Circular
: No. 786, dated 7-2-2000.
1168. Clarification regarding taxability of
export commission payable to non-resident agents rendering services abroad
1. In
their Audit Report for 1997-98 [D.P. No. 79(I.T.)] the Comptroller &
Auditor General (C & A G) Raised an objection that the Assessing Officer in
computing the profits and gains of business or profession, in a case in Mumbai
charge, had wrongly allowed a deduction in respect of a payment to a
non-resident where tax had not been deducted at source. The nature of the
payment in this case was export commission and charges payable for services
rendered outside
2. The
deduction of tax at source under section 195 would arise if the payment of
commission to the non-resident agent is chargeable to tax in
Circular:
No. 787, dated 10-2-2000.
227. Guidelines regarding taxation of income of artists, entertainers, sportsmen, etc., from international/national/ local events
1. The Board had in the recent past, occasion to examine taxation issues concerning national and international events or shows for entertainment, sports, etc. Such shows are often characterised by substantial incomes being earned by organisers, sponsors, players, athletes and artists during very short periods of time. In many cases, the performers leave the country within a few hours of the show or event.
2. The events or shows normally involve an event manager, artists management or intermediate company. Their receipts may be of the following nature:
(i) Sponsorship money;
(ii) Gate money;
(iii) Advertisement revenue;
(iv)
(v) Rents from hiring out of space, etc.;
(vi) Rents from caterers.
In turn, the event manager, etc., may inter alia incur expenditure on guarantee money, prize money, rental for premises or equipment payments to labour contractor for decoration, salaries, royalties, fees for technical services, insurance premium for the event, etc.
Such receipts and payments may be liable to deduction of tax at source under various provisions of the Income-tax Act, 1961. In the case of residents, the applicability of the provisions of sections 194C, 194J and 194-I and in addition in the case of non-residents, the applicability of section 194E and section 195 should be examined.
3. In
the case of non-residents, in addition to the provisions of the Income-tax Act,
1961, the applicability of Double Taxation Avoidance Agreement (DTAA) should be
examined. The Income-tax Act, 1961 provides that in case of sportsmen or
artists participating in such events or shows, all income accruing or arising
or deemed to be accruing or arising, received or deemed to be received in
4. The
income earned by non-resident sportsmen, who are not citizens of
|
|
Taxable in |
|
U.S.A |
Taxable in |
|
|
Taxable in |
|
|
Taxable in |
|
|
Taxable in |
|
|
Taxable where the sports association/institutions is resident, as per article 22. |
|
|
Taxable in |
Similarly, in the case of other countries, the
Article on Other income etc. in the relevant DTAAs
would be applicable. In cases where such guarantee money is taxable in
5. In
connection with the taxability of income of the non-resident artists or
performer in
(i) If an artist performs in
(ii) Where the artists performs in India to promote sale of his records and no consideration is paid for this performance by the record company or anyone else; there will be no tax as he does not receive any income for performance in India.
(iii) Any
consideration received by artists or performer for the live performance or
simultaneous live telecast or broadcast (on radio, television, internet, etc.)
in
(iv) The consideration paid to the artists to acquire the copyrights of performance in India for subsequent sale abroad (of records, CDs, etc.) or the consideration paid to the artist for acquiring the license for broadcast or telecast overseas is not taxable in India due to exclusions provided in section 9(1)(vi) of the Income-tax Act;
(v) The consideration paid to the artist to acquire the copyrights of performance in India for subsequent sale in India (as records, CDs, etc.) or the consideration paid to the artist for acquiring the license for broadcast or telecast in India is taxable in India as per sections 9(1)(vi) of the Income-tax Act as royalties. Under the DTAA also, this would fall under the Royalties Article;
(vi) The
portion of endorsement fees (for launch or promotion of products, etc.) which
relates to artists performance in
In view of the above, the contracts of the artists
or performers with event managers, sponsors, etc., are of vital importance in
deciding the taxability of their income in
6. Wherever
the participants in such shows or events are not domiciled in
Circular: No. 788, dated 11-4-2000.
Section 80-IB l
Profits and gains from certain industrial undertakings other than
infrastructure development undertakings
570.
1.
Sub-section (4) of section 80-IB of the Income-tax Act, 1961 provides for
deduction in the case of an industrial undertaking in an industrially backward
State specified in the Eighth Schedule of the Income-tax Act, 1961. The Eighth
Schedule lists industrially backward States and
2. It has come to the notice of the Board that some of the field authorities are taking a restrictive view in interpreting section 80-IB(4) and are not allowing the benefit of the said section in respect of industrial undertakings situated in Union Territories specified in the Eighth Schedule in view of the fact that the said sub-section (4) mentions the word State only.
3. The matter has been considered by the Board and it is clarified that the word State in sub-section (4) of section 80-IB of the Income-tax Act, 1961 includes the Union Territories specified in the Eighth Schedule of the Income-tax Act, 1961.
Circular : No. 789, dated 13-4-2000.
734. Clarification regarding taxation of income
from dividends and capital gains under the Indo-Mauritius Double Tax Avoidance
Convention (DTAC)
1. The provisions of
the Indo-Mauritius DTAC of 1983 apply to residents of both
2. Prior to 1-6-1997,
dividends distributed by domestic companies were taxable in the hands of the
shareholder and tax was deductible at source under the Income-tax Act, 1961.
Under the DTAC, tax was deductible at source on the gross dividend paid out at
the rate of 5% or 15% depending upon the extent of shareholding of the
3. The test of residence mentioned above would also apply in respect of income from capital gains on sale of shares. Accordingly, FIIs, etc., which are resident in Mauritius would not be taxable in India on income from capital gains arising in India on sale of shares as per paragraph 4 of article 13.
Circular
: No. 790, dated 20-4-2000.
1169. Procedure for refund of tax deducted at source under section 195 to the person deducting the tax
1. The Board has issued Circular No. 769, dated 6-8-1998, laying down procedure for refund of tax deducted under section 195, in certain situations to the person deducting the tax at source from the payment to the non-resident. After reconsideration, Circular No. 769 is revoked with immediate effect and refund to the person deducting tax at source under section 195 shall be allowed in accordance with the provisions of this Circular.
2. The Board had received representations for approving grant of refund to the persons deducting tax at source under section 195 of the Income-tax Act, 1961. The cases referred to the Board mainly related to circumstances whereafter the deposit into Government account of tax deducted at source under section 195,
(a) the contract is cancelled and no remittance is made to the non-resident;
(b) the remittance is duly made to the non-resident, but the contract is cancelled. In such cases, the remitted amount may have been returned to the person responsible for deducting tax at source.
In the cases mentioned above, income does not accrue to the non-resident. The amount deducted as tax under section 195 and paid to credit of Government, therefore, belongs to the deductor. At present, a refund is given only, on a claim being made by the non-resident with whom the transaction was intended.
3. In the type of cases referred to in sub-paragraph (a) of paragraph 2, the non-resident not having received any payment would not apply for a refund. For cases covered by sub-paragraph (b) of paragraph 2, no claim may be made by the non-resident where he has no further dealings with the resident deductor of tax. This resident deductor is, therefore, put to genuine hardship as he would not be able to recover the amount deducted and deposited as tax.
4. The matter has been considered by the Board. In the type of cases referred to above, where no income has accrued to the non-resident due to cancellation of contract, the amount deposited to the credit of Government under section 195 cannot be said to be tax. It has been decided that this amount can be refunded, with prior approval of Chief Commissioner concerned to the person who deducted it from the payment to the non-resident under section 195.
5. The refund being made to the person who made the payment under section 195, the Assessing Officer may after giving intimation to the deductor, adjust it against any existing tax liability of the deductor under the Income-tax Act, 1961, Wealth-tax Act, 1957 or any other direct tax law. The balance amount, if any, should be refunded to the person who made such payment under section 195. A separate refund voucher to the extent of such liability under each of the direct taxes should be prepared by the Income-tax Officer or the Assessing Officer in favour of the Income-tax Department and sent to the bank along with the challan of the appropriate type. The amount adjusted and the balance, if any, refunded would be debitable under the sub-head Other refunds below the minor head Income-tax on Companiesmajor head 020Corporation Taxor below the minor head Income-tax other than Union Emoluments major head 021Taxes on Incomes other than Corporation Tax depending upon whether the payment was originally credited to the major head 020Corporation Tax or to the major head 021Taxes on Income other than Corporation Tax. Since the adjustment/refund of the amount paid would arise in relation to the deduction of tax at source, the recording of the particulars of adjustment/refund, should be done in the quarterly statement of TDS/annual return under the signature of the Income-tax Officer or the Assessing Officer at the end of the statement, i.e., below the signature of the person furnishing the statement.
6. Refund to the person making payment under section 195 is being allowed as income does not accrue to the non-resident. The amount paid into the Government account in such cases, is no longer tax. In view of this, no interest under section 244A is admissible on refunds to be granted in accordance with this Circular or on the refunds already granted in accordance with Circular No. 769.
