Rs 10000 & above Rs 7000+ D.ARs 7000+ D.A

Rs 5400 & above Rs 5400 & above Rs 3200+ D.ARs 3200+ D.A

Rs 4200,4600,4800 Rs 4200,4600,4800 Rs 1600+ D.ARs 1600+ D.A

Below Rs 4200 Below Rs 4200 Rs 600+ D.ARs 600+ D.A

HOW TO COMPUTE TAX UNDER THE HEAD SALARY

( A.Y. 2009-10)

ParticularsParticulars AmountAmount

Total Salary ReceivedTotal Salary Received xxxxxxxxxx

( Basic +D.P. +D.A. +H.R.A. +Transport all +C.C.A. +N.P.A. )( Basic +D.P. +D.A. +H.R.A. +Transport all +C.C.A. +N.P.A. )

Less: Exemption u/s 10Less: Exemption u/s 10

H.R.A.H.R.A. xxxxxx

Transport AllowanceTransport Allowance xxxxxxxx

Add: Arrears of Salary ReceivedAdd: Arrears of Salary Received xxxxxxxx

Less: Loss under the head house Property or other head.Less: Loss under the head house Property or other head. xxxx

Gross Total IncomeGross Total Income xxxxxxxxxx

Less: Rebate u/s 80C, 80D, 80DD, 80G, 80GG, 80E, 80ULess: Rebate u/s 80C, 80D, 80DD, 80G, 80GG, 80E, 80U xxxxxx

Less: Rebate u/s 89 (1) for Arrears.Less: Rebate u/s 89 (1) for Arrears. xxxxxx

Total Taxable IncomeTotal Taxable Income xxxxxx

Tax Due ( As per applicable rates)Tax Due ( As per applicable rates) XxxXxx

1) Basic Pay = Fully Taxable2) D.P. = Fully Taxable ( D.P. is not payable according to the Pay

Commission)3) D.A. = Fully Taxable 4) C.C.A. = Fully Taxable ( C.C.A. is not payable according to the Pay

Commission)5) N.P.A.( News Paper Allowance) = Fully Taxable6) H.R.A. ( House Rent Allowance). Least of the following is exempt u/s

10(13A) of Income Tax Act. a) Actual HRA Received b) Rent Paid less 10% of Basic Salary + D.A. c) 50% of Salary for Delhi, Mumbai, Calcutta & Chennai or 40% in case of

other cities. 7) Transport Allowance = Exemption of Rs 800/- P.M, balance is taxable

Taxability of various allowances for A.Y. 2009-10

NOTE (Section 10(14A): 70% of an allowance or Rs 6000 P.M. whichever is lower, is exempt for an employee working in any transport system, to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided such employee is not in receipt of daily allowance.

Medical Reimbursements to employeesMedical Reimbursements to employees

Employee/ Employee/

family family

membermember

Treatment in hospital Treatment in hospital maintained by employermaintained by employer

Not Not

taxabletaxable

Employee/Employee/

family family

membermember

Reimbursement of Reimbursement of expenditure actually expenditure actually incurred by the employee incurred by the employee on his medical treatment or on his medical treatment or treatment of any member of treatment of any member of his family.his family.

Not a perquisite if treatment is carried Not a perquisite if treatment is carried on (a) in any hospital maintained by the on (a) in any hospital maintained by the Government , local authority, or which Government , local authority, or which is approved by the Government for is approved by the Government for treatment of its employees or (b) in treatment of its employees or (b) in respect of prescribed diseases in any respect of prescribed diseases in any hospital approved by the Chief hospital approved by the Chief Commissioner in accordance with rule Commissioner in accordance with rule 3A.3A.

Employee Employee (not any (not any member of member of his family)his family)

Sum reimbursed by the Sum reimbursed by the employer in respect of employer in respect of medical treatment (other medical treatment (other than that mentioned in than that mentioned in items 1 and 2 above). items 1 and 2 above).

Exempt from tax up to a maximum limit Exempt from tax up to a maximum limit of Rs. 15,000 (Rs. 10,000 up to the of Rs. 15,000 (Rs. 10,000 up to the assessment year 1998-99). assessment year 1998-99).

ARREARS OF SALARY RECEIVED

As per the clarification issued by Ministry of Finance vide its office order F.No 1/1/200/-IC dated 30th August, 2008 Tax is payable on Arrears on receipt basis i.e. 40% of the aggregate arrears is taxable in A.Y. 2009-10.

Loss/ income under the head House Property

If a person have taken any Loan for construction/ purchase of residential house, he can claim the rebate on the amount of repayment of loan, as under:

a) For Principal Portion = Rebate u/s 80C up to maximum of Rs 1,00,000/- is available

b) For Interest Portion = A normal deduction of Rs. 30,000/- is allowed in respect of interest on borrowed capital .

Rs. 1,50,000/- is available if such loan has been taken on or after 1.4.1999 for construction or acquiring the residential house and the construction acquisition of the residential unit out of such loan has been completed with in three years from the end of the financial year in which capital was borrowed.

IMPORTANT POINTS TO REMEMBERIMPORTANT POINTS TO REMEMBER

• Normally, an employee can take the benefit of either H.R.A. (u/s 10 (13A) Least of the following is exempt: a) Actual HRA Received b) Rent Paid less 10% of Basic Salary + D.A. c) 50% of Salary for Delhi, Mumbai, Calcutta & Chennai or 40% in case of other cities.)

or

• Relief of interest on housing loan on self occupied house.