7. A refund in terms of this Circular should be granted only after obtaining an undertaking that no certificate under section 203 of the Income-tax Act has been issued to the non-resident. In cases where such a certificate has been issued, the person making the refund claim under this Circular should either obtain it or should indemnify the Income-tax Department from any possible loss on account of any separate claim of refund for the same amount by the non-resident.
8. The refund as per this Circular is permitted only in respect of transactions with non-residents, which have either not materialised or have been cancelled subsequently. It, therefore, needs to be ensured by the Assessing Officer that they disallow corresponding transaction amount, if claimed as an expense in the case of person making refund claim.
9. It is hereby clarified that refund shall not be issued to the deductor of tax in the cases referred to in clause (i)(c) of paragraph 1 of Circular 769, dated 6-8-1998.
10. The limitation for making a claim of refund under this Circular shall be two years from the end of the financial year in which tax is deducted at source.
Circular : No. 791, dated 2-6-2000.
442.
Whether the date of transfer, as referred to in section 54E of the Act, is the
date of conversion of the capital asset into stock-in-trade or the date on
which the stock-in-trade is sold or otherwise transferred by the assessee
1. Section 2(47) of the Income-tax Act provides that any conversion of capital assets into stock-in-trade shall be regarded as a transfer. This transfer arises in the year in which such conversion takes place and, accordingly, capital gain would normally arise in that very year. However, section 45(2) of the Act postpones the assessment of such capital gains to the year in which the stock-in-trade is actually sold or otherwise transferred by the assessee.
2. In order to qualify for deduction under section 54E of the Act, the investment in specified assets was required to be made within six months from the date of transfer. A question had arisen as to whether the date of transfer, as referred to in section 54E of the Act, is the date of conversion of the capital asset into stock-in-trade or the date on which the stock-in-trade is sold or otherwise transferred by the assessee.
3. The Board had earlier issued a Circular No. 560 dated 18-5-1990, in consultation with Ministry of Law, clarifying that for purposes of section 54E of the Act, the date of transfer in such cases is the date on which the capital asset is converted by the assessee into stock-in-trade and not the date on which such stock-in-trade is sold or otherwise transferred by the assessee. Section 54E became inoperative for transfers made on or after 1-4-1992.
4. Sections 54EA, 54EB and 54EC also provide deduction from long-term capital gain if the sale proceeds/long-term capital gain is invested in specified assets within a period of 6 months from the date of transfer. It is not possible for an assessee to make the required investment under the aforesaid sections at the point of conversion of capital asset into stock-in-trade because the right to collect sales consideration in such cases arises only at the point of sale or transfer otherwise of stock-in-trade. The board has considered the matter afresh in consultation with the Ministry of Law and has decided that the period of 6 months for making investments in specified assets for the purpose of sections 54EA, 54EB and 54EC should be taken from the date such stock-in-trade is sold or otherwise transferred, in terms of section 45(2) of the Act.
Circular: No. 792, dated 21-6-2000.
839.
Validity of Returns of Income filed in old forms prescribed prior to 11-5-2000
1. In exercise of the powers conferred under section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes have made amendments to the Income-tax Rules, 1962, vide Notifications dated 11-5-2000, whereby certain changes have been effected in the Income Tax Return Form Nos. 2A, 2B, 2C, 2D(Saral), 3 and 3A as well as in Wealth tax and Expenditure tax return forms.
2. Since the new forms may not be widely available, certain assessees are filing returns of income in the forms as they existed before the aforesaid notifications dated 11-5-2000.
3. To remove genuine hardship in all such cases, Central Board of Direct Taxes hereby directs that returns of Income/Wealth/Expenditure filed during the current financial year, in the return forms, as they existed before notifications dated 11-5-2000, should not be treated as invalid merely because of the reason that the returns of Income/Wealth/Expenditure are not filed in the new notified forms.
4. To expedite allotment of PAN to all assessees, CCITs and DGITs should also give adequate publicity for assessees to take following steps while filing their returns of income:
(i) assessees who have been allotted PAN should quote the same at a proper place in the returns form;
(ii) assessees who have applied for PAN but have yet not received allotment should enclose copies of PAN application filed earlier, and its acknowledgment with the returns of income; and
(iii) assessees who have not applied for PAN should enclose properly filled in PAN application form and 2 passport size photographs with the returns of income.
Circular : No. 793, dated 23-6-2000.
150. Definition of Port as Infrastructure facility for the purpose of sections 10(23G) and 80-IA
1. The Board has received various representations seeking clarification whether structures at ports for storage, loading and unloading etc. will fall under the definition of port for the purposes of sections 10(23G) and 80-IA of the Income-tax Act, 1961.
2. The Board has considered the matter and it has been decided that such structures will be included in the definition of port for the purposes of sections 10(23G) and 80-IA of the Income-tax Act, 1961, if the following conditions are fulfilled:
(a) the
concerned port authority has issued a certificate that the said structures form
part of the port, and
(b) such
structures have been built under BOT or BOLT schemes and there is an agreement
that the same would be transferred to the said authority on the expiry of the
time stipulated in the agreement.
FINANCE ACT, 2000 - CIRCULAR No. 794,
DATED 9-8-2000
· Amendments to Income-tax Act
· Amendments to Finance No. 2 Act, 1998
· Amendments to Finance Act 1999
· Amendments to Wealth-tax Act
· Amendments to Interest-tax Act
Circular
: No. 795, dated 1-9-2000.
840.
Removal of difficulties to Kisan Credit Cardholders
by provisions of section 139(1)(v), first proviso
1. Under the existing provisions of clause (v) of the first proviso to sub-section (1) of section 139, a person not furnishing return under sub-section (1) and residing in specified areas and at any time during the previous year being the holder of a credit card, not being an add-on card, issued by any bank or institution, is required to furnish a return of his income during the previous year on or before the due date specified in the provision.
2. It has been represented to the Board that since agriculturists are not required to pay any tax on income arising from agricultural operations, the applicability of these provisions to the holders of Kisan Credit Card is likely to cause avoidable inconvenience to them.
3. The Board have
considered the matter. It is hereby clarified that, unlike the normal credit
card, the Kisan Credit Cards are issued based on the
land holding of the agriculturists. The provisions explained in clause (v) of
the first proviso to sub-section (1) of section 139 should, therefore, be made
applicable to holders of credit cards other than Kisan
Credit Cards.
Circular : No.
796, dated 10-10-2000.
937. Use of computerised challan
forms for deposit of tax deducted at source
1. At present printed challan forms are used by the assessees for the purpose of depositing tax deducted at source in accordance with the prescribed procedure under the Income-tax Act, 1961 and the Income-tax Rules, 1962. In this context, it has been brought to the notice of the Board that for depositing tax deducted at source hundreds of challan forms are required to be filled up by the persons responsible for deducting tax at source on behalf of their clients which is a cumbersome and time consuming exercise. Under these circumstances, a proposal has been put forth that computerised challan forms may be permitted to be used so as to increase the operational efficiency and to reduce the possibility of mistakes in filling in of the challan forms.
2. The aforesaid proposal has been considered by the Board and it has been decided to permit the use of computerised challan forms provided these are the exact replica of the one in use at present having same format, colour and may be similar in size.
Circular : No.
797, dated 10-10-2000.
188. Filing of returns regarding tax deduction at source/tax collection
at source on Computer Media
1. The Finance Act, 1997 has made provision w.e.f. 1-4-1997 for filing of a return on floppy diskette, magnetic cartridge tape, CD-ROM or any other computer readable Media. Pursuant to this, rule 37B was inserted in the Income-tax Rules, 1962 which, inter alia, states that the Computer Media must conform to the specifications given therein. Therefore, the Board hereby lays down the following guidelines for the persons responsible for deducting the tax under Chapter XVII-B and desirous of filing any return or statement referred to in rule 37 or 37A on a Computer Media.
Background
2.1 Under sub-sections (2) and (3) of section 206 of the Income-tax Act, 1961, read with rule 37B of the Income-tax Rules, 1962, a person responsible for deduction of tax at source, may file his TDS return on Computer Media in lieu of a paper return [as prescribed under section 206(1), read with rule 37 of the Income-tax Rules, 1962], subject to the conditions, limitations, rules and guidelines prescribed for the preparation, execution, filing and corrections thereof.
Computer
Media Test Return
3.1 With a view to ensure that the TDS return intended to be filed on Computer Media conforms to the specifications of the Income-tax Department, a person responsible for deduction of tax at source, who desires to file his TDS return(s) on Computer Media for the first time, should submit a Test Return, to the concerned Chief Commissioner of Income-tax/Commissioner of Income-tax, three months prior to the relevant due date for filing of the TDS Return.
3.2 While submitting the Test Return, the
person responsible for deduction of tax at source should ensure the following :
(a) (i) Form No. 27A, duly filled, in respect of the Test Return is enclosed;
(ii) Computer Media containing the Test Return is enclosed;
(iii) A certificate regarding clean and virus free Computer Media containing the Test Return is enclosed.
(b) The Computer Media containing the Test Return should be clearly marked as under :
For Test purposes only.
(c) The Test Return should be submitted on a separate Computer Media for each type of TDS Return.
(d) The person responsible for deduction of tax at source shall, to the extent possible, ensure that no data compression/backup software utility is used to copy the test data on Computer Media. In case data compression/backup software utility is used to copy the Test Return data on Computer Media, the person responsible for deduction of tax at source shall ensure that the corresponding software utility and procedure for its decompression/restoration is also submitted alongwith the Test Return.
3.3 The concerned Chief Commissioner of Income-tax/Commissioner of Income-tax, after ascertaining from his Computer Centre whether the Test Return submitted by the person responsible for deduction of tax at source on Computer Media conforms to the data structure specifications of the Income-tax Department, will inform the person responsible for deduction of tax at source, within 30 days of receiving the Test Return, whether there were any problems in processing the Test Return.
3.4 The Test Return on Computer Media, which can be read on the computer system of the Income-tax Department without a Job Abort and which has no errors, would generally constitute an acceptance to enable the person responsible for deduction of tax at source to file his TDS return(s) on Computer Media. If, however, a person responsible for deduction of tax at source submits a bad Computer Media, the concerned Chief Commissioner of Income-tax/Commissioner of Income-tax will inform the person responsible for deduction of tax at source of the fact. In such an eventuality, the person responsible for deduction of tax at source must supply a new Computer Media containing the complete Test Return within thirty (30) days of such intimation. If a person responsible for deduction of tax at source does not receive a communication for filing the TDS return on Computer Media within 45 days of receipt of Test Return on Computer Media by the Income-tax Department, the person responsible for deduction of tax at source must submit his return on paper media under section 206(1) of the Income-tax Act, 1961 read with rules 37 and 37A of the Income-tax Rules, 1962, to the authority as provided in rule 36A of the Income-tax Rules, 1962. Any delay in submission of the TDS return will not be condoned under any circumstances, in any case.
3.5 A fresh Test Return based on the amendments/changes in the Income-tax Laws/Rules/Procedures or in the Hardware/Software specifications as notified by the Income-tax Department shall be submitted by the person responsible for deduction of tax at source as per the procedure laid down in paras 3.1 to 3.4 above.
3.6 The submission of a Test Return or filing of a TDS Return for any year on Computer Media, does not in any way, prevent the person responsible for deduction of tax at source from filing his TDS Return for the same or any subsequent year on paper media.
Guidelines
for filing of TDS return on Computer Media
4.1 The TDS return on Computer Media, referred to in sub-sections (2) and (3) of section 206 of the Income-tax Act, 1961, should be furnished to the income-tax authority prescribed under rule 36A of the Income-tax Rules, 1962.
4.2 The TDS return filed on Computer Media should comprise Form No. 27A prescribed under rule 37B of the Income-tax Rules, 1962 and the attachment or attachments of specified Computer Media containing the data relating to the relevant TDS Return alongwith a certificate regarding clean and virus free Computer Media.
4.3 A TDS return, filed on Computer Media, shall contain all the information that is required to be furnished in a TDS return under section 206(1) of the Income-tax Act, 1961, read with rules 37 and 37A of the Income-tax Rules, 1962 on paper media.
4.4 As prescribed under rule 37B(4), while filing the TDS Return(s) on Computer Media, the person responsible for deduction of tax at source should ensure the following :
(i) The TDS return on Computer Media conforms to the specifications laid down in rule 37B(3) of the Income-tax Rules, 1962.
(ii) Form No. 27A, duly filled in, is enclosed.
(iii) In no case, more than one return is included on one unit of Computer Media. However, a single return, may spawn multiple units of the same Computer Media. If more than one unit of Computer Media is used in the case of a particular type of return, then each Computer Media should be serially numbered. For example, if a particular return spawns to 5 units of the same type of Computer Media, then the units should be numbered as 1 of 5, 2 of 5 and so on. Further, the package consisting of one or more units of Computer Media should be labelled as TDS Return on Computer Media for Form No. ............
(iv) If the data relating to a TDS return, submitted by the person responsible for deduction of tax at source, is copied using a data compression or backup software utility, the corresponding software utility and/or procedure for its decompression/restoration should also be supplied along with the Computer Media return.
(v) A certificate regarding clean and virus free Computer Media containing the data for TDS return should be submitted alongwith each TDS Return filed on Computer Media.
(vi) The Computer Media should be properly labelled clearly indicating the following :
(a) TAN
(b) Financial year
(c) The TDS Return Form No. e.g. Form 24, Form 25 etc.;
(d) The periodicity of Return i.e. Annual or 1st Half-Year or 2nd Half-year or 1st Quarter or 2nd Quarter or 3rd Quarter or 4th Quarter;
(e) Name of the person responsible for deduction of tax at source;
(f) Serial No. of each unit of Computer Media submitted e.g. 1 of 5, 2 of 5 and so on.
Note : The person responsible for deduction of tax at source is advised to have a separate set of sequence of numbers for each type of Return Form to avoid any confusion;
(g) The Directory Structure as per the Instructions for Creating Data File (Refer to para 9.1);
(h) Name of the
A Sample label for Computer Media is given in Annex XI.
(vii) The nomenclature of the TDS Return data file and the Directory Structure under which it will be stored on the Computer Media, should be in accordance with the Instructions for Creation of TDS Return on Computer Media.
(viii) The different types of records should be arranged according to hierarchy in the data file on Computer Media. The return record type, namely, RTN is highest in the hierarchy.
(ix) Each return record type, namely, RTN should be followed by return detail records depending upon the type of TDS Return Form.
(x) The record layout of each type of record should be in conformity with the respective record layouts as stated in the Instructions for Creation of TDS Return on Computer Media (Refer to para 9). The layouts of different records are given in Annexures I to X.
Important
Notice
4.5 If the TDS return submitted by the person responsible for deduction of tax at source on Computer Media does not conform to the specifications, as specified in para 9 of these Guidelines, of the Income-tax Department, and the person responsible for deduction of tax at source cannot produce a satisfactory replacement thereof, the person responsible for deduction of tax at source shall submit the paper copies of return.
Date
of filing of TDS Return on Computer Media
5. Any person filing the TDS return on Computer Media should deliver the return by the end of the month falling in the financial year immediately following the previous year, as specified in rules 37 and 37A of the Income-tax Rules, 1962, to the income-tax authority as provided in rule 36A of the Income-tax Rules, 1962.
Receipt
of the TDS Return on Computer Media
6. An acknowledgement of having received the TDS Return on Computer Media shall be issued by the income-tax authority prescribed under rule 36A of the Income-tax Rules, 1962 to receive such return.
While issuing the acknowledgement, the income-tax authority will allot the RRR No. and put on the magnetic media for further recognition.
Revision
of TDS Return filed on Computer Media
7. A person responsible for deduction of tax at source desirous of revising the original TDS Return filed on Computer Media, may file a revised TDS Return either on Computer Media, following the aforesaid procedure, or on paper media.
Returning
of Computer Media
8. The Computer Media on which the TDS Return(s) is/are filed, shall become the property of the Income-tax Department and will not be returned under any circumstances to the person filing such a return.
Creation
of TDS return on Computer Media
9. The necessary requirements for creation of TDS Return on Computer Media are given below :
9.1 The TDS Return data file should be created as a flat file using US 7 ASCII Mode.
9.2 Nomenclature of the Data File and the Directory Structure under which it will be stored.
The data file in the Computer Media should be stored under a Directory having the following directory structure :
NNNN\XXXX\NN\XXXXXXX.DAT
where
|
NNNN |
is the return year to which the TDS Return relates; |
|
|
|
|
XXXX |
is the return form number for which the return has been filed by the deductor; |
|
|
|
|
NN |
is the periodicity of the return i.e., |
|
|
|
|
|
In case of annual return |
- |
00; |
|
|
|
In case of half yearly return |
|
|
|
|
|
|
1st half yearly return |
- |
01 |
|
|
|
2nd half yearly return |
- |
02 |
|
|
In case of quarterly return |
|
|
|
|
|
|
1st quarterly return |
- |
03 |
|
|
|
2nd quarterly return |
- |
04 |
|
|
|
3rd quarterly return |
- |
05 |
|
|
|
4th quarterly return |
- |
06; |
|
|
and |
|
|
|
|
XXXXXXX.DAT |
is the data file name, where the first 7 characters i.e., XXXXXXX indicate the TAN without the location code and DAT is the file name extension. |
|||
For example, if the TAN is DELR00002C, return financial year is 1996-97, form number is 24, periodicity is 00 i.e, annual return, then the return year will be 1996, the name of the data file will be R00002C.DAT and the directory structure alongwith data file name will be.