• An employee can take the benefit of both exemptions if the self occupied house is far from his work place.

• If the house purchased by the assessee is given on Rent, then (Rent received- 30% of Rent Received) is chargeable as tax under the head, Income from House Property and interest paid on borrowed capital is fully claimed as expenses irrespective of amount.

REBATE U/S 80 C

An employee is entitled to deduction for the whole of the amount paid or deposited in the current Financial Year in the following schemes, Subject to a limit of Rs 1,00,000/-.

A) Insurance Premium

B) Provident Fund, GIS, PPF, VPF.

C) Purchase of NSC and Interest accrued on previous NSC purchased.

D) Units of any Mutual Fund.

E) Principle portion of repayment of Housing Loan.

F) Tuition Fee.

G) Term Deposit for a fixed period of not less than five years.

Rebate u/s 80CCC Annuity Plan pension plan

An employee paid or deposited any amount for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension.

Maximum amount is Rs 1,00,000/- Rebate u/s 80CCD

Where an assessee employed by the Central Govt. on or after 01/01/2004, has in the previous year paid any amount in his account under schemes as notified by the Govt., he shall be allowed a deduction of the whole of the amount so paid subject to a ceiling of 10% of his Salary in the Previous Year. Same applies to Govt contribution. Total becomes 20%.

NOTE : The aggregate amount of deduction u/s 80C, 80CCC and 80CCD shall not exceed Rs 1,00,000/-.

Deduction u/s 80D Mediclaim Policy (over Rs. 1 lakh)

The deduction is allowed for making the payment to effect or keep in force an insurance on :-

The health of the assessee or on the health of wife or husband, dependant parents or dependent children of the assessee.

Maximum amount of Deduction is Rs15,000/- or Rs 20,000/- if the payment is made for insurance of Senior Citizen.

Deduction u/s 80DD Relief to Handicapped Dependent

Where an assessee, has, during the previous year:

a) Incurred any expenditure for the medical treatment ( including Nursing) training and rehabilitation of a dependant, being a person with disability or

b) Paid or deposit any amount under a scheme framed in this behalf by the life insurance corporation or any other insurer or Administrator or the specified Company for the maintenance of a dependant, being a person with disability.

The assessee shall be allowed a deduction of a sum of Rs 50,000/- from his gross total income.

The amount of deduction is a fixed deduction of RS 50,000/-, irrespective of the amount incurred or deposited under the scheme.

However, where such dependent is a person with severe disability (80% or more), an amount of Rs.75000 shall be allowed as deduction subject to the fulfilled.

Deduction u/s 80GG Those in Occupation of GOVT. QTRS

The assessee is entitled to deduction in respect of House Rent Paid by him for his own residence subject to following conditions:

a) The assessee has not been in receipt of any HRA.

b) The assessee does not own any residential accomodation himself, his spouse or minor child or where assessee is member if HUF, by such family at the place where he ordinarily resides or perform duties of his office.

c) The assessee files the declaration in Form-10BA.

Amount of deduction u/s 80GG is least of the following:1) Rent paid less 10% of his total Income.2) 25 % of Total Income.3) Rs 2,000/- Per Month.

Deduction under section 80U For handicapped employee

In computation the total income of an individual , being a resident, who, at any time during the previous year , is certified by the medical authority to be a person with disability, three shall be allowed a deduction of a sum of fifty thousand rupees.

However, where such individual is a person with severe disability (80% or more), a higher deduction of seventy-five thousand rupees shall be allowed.

Relief under section 89 (1) Tax on arrears

If an individual receives any portion of his salary in arrears or in advance , he can claim relief in terms of section 89 read with rule 21A .

The idea for this relief is to compensate the individual to pay tax at higher rates.

Manner of computation of relief

StepStep ComputationComputation ResultResult

1.1. Include additional salary/family pension in the total income of the year Include additional salary/family pension in the total income of the year of receipt and compute tax thereon.of receipt and compute tax thereon.

Tax (1)Tax (1)

2.2. Exclude additional salary/family pension in the total income of the Exclude additional salary/family pension in the total income of the year of receipt and compute tax thereon.year of receipt and compute tax thereon.

Tax (2)Tax (2)

3.3. Compute Tax (1) – Tax (2)Compute Tax (1) – Tax (2) AA

4.4. Include additional salary/family pension in the total income of the year Include additional salary/family pension in the total income of the year to which it relates and compute tax thereon.to which it relates and compute tax thereon.

Tax (3)Tax (3)

5.5. Exclude additional salary/family pension in total income of the year to Exclude additional salary/family pension in total income of the year to which it relates and compute tax thereon. which it relates and compute tax thereon.

Tax (4)Tax (4)

6.6. Tax (3) - Tax (4)Tax (3) - Tax (4) BB

7.7. Compute A-B (A should not be less than B)Compute A-B (A should not be less than B) Relief u/s Relief u/s 89 (1)89 (1)

Note : If additional salary / family pension relates to more than one previous year, salary should be spread over the previous years to which it pertains in the manner explained above.

Thank YouThank You