1996\24\00\R00002C.DAT
The above directory structure along with data file name should also be mentioned on the label affixed on the Computer Media containing the TDS return.
Record
Types
9.3 The records should be arranged in the data file according to hierarchy as given below in Table I. For example, the return record of type RTN is the highest in hierarchy. Each return record should be followed by return detail records, payment detail records, F24 records and so on, depending on the TDS Return Form. The kind of record is identified by the record type, which is the first field in the record. Each new record should start from a new line for a new type of record.
I. The various record types with their descriptions, in hierarchical order, are given below :
Table
I
|
Record Type |
Description |
|
RTN |
Record type for Return Details (Applicable to all types of Forms) |
|
RTD |
Record type for annual TDS Return Details (Applicable to all types of Forms, except Form 24, Form 25 and Form 26) |
|
PMT |
Record type for Tax Deducted into Central Government account by persons other than Central and State Government (Applicable to all types of Forms) |
|
TDS |
Record type for TDS Transaction Details (Applicable to all types of Forms, except Form 24) |
|
NTD |
Record type for Transactions for which there is no TDS (Applicable to Forms 25, 26, 26A, 26-I and 26F) |
|
F24 |
Record type for F24 TDS Transactions (Applicable to Form 24 only) |
|
SEC |
Record type for storing security details (Applicable to Form 25 only) |
|
DIV |
Record type for Dividend Details (Applicable to Form 26 only) |
|
UNT |
Record type for Unit Details (Applicable to Form 26 only) |
|
F26 |
Record type for annual TDS Return for Dividend (Applicable to Form 26 only) |
II. The types of records, mentioned against each Form in the following table, will be applicable to a Form :
Table II
|
Form |
Record Type |
|
24 |
RTN, PMT, F24 |
|
25 |
RTN, PMT, NTD, SEC, TDS |
|
26 |
RTN, PMT, TDS, NTD, DIV, UNT, F26 |
|
26A |
RTN, RTD, PMT, TDS, NTD |
|
26B |
RTN, RTD, PMT, TDS |
|
26BB |
RTN, RTD, PMT, TDS |
|
26C |
RTN, RTD, PMT, TDS |
|
26D |
RTN, RTD, PMT, TDS |
|
26F |
RTN, RTD, PMT, TDS, NTD |
|
26G |
RTN, RTD, PMT, TDS |
|
26H |
RTN, RTD, PMT, TDS |
|
26-I |
RTN, RTD, PMT, TDS, NTD |
|
26J |
RTN, RTD, PMT, TDS |
|
26K |
RTN, RTD, PMT, TDS |
|
27 |
RTN, RTD, PMT, TDS |
III. The valid record types for each type of form are
as under :
Table III
|
Form |
Record Type |
|||||||||
|
Number |
RTN |
RTD |
PMT |
TDS |
NTD |
F24 |
SEC |
DIV |
UNT |
F26 |
|
24 |
|
|
|
|
|
|
|
|
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
|
26 |
|
|
|
|
|
|
|
|
|
|
|
26A |
|
|
|
|
|
|
|
|
|
|
|
26B |
|
|
|
|
|
|
|
|
|
|
|
26BB |
|
|
|
|
|
|
|
|
|
|
|
26C |
|
|
|
|
|
|
|
|
|
|
|
26D |
|
|
|
|
|
|
|
|
|
|
|
26F |
|
|
|
|
|
|
|
|
|
|
|
26G |
|
|
|
|
|
|
|
|
|
|
|
26H |
|
|
|
|
|
|
|
|
|
|
|
26-I |
|
|
|
|
|
|
|
|
|
|
|
26J |
|
|
|
|
|
|
|
|
|
|
|
26K |
|
|
|
|
|
|
|
|
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
Record
Layouts
9.4 The following should be kept in mind while preparing the TDS Return on Computer Media :
(i) The latest file and the data structures prescribed by the Income-tax Department should be used;
(ii) Separate Computer Media should be used for every return;
(iii) All alphanumeric fields should be left-justified and blank-filled;
(iv) All numeric fields should be Right-justified and zero-filled;
(v) Currency signs, -ve sign, commas or periods should not be used in numeric fields;
(vi) Decimals should be correctly aligned;
(vii) Date field should contain only valid date.
Conventions
used
9.5 Following conventions have been used :
(i) In the record layouts, the
* implies that the field is mandatoryimplies that the field is valid for the given form type
D implies that the field is not valid for the given form type
|
|
|
Column Ref. No.of the Form |
|
|
Form Number 24 |
|
|
1. |
Gross Total Income |
16 |
|
2. |
Total income-tax payable and surcharge thereon |
25 |
|
3. |
Total income-tax deducted at source |
28 |
|
4. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 25 |
|
|
1. |
Total amount paid to companies at prescribed rates |
6a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
6b(5) |
|
3. |
Total amount paid to companies at lower rates |
7a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
7b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
6a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
6b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
7a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
7b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26 |
|
|
1. |
Total amount paid to companies at prescribed rates |
8a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
8b(5) |
|
3. |
Total amount paid to companies at lower rates |
9a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
9b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
8a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
8b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
9a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
9b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26A |
|
|
1. |
Total amount paid to companies at prescribed rates |
6a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
6b(5) |
|
3. |
Total amount paid to companies at lower rates |
7a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
7b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
6a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
6b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
7a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
7b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26B |
|
|
1. |
Total amount paid to companies |
5a(10) |
|
2. |
Total amount paid to non-companies |
5b(10) |
|
3. |
Total amount of tax deducted from companies |
5a(12) |
|
4. |
Total amount of tax deducted from non-companies |
5b(12) |
|
5. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26BB |
|
|
1. |
Total amount paid to companies |
5a(6) |
|
2. |
Total amount paid to non-companies |
5b(6) |
|
3. |
Total amount of tax deducted from companies |
5a(8) |
|
4. |
Total amount of tax deducted from non-companies |
5b(8) |
|
5. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26C |
|
|
1. |
Total amount paid to companies at prescribed rates |
5a(7) |
|
2. |
Total amount paid to non-companies at prescribed rates |
5b(7) |
|
3. |
Total amount paid to companies at lower rates |
6a(7) |
|
4. |
Total amount paid to non-companies at lower rates |
6b(7) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
5a(9) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
5b(9) |
|
7. |
Total amount of tax deducted from companies at lower rates |
6a(10) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
6b(10) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26D |
|
|
1. |
Total amount paid to companies at prescribed rates |
5a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
5b(5) |
|
3. |
Total amount paid to companies at lower rates |
6a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
6b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
5a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
5b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
6a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
6b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26F |
|
|
1. |
Total amount paid to non-companies |
5(5) |
|
2. |
Total amount of tax deducted from non-companies |
5(7) |
|
3. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26G |
|
|
1. |
Total amount paid to companies |
5a(5) |
|
2. |
Total amount paid to non-companies |
5b(5) |
|
3. |
Total amount of tax deducted from companies |
5a(7) |
|
4. |
Total amount of tax deducted from non-companies |
5b(7) |
|
5. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26H |
|
|
1. |
Total amount paid to companies at prescribed rates |
5a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
5b(5) |
|
3. |
Total amount paid to companies at lower rates |
6a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
6b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
5a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
5b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
6a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
6b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26-I |
|
|
1. |
Total amount paid to companies |
5a(5) |
|
2. |
Total amount paid to non-companies |
5b(5) |
|
3. |
Total amount of tax deducted from companies |
5a(7) |
|
4. |
Total amount of tax deducted from non-companies |
5b(7) |
|
5. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26J |
|
|
1. |
Total amount paid to companies at prescribed rates |
5a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
5b(5) |
|
3. |
Total amount paid to companies at lower rates |
6a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
6b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
5a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
5b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
6a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
6b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 26K |
|
|
1. |
Total amount paid to companies at prescribed rates |
5a(5) |
|
2. |
Total amount paid to non-companies at prescribed rates |
5b(5) |
|
3. |
Total amount paid to companies at lower rates |
6a(5) |
|
4. |
Total amount paid to non-companies at lower rates |
6b(5) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
5a(7) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
5b(7) |
|
7. |
Total amount of tax deducted from companies at lower rates |
6a(8) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
6b(8) |
|
9. |
Total number of persons from whom tax was deducted |
|
|
|
Form Number 27 |
|
|
1. |
Total amount paid to companies at prescribed rates |
5a(7) |
|
2. |
Total amount paid to non-companies at prescribed rates |
5b(7) |
|
3. |
Total amount paid to companies at lower rates |
6a(7) |
|
4. |
Total amount paid to non-companies at lower rates |
6b(7) |
|
5. |
Total amount of tax deducted from companies at prescribed rates |
5a(8) |
|
6. |
Total amount of tax deducted from non-companies at prescribed rates |
5b(8) |
|
7. |
Total amount of tax deducted from companies at lower rates |
6a(9) |
|
8. |
Total amount of tax deducted from non-companies at lower rates |
6b(9) |
|
9. |
Total number of persons from whom tax was deducted |
|
b implies that corresponding to the field, the value to be inserted will be blank
0 implies that corresponding to the field, the value to be inserted will be zero
(ii) Number field should not contain any decimal character. It should be of fixed length. The value should be right justified and padded with zeros at the left. If no value is there, zeros of the desired length should be entered. For example, if the field requires to store a Number (say consisting of 10 digits), then in case if nothing has to be entered for this field then the value entered will be 0000000000. On the other hand, if the field requires the entry of decimal number then the decimal need not be stored. At the time of reading, the last two digits will be interpreted as precision of the number. For example, number (10, 2) will have 10 digits. At the time of reading, the last two digits will be interpreted as precision of the number i.e., 99.99 will be written as 0000009999. Similarly, 99 will be written as 0000009900.
(iii) Character field should be of fixed length, left justified and blank padded at the right. The null values should have blanks of desired length. For example, if the field has a maximum length of 10(ten) characters and the value to be stored in the field is ggggg then it should be stored in the format gggggbbbbb, where b represents the blank character. If the field has a maximum length of 10(ten) characters and the value to be stored is null then it should be stored as bbbbbbbbbb, where b represents the blank character.
(iv) Date field should be of eight characters. The format to be followed should be ddmmyyyy, where dd is the day, mm is the month and yyyy is the year. Thus, the date formats dd/mm/yyyy, dd-mm-yyyy, dd-mm-yy, dd/mm/yy, dd-mon-yyyy etc. (i.e., other than ddmmyyyy), are invalid. For example, if the date to be stored is 1st Jan., 1996, then it should be stored as 01011996 only.
9.6 Record Layouts for each Record Type
(i) The record layout for record type RTN is given in Annex I.
(ii) The record layout for record type RTD is given in Annex II.
(iii) The record layout for record type PMT is given in Annex III.
(iv) The record layout for record type TDS is given in Annex IV.
(v) The record layout for record type NTD is given in Annex V.
(vi) The record layout for record type F24 is given in Annex VI.
(vii) The record layout for record type SEC is given in Annex VII.
(viii) The record layout for record type DIV is given in Annex VIII.
(ix) The record layout for record type F26 is given in Annex IX.
(x) The record layout for record type UNT is given in Annex X.
Instructions
for furnishing the Control Total
9.7 The total in respect of the particular column of the relevant TDS Return Form, mentioned below, should be furnished under the head Control Total in Form 27A.
Change
of name, address etc. of the person responsible for deduction of tax at source
10. The person responsible for deduction of tax at source shall communicate in writing, any change in his name, address etc. in the format given in Annex XI.
11. The above guidelines will also apply for filing of returns regarding tax collection at source on Computer Media in respect of Form No. 27EA or Form No. 27EB or Form No. 27EC or Form No. 27ED as required by under the provisions of sub-section (5B) of section 206C of the Income-tax Act, 1961 read with rule 37EA of the Income-tax Rules, 1962.
Annexure I
Record
layout for record type RTN
Applicable to form(s) : 24, 25,
26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27
|
1. |
Positions 1-3 |
|
|
|
|
Field Name |
- |
|
|
|
Field Size |
- |
3 |
|
|
Field Type |
- |
Alphanumeric Characters |
|
|
Default value |
- |
RTN |
|
|
Valid value(s) |
- |
Not Applicable |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
2. |
Positions 4-7 |
|
|
|
|
Field Name |
- |
|
|
|
Field Size |
- |
4 |
|
|
Field Type |
- |
Alphanumeric Characters |
|
|
Default value |
- |
None |
|
|
Valid value(s) |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
3. |
Positions 8-11 |
|
|
|
|
Field Name |
- |
|
|
|
Field Size |
- |
4 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
None |
|
|
Valid value(s) |
- |
Valid year in the format |
|
|
|
|
YYYY |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
4. |
Positions 12-13 |
|
|
|
|
Field Name |
- |
|
|
|
Field Size |
- |
2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
None |
|
|
Valid value(s) |
- |
0 (Annual), 1 (1st half of financial year), 2 (2nd half of financial year), 3 (1st Quarter of financial year), 4 (2nd Quarter of financial year), 5 (3rd Quarter of financial year), 6 (4th Quarter of financial year) |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
5. |
Positions 14-21 |
|
|
|
|
Field Name |
- |
|
|
|
Field Size |
- |
8 |
|
|
Field Type |
- |
Date |
|
|
Default value |
- |
None |
|
|
Valid value(s) |
- |
Valid date |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
6. |
Positions 22-31 |
|
|
|
|
Field Name |
- |
|
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Alphanumeric Characters |
|
|
Default value |
- |
None |
|
|
Valid value(s) |
- |
Valid TAN |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
7. |
Positions 32-41 |
|
|
|
|
Field Name |
- |
Permanent Account Number (PAN) of the deductor filing the return |
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Alphanumeric Characters |
|
|
Default value |
- |
bbbbbbbbbb |
|
|
Valid value(s) |
- |
Valid PAN |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
8. |
Positions 42-51 |
|
|
|
|
Field Name |
- |
Amount on which no deduction of tax has been made in accordance with the provisions of section 196/194(3)(iii) |
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A |
|
9. |
Positions 52-59 |
|
|
|
|
Field Name |
- |
No. of persons to whom payment was made without the deduction of tax under the provision of section 196 |
|
|
Field Size |
- |
8 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
10. |
Positions 60-69 |
|
|
|
|
Field Name |
- |
Amount on which no deduction of tax has been made in accordance with the provisions of section 193(v) |
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
11. |
Positions 70-77 |
|
|
|
|
Field Name |
- |
No. of persons to whom payment was made without the deduction of tax under the provision of section 193(v) |
|
|
Field Size |
- |
8 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
12. |
Positions 78-87 |
|
|
|
|
Field Name |
- |
Amount on which no deduction of tax has been made in accordance with the provisions of section 197A(1A)/197(A) |
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26, 26A |
|
13. |
Positions 88-95 |
|
|
|
|
Field Name |
- |
No. of persons to whom payment was made without the deduction of tax under the provision of section 197A(1A) |
|
|
Field Size |
- |
8 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26A |
|
14. |
Positions 96-105 |
|
|
|
|
Field Name |
- |
Amount on which no deduction of tax has been made in accordance with the provisions of section 194 |
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26 |
|
15. |
Positions 106-113 |
|
|
|
|
Field Name |
- |
No. of persons to whom payment was made without the deduction of tax under the provision of section 194 |
|
|
Field Size |
- |
8 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26 |
|
16. |
Positions 114-123 |
|
|
|
|
Field Name |
- |
Amount on which no deduction was made in accordance with the provisions of section 194A(3)(i) |
|
|
Field Size |
- |
10 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26A |
|
17. |
Positions 124-131 |
|
|
|
|
Field Name |
- |
Total number of payees to whom interest was paid without the deduction of tax in accordance with the provisions of section 194A(3)(i) |
|
|
Field Size |
- |
8 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26A |
|
18. |
Positions 132-145 |
|
|
|
|
Field Name |
- |
Control total of tax deducted at source income-tax |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
24 |
|
19. |
Positions 146-157 |
|
|
|
|
Field name |
- |
Control total of tax deducted at source surcharge |
|
|
Field Size |
- |
12, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
24 |
|
20. |
Positions 158-172 |
|
|
|
|
Field Name |
- |
Control total of tax deducted at source |
|
|
Field Size |
- |
15, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
24 |
|
21. |
Positions 173-184 |
|
|
|
|
Field Name |
- |
Control total of paid-up amount of securi-ties on which interest is paid in case of companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
22. |
Positions 185-196 |
|
|
|
|
Field Name |
- |
Control total of paid-up amount of securities on which interest is paid in case of non-companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
23. |
Positions 197-208 |
|
|
|
|
Field Name |
- |
Control total of gross amount paid in case of companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
24. |
Positions 209-220 |
|
|
|
|
Field Name |
- |
Control total of gross amount paid in case of non-companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
25. |
Positions 221-234 |
|
|
|
|
Field Name |
- |
Control total of amount of tax deducted (income-tax and surcharge) in case of companies |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
26. |
Positions 235-248 |
|
|
|
|
Field Name |
- |
Control total of amount of tax deducted (income-tax and surcharge) in case of non-companies |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25 |
|
27. |
Positions 249-262 |
|
|
|
|
Field Name |
- |
Control total of amount of tax deducted and paid to the credit of Central Government |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
24, 25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
28. |
Positions 263-275 |
|
|
|
|
Field Name |
- |
Control total of amount of payment/ collection at the prescribed rates in case of companies |
|
|
Field Size |
- |
13 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26B, 26BB, 26C, 26D, 26G, 26H, 26-1, 26J, 26K, 27 |
|
29. |
Positions 276-289 |
|
|
|
|
Field Name |
- |
Control total of tax deducted/collected at source at the prescribed rates in case of companies |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26B, 26BB, 26C, 26D, 26G, 26H, 26-I, 26J, 26K, 27 |
|
30. |
Positions 290-302 |
|
|
|
|
Field Name |
- |
Control total amount of payment/ collection at the prescribed rates in case of non-companies |
|
|
Field Size |
- |
13 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
0000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-1, 26J, 26K, 27 |
|
31. |
Positions 303-316 |
|
|
|
|
Field Name |
- |
Control total of tax deducted/collected at source at the prescribed rates in case of non-companies |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H, 26-I, 26J, 26K, 27 |
|
32. |
Positions 317-328 |
|
|
|
|
Field Name |
- |
Control total amount of payments at lower rates in case of companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26C, 26D, 26H, 26J, 26K, 27 |
|
33. |
Positions 329-342 |
|
|
|
|
Field Name |
- |
Control total amount of tax deducted at source at lower rates in case of companies |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26C, 26D, 26H, 26J, 26K, 27 |
|
34. |
Positions 343-354 |
|
|
|
|
Field Name |
- |
Control total amount of payment at lower rates in case of non-companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26C, 26D, 26H, 26J, 26K, 27 |
|
35. |
Positions 355-368 |
|
|
|
|
Field Name |
- |
Control total amount of tax deducted at source at lower rates in case of non-companies |
|
|
Field Size |
- |
14, 2 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
00000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26C, 26D, 26H, 26J, 26K, 27 |
|
36. |
Positions 369-380 |
|
|
|
|
Field Name |
- |
Control total of amount paid without the deduction of tax under the provisions of section 197A(1A)/197A(1)/197A |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
25, 26, 26A, 26F |
|
37. |
Positions 381-392 |
|
|
|
|
Field Name |
- |
Control total of amount of commission or brokerage credited or paid during the year and on which no tax deducted in accordance with section 194H(2) in case of companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26-1 |
|
38. |
Positions 393-404 |
|
|
|
|
Field Name |
- |
Control total of amount of commission or brokerage credited or paid during the year and on which no tax deducted in accordance with section 194H(2) in case of persons other than companies |
|
|
Field Size |
- |
12 |
|
|
Field Type |
- |
Numeric Characters |
|
|
Default value |
- |
000000000000 |
|
|
Valid value(s) |
- |
Numeric Value |
|
|
Valid for Forms |
- |
26-I |
Annexure II
Record layout for record type RTD
Applicable to form(s) : 26A, 26B, 26BB, 26C, 26D, 26F, 26G, 26H,
26-I, 26J, 26K, 27
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Circular : No. 798, dated 10-10-2000. 963. Instructions for deduction of tax at
source from salaries during the financial year 2000-2001 1. Reference is invited to Circular No. 781, dated 5-11-1999 wherein the rates of deduction of income-tax from the payment of income under the head Salaries under section 192 of the Income-tax Act, 1961, during the financial year 1999-2000, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head Salaries during the financial year 2000-2001 and explains certain related provisions of the Income-tax Act. Finance Act, 2000 2. According to the Finance Act, 2000, income-tax is required to be deducted under section 192 of the Income-tax Act, 1961 from income chargeable under the head Salaries for the financial year 2000-2001 (i.e., assessment year 2001-2002) at the following rates : Rates of Income-tax
Surcharge on income-tax The amount of income-tax so computed shall be reduced by the amount of rebate of income-tax calculated under Chapter VIII-A and the income- tax so reduced shall be increased by a surcharge :
(a) @ 10% of such income-tax where the total income exceeds sixty thousand rupees but does not exceed one lakh fifty thousand rupees;
(b) at the rate of fifteen per cent of such income-tax where the total income exceeds one lakh fifty thousand rupees. However, the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on a total income of Rs. 60,000 by more than the amount of income that exceeds Rs. 60,000. Further having total income exceeding Rs. 1,50,000, the total amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on a total income of one lakh fifty thousand rupees by more than the amount of income that exceeds one lakh fifty thousand rupees. Surcharge is payable by both resident and non-resident assessees. Section 192 of the Income-tax Act, 1961 : Broad Scheme of tax deduction at source from
Salaries, etc. 3.1 Every person who is responsible for paying any income chargeable under the head Salaries shall deduct income-tax on the estimated income of the assessee under the head Salaries for the financial year 2000-2001. The income-tax is required to be calculated on the basis of the rates given above and shall be deducted on average at the time of each payment. No tax will, however, be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 50,000. (Some typical examples of computation of tax are given at Annexure I). 3.2 Sub-section (2) of section 192 deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the taxpayer may choose) from the aggregate salary of the employee who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head Salary due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer). 3.3 Under sub-section (2A) of section 192 where the assessee, being a Government servant or an employee in a company, cooperative 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 referred to in Para (3.1), 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 into account in making the deduction under Para (3.1) above. Explanation. For this purpose University means a university established or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be University for the purpose of the Act. 3.4 Sub-section (2B) of section 192 enables a taxpayer to furnish particulars of income under any head other than Salaries and of any tax deducted at source thereon, in the prescribed Form (No. 12C) vide Annexure II. Such income should not be a loss under any such head or other than the loss under the head Income from house property for the same financial year. The person responsible for making payment (DDO) shall take such other income and tax, if any, deducted at source from such income, and the loss, if any, under the head Income from house property into account for the purpose of computing tax deductible under section 192 of the Income-tax Act. It is, however, provided that this sub-section shall not in any case have the effect of reducing the tax deductible except where the loss under the head Income from house property has been taken into account, from income under the head Salaries below the amount that would be so deductible if the other income and the tax deducted thereon had not been taken into account. In other words, the DDO can taken into account the loss from house property only for working out the amount of total tax to be deducted. While taking into the account the loss from house property, the DDO shall ensure that the assessee files declaration in Form No. 12C and encloses therewith a computation of such loss from house property.
(i) For the purpose of computing loss under the head Income from house property in respect of a self-occupied residential house, the ceiling of deduction of interest on borrowed capital invested in the acquisition or construction of a self-occupied residential house has been enhanced to Rs. 1,00,000 w.e.f. assessment year 2001-2002. However, the deduction on account of interest on loans can be availed up to a limit of Rs. 1,00,000, only if such loan has been taken for constructing or acquiring the residential unit on or after 1-4-1999 and the construction or acquisition of the residential unit out of such loan has been completed before 1-4-2003.
(ii) The essential conditions necessary for availing higher deduction of interest are that the relevant loan must have been taken after 1-4-1999 and the acquisition or construction of residential unit must be completed before 1-4-2003. There is no stipulation regarding the date of commencement of construction. Consequently, the construction of the residential unit could have commenced before 1-4-1999 but, as long as its construction/acquisition is completed before 1-4-2003, the higher deduction would be available. Also, there is no stipulation regarding the construction/acquisition of the residential unit being entirely financed by loan taken after 1-4-1999. The loan taken prior to 1-4-1999 will carry deduction of interest up to Rs. 30,000 or Rs. 15,000 or Rs. 10,000 or Rs. 5,000, as the case may be, depending upon the year in which the loan was taken. 3.5 The provisions of sub-section (3) of section 192 allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in the subsequent deductions during that financial year itself. 3.6 The trustees of a recognised Provident Fund or any person authorized by the regulations of the fund to make payment of accumulated balances due to employees, shall, in cases where sub-rule (1) of rule 9 of Part A of the Fourth Schedule to the Act applies, at the time when accumulated balance due to an employee is paid, make there from the deduction specified in rule 10 of Part A of the Fourth Schedule. 3.7 Where any contribution made by an employer, including interest on such contributions, if any, in an approved Superannuation Fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the Fund to the extent provided in rule 6 of Part B of the Fourth Schedule to the Act. 3.8 For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the prescribed rate of exchange. Persons responsible for deducting tax and
their duties 4.1 Under clause (i) of section 204 of the Act, the persons responsible for paying for the purpose of section 192 means the employer himself or if the employer is a company, the company itself including the principal officer thereof. 4.2 The tax determined as per para 7 should be deducted from the salary under section 192 of the Act. 4.3 Section 197 enables the taxpayer to make an application in Form No. 13 to his Assessing Officer, and, if the Assessing Officer is satisfied that the total income of the taxpayer justifies the deduction of income-tax at any lower rate or no deduction of income-tax, he may issue an appropriate certificate to that effect which should be taken into account by the Drawing and Disbursing Officer while deducting tax at source. In the absence of such a certificate from the employee, the employer should deduct income-tax on the salary payable at the normal rates: Circular No. 147, dated 28-10-1974. 4.4 According to the provisions of section 200, any person deducting any sum in accordance with the provisions of section 192 shall pay, within the prescribed time, the sum so deducted to the credit of the Central Government in prescribed manner (vide rule 30 of the Income-tax Rules, 1962). In the case of deductions made by, or, on behalf of the Government, the payment has to be made on the day of the tax-deduction itself. In other cases, the payment has to be normally made within one week of the deduction. 4.5 If a person fails to deduct tax at source, or, after deducting, fails to pay the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201. Sub-section (1A) of section 201 lays down that such person shall be liable to pay simple interest at eighteen per cent per annum w.e.f. 1-6-1999 on the amount of such tax from the date on which such tax was deductible to the date on which tax is actually paid. Section 271C lays down that if any person fails to deduct tax at source, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted by him. Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time the tax deducted at source by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years and with fine. 4.6 According to the provisions of section 203, every person responsible for deducting tax at source is required to furnish a certificate to the payee to the effect that tax has been deducted and to specify therein the amount deducted and certain other particulars. This certificate, usually called the TDS certificate, has to be furnished within a period of one month from the end of the relevant financial year. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. In the case of employees receiving salary income including pension, the certificate has to be issued in Form No. 16 which has been prescribed under Boards Notification No. S.O. 148(E), dated 28-2-1991. A specimen of the certificate is enclosed as Annexure III. This certificate is to be issued on the tax-deductors own stationery within one month from the close of the financial year, i.e., by April 30 of every year. If he fails to issue the TDS certificate to the person concerned as required by section 203, he will be liable to pay, by way of penalty, under section 272A, a sum which shall be Rs. 100 for every day during which the failure continues. 4.7 According to the provisions of section 203A of the Income-tax Act, it is obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax-deduction Account No. (TAN) in the Challans, TDS certificates, returns, etc. Detailed instructions in this regard are available in this Departments Circular No. 497 [F. No. 275/118/87-IT(B), dated 9-10-1987]. If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of up to Rs. 5,000. 4.8 According to the provisions of section 206 of the Income-tax Act, read with rules 36A and 37 of the Income-tax Rules, the prescribed person in the case of every office of the Government, the principal officer in the case of every company, the prescribed person in the case of every local authority or other public body or association, every private employer and every other person responsible for deducting tax under section 192, from Salaries shall, after the end of each financial year, prepare and deliver by 31st May following the financial year, an annual return of deduction of tax to the designated/concerned Assessing Officer. This return has to be furnished in Form No. 24. It may be noted that a copy of each of the TDS certificates issued during the financial year should be enclosed with the annual return. If a person fails to furnish in due time the annual return, he shall be liable to pay by way of penalty under section 272A, a sum which shall be Rs. 100 for every day during which the failure continues, so, however, that this sum shall not exceed the amount of tax which was deductible at source. 4.9 A return filed on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media as may be specified by the Board shall be deemed to be a return for the purposes of section 206 and the Rules made thereunder, and shall be admissible in any proceeding thereunder, without further proof of production of the original, as evidence of any contents of the original or of any fact stated therein. While receiving such returns on computer media, necessary checks by scanning the documents filed on computer media will be carried out and the media may be duly authenticated by the Assessing Officer. 4.10 While making the payment of tax deducted at source to the credit of the Central Government, it may be ensured that the correct amount of income-tax is recorded in the relevant challan. It may also be ensured that the right type of challan is used. The relevant challan for making payment of tax deducted at source from salaries is No. 9 with Blue colour Band. Where the amount of tax deducted at source is credited to the Central Government through book adjustment, care should be taken to ensure that the correct amount of income-tax is reflected therein. 4.11 In the case of pensioners who receive their pension from a nationalised bank, the instructions contained in this circular shall apply in the same manner as they apply to salary income. The deductions from the amount of pension on account of standard deduction under section 16 and the tax rebate under section 88B (in the case of pensioners, resident in India, who are 65 years of age or more: refer Para 6) will be allowed by the concerned bank at the time of deduction of tax at source from the pension, before making payment to the concerned pensioner. As regards the tax rebate under section 88 on account of contribution to Life Insurance, Provident Fund, NSC, etc., if the pensioners furnish the relevant details to the banks, the tax rebate at the specified rate may also be allowed. Necessary instructions in this regard were issued by the Reserve Bank of India to the State Bank of India and other nationalised banks vide RBIs Pension Circular (Central Series) No. 7/C.D.R./1992 (Ref.CO: DGBA: GA(NBS) No. 60/GA.64 (11CVL)-91/92), dated the 27th April, 1992 and, these instructions should be followed by all the branches of the banks, which have been entrusted with the task of payment of pensions. Further all branches of the banks are bound under section 203 to issue certificate of tax deducted in Form No. 16 to the pensioners also vide CBDT Circular No. 761, dated 13-1-1998. 4.12 Where non-residents are deputed to work in India and taxes are borne by the employer, if any, refund becomes due to the employee after he has already left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it: Circular No. 707, dated 11-7-1995. 4.13 TDS certificates issued by the Central Government Departments which are making payments by book adjustment, should be accepted by the Assessing Officers if they indicate that credit has been effected to the Income-tax Department by book adjustment and the date of such adjustment is given therein. In such cases, the Assessing Officers may not insist on details like challan numbers, dates of payment into Government Account, etc., but they should in any case satisfy themselves regarding the genuineness of the certificates produced before them : Circular No. 747, dated 27-12-1996. 4.14 There is a specific procedure laid down for refund of payments made by the deductor in excess of taxes deducted at source, vide Circular No. 285, dated 21-10-1980. 4.15 In respect of non-residents, the salary paid for services entered in India shall be regarded as income earned in India, so as to specifically provide that any salary payable for rest period or leave period which is both preceded or succeeded by service in India and forms part of the service contract of employment will also be regarded as income earned in India. Estimation of income under the head Salaries 5.1 Income chargeable under the head Salaries : (1) The following income shall be chargeable to income-tax under the head Salaries :
(a) any salary due from an employer or a former employer to an assessee in the previous year, whether 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 to him; (c) 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. (2) For the removal of doubts, it is clarified that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due. Any salary, bonus, commission or remuneration by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as Salary. (3) Salary includes wages, fees, commissions, perquisites, profits in lieu of, or, in addition to salary, advance of salary, annuity or pension, gratuity, payments in respect of encashment of leave, etc. It also includes the annual accretion to the employees account in a recognised provident fund to the extent it is chargeable to tax under rule 6 of Part A of the Fourth Schedule of the Income-tax Act. Contributions made by the employer in excess of 12% of the salary of the employee, along with interest applicable, shall be included in the income of the assessee for the previous year. Other items included in salary, profits in lieu of salary and perquisites are described in section 17 of the Income-tax Act. The scope of term profit in lieu of salary has been amended so as not to include interest on contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy. For the purposes of this sub-clause, the expression Keyman insurance policy shall have the meaning assigned to it in clause (10D) of section 10. It may be noted that, since salary includes pensions, tax at source would have to be deducted from pension also, if otherwise called for. However, no tax is required to be deducted from the commuted portion of pension as explained in clause (3) of para 5.2 of this Circular. (4) The value of perquisites by way of free or concessional residential accommodation, or motor car provided by employers to their employees shall be determined under rule 3 of the Income-tax Rules, 1962. It is, however, clarified that the use of any vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work or from such office or place to his residence shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purpose of this rule. (5) Other benefits or amenities provided free of cost or at concessional rates to the employees like supply of gas, electric-energy, water for household consumption, educational facilities, etc., should also be taken into account for the purpose of computing the estimated salary income of the employees during the current financial year (Example 6 at Annexure I illustrates computation of some such perquisites). The valuation has to be done in accordance with rule 3 of the Income-tax Rules. (6) The value of any benefit or amenity granted or provided free of cost or at concessional rate by an employer to an employee (not being a director of the company or a person who has substantial interest in the company) is not regarded as perquisites received by the employee unless the employees income under the head Salary exclusive of the value of any benefit or amenity not provided for by way of monetary payment exceeds Rs. 24,000. However, no perquisite shall be charged to tax in the hands of the employees in respect of any benefit derived as a result of allotment of shares, debentures or warrants directly or indirectly under the Employees Stock Option Plan or Scheme. 5.2 Incomes not included in the head Salaries (Exemptions) : Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act : (1) The value of any travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding (a) on leave to any place in India, or (b) on retirement from service, or, after termination of service to any place in India is exempt under clause (5) of section 10 subject, however, to the conditions prescribed in rule 2B of the Income-tax Rules, 1962. For the purpose of this clause, family in relation to an individual means :
(i) the spouse and children of the individual; and (ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual. It may also be noted that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel. (2) Death-cum-retirement gratuity or any other gratuity which is exempt to the extent specified from inclusion in computing the total income under clause (10) of section 10. (3) Any payment in commutation of pension received under the Civil Pension (Commutation) Rules of the Central Government or under any similar scheme applicable to the members of the civil services of the Union, or holders of civil posts/posts connected with defence, under the Union, or civil posts under a State, or to the members of the All India Services/Defence Services, or, to the employees of a local authority or a corporation established by a Central, State or Provincial Act, is exempt under sub-clause (i) of clause (10A) of section 10. As regards payments in commutation of pension received under any scheme of any other employer, exemption will be governed by the provisions of sub-clause (ii) of clause (10A) of section 10. (4) Any payment received by an employee of the Central Government or a State Government, as cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement on superannuation or otherwise, is exempt under sub-clause (i) of clause (10AA) of section 10. In the case of other employees, this 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 specified by the Government of India Notification No. S.O. 1015(E), dated 27-11-1997 at Rs. 2,40,000. (5) Under section 10(10B), the retrenchment compensation received by a workman is exempt from income-tax subject to certain limits. The maximum amount of retrenchment compensation exempt is the sum calculated on the basis provided in section 25F(b) of the Industrial Disputes Act, 1947 or any amount not less than Rs. 50,000 as the Central Government may by notification specify in the Official Gazette, whichever is less. These limits shall not apply in the case where the compensation is paid under any scheme which is approved in this behalf by the Central Government, having regard to the need for extending special protection to the workmen in the undertaking to which the scheme applies and other relevant circumstances. (6) Under section 10(10C), as amended by the Finance Act, 2000, any payment received by an employee of the following bodies at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of public sector company, a scheme of voluntary separation, is exempted from income-tax to the extent that such amount does not exceed five lakh rupees :
(a) a public sector company; (b) any other company; (c) an authority established under a Central, State or Provincial Act; (d) a local authority; (e) a Cooperative Society; (f) a university established or incorporated or under a Central, State or Provincial Act, or, an institution declared to be a university under section 3 of the University Grants Commission Act, 1956; (g) any Indian Institute of Technology
within the meaning of clause (g) of section 3 of the (h) such Institute of Management as the Central Government may by Notification in the Official Gazette, specify in this behalf. It may also be noted that where this exemption has been allowed to any employee for any assessment year, it shall not be allowed to him for any other assessment year. (7) Any sum received under a life insurance policy, including the sum allotted by way of bonus on such policy other than any sum received under sub-section (3) of section 80DDA. (8) Any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies (or from any other provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette). (9) Under section 10(13A) of the Income-tax Act, 1961, any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from income-tax to the extent as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations. According to rule 2A of the Income-tax Rules, 1962, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be :
(a) the actual amount of such allowance received by an employer in respect of the relevant period; or (b) the actual expenditure incurred in payment of rent in excess of 1/10 of the salary due for the relevant period; or (c) where such accommodation is situated
in (d) where such accommodation is situated in any other place, 40% of the salary due to the employee for the relevant period, whichever is the least. For this purpose, Salary includes dearness allowance, i.e., if the terms of employment so provide, but excludes all other allowances and perquisites. It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the house rent allowance or any portion thereof from the total income of the employee. Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance up to Rs. 3,000 per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent. (10) Clause (14) of section 10 provides for exemption of the following allowances:
(i) Any special allowance or benefit granted to an employee to meet the expenses incurred in the performance of his duties as prescribed under rule 2BB subject to the extent to which such expenses are actually incurred for that purpose.
(ii) Any allowance granted to an assessee 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, which may be prescribed and to the extent as may be prescribed. However, the allowance referred to in (ii) above should not be in the nature of a personal allowance granted to the assessee to remunerate or compensate him for performing duties of a special nature relating to his office or employment unless such allowance is related to his place of posting or residence. The CBDT has prescribed guidelines for the purpose of clauses (i) and (ii) of section 10(14) vide Notification No. SO 617(E) [F. No. 142/9/95-TPL] dated 7-7-1995, which has been amended vide Notification No. SO 403(E), [F. No. 142/34/99-TPL] dated 24-4-2000. These Notifications may be referred to in Annexures IV and V. The transport allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of duty is exempt to the extent of Rs. 800 per month vide Notification S.O. No. 395(E), dated 13-5-1998 (Annexure VI). (11) Under section 10(15)(iv)(i) of the Income-tax Act, interest payable by the Government on deposits made by an employee of the Central Government or a State Government or a public sector company from out of his retirement benefits, in accordance with such scheme framed in this behalf by the Central Government and notified in the Official Gazette is exempt from income-tax. By Notification No. F.2/14/89-NS-II, dated 7-6-1989, as amended by Notification No. F.2/14/89-NS-II, dated 12-10-1989, the Central Government has notified a scheme called Deposit Scheme for Retiring Government Employees, 1989 for the purpose of the said clause. (12) Clause (18) of section 10 provides for exemption of any income by way of pension received by an individual or family pension received by any member of the family of an individual who has been in the service of the Central Government or State Government and has been awarded Param Vir Chakra or Maha Vir Chakra or Vir Chakra or such other gallantry awards as may be specifically notified by the Central Government. (13) Under section 17 of the Act, exemption from tax will also be available in respect of :
(a) the value of any medical treatment provided to an employee or any member of his family, in any hospital maintained by the employer; (b) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or of any member of his family :
(i) in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees;
(ii) in respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines :
Provided that in a case falling in sub-clause (ii), the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;
(c) premium paid by the employer in respect of medical insurance taken for his employees (under any scheme approved by the Central Government, or the reimbursement of insurance premium to the employees who take medical insurance for themselves or for their family members (under any scheme approved by the Central Government);
(d) reimbursement by the employer of the amount spent by an employee in obtaining medical treatment for himself or any member of his family from any doctor, not exceeding in the aggregate of Rs. 15,000 in an year;
(e) as
regards medical treatment abroad, the actual expenditure on stay and
treatment abroad of the employee or any member of his family; or, on stay
abroad of one attendant who accompanies the patient, in connection with such
treatment, will be excluded from perquisites to the extent permitted by the Reserve
Bank of 5.3 Deductions under section 16 of the Act : Under section 16 of the Income-tax Act, the standard deduction available is as under : in the case of an assessee whose income from salary, before allowing a deduction under this clause :
(a) does not exceed one lakh rupees, a deduction of a sum equal to thirty-three and one-third per cent of the salary or twenty-five thousand rupees, whichever is less :
(b) exceeds one lakh rupees but does not exceed five lakh rupees, a deduction of a sum of twenty thousand rupees.
No standard deduction is available to an assessee whose income from salary exceeds 5 lakh rupees.
Explanation.For the purposes of this clause, where salary is due from or paid or allowed by, more than one employer, the deduction under this clause shall be computed with reference to the aggregate salary due, paid or allowed to the assessee and shall in no case exceed the amount specified under this clause. A deduction is also allowed under clause (ii) of section 16 in respect of any allowance in the nature of an entertainment allowance specifically granted to the assessee by his employer subject to certain limits. In the case of a Government employee, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees whichever is less is allowable as deduction. In the case of a non-Government employee, deduction for entertainment allowance to the extent specified in sub-clause (b) of clause (ii) of section 16 will be given only if the allowance is regularly received by him from his present employer from a date prior to 1st April, 1955. The tax on employment within the meaning of clause (2) of article 276 of the Constitution of India leviable by, or, under any law, shall also be allowed as a deduction in computing the income under the head Salaries. 5.4 Deductions under Chapter VI-A of the Act : The following deductions under Chapter VI-A of the Act are available : (1) As per section 80CCC, where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India for receiving pension from the Fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessees account, if any) as does not exceed the amount of ten thousand rupees in the previous year. Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate with reference to such amount shall not be allowed under section 88. (2) Under section 80D, in the case of the following categories of persons, a deduction can be allowed for a sum not exceeding Rs. 10,000 per annum to the extent payment is made by cheque out of their income chargeable to tax to keep in force an insurance on the health of the categories of persons mentioned below provided that such insurance is in accordance with the scheme framed by the General Insurance Corporation of India as approved by the Central Government popularly known as Mediclaim. The categories of persons are : (a) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee, (b) where the assessee is a Hindu undivided family, any sum paid to effect or to keep in force an insurance on the health of any member of the family. However, the deduction can be allowed for a sum not exceeding Rs. 15,000 per annum, where the assessee or his wife or husband or dependent parents or any member of the family in case the assessee is a Hindu undivided family is a senior citizen which means an individual resident in India who is of the age of sixty-five years or more at any time during the relevant previous year. (3) Under section 80DD, an assessee, who is a resident in (a) incurred any expenditure for the medical treatment (including Nursing), training and rehabilitation of a handicapped dependent; or (b) paid or deposited any amount under a Scheme framed in this behalf by the Life Insurance Corporation or Unit Trust of India subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of handicapped dependentshall in accordance with and subject to the provisions of this section be allowed a deduction of a sum of forty thousand rupees of the previous year. The handicapped dependant means a person who is a relative of individual or a member of HUF and is not dependent on any person other than such individual of HUF for his support and maintenance and is suffering from permanent physical disability (including blindness or mental retardation, specified in rule 11A of the Income-tax Rules, 1962). The deduction will be available to individuals without any restriction with regard to their total income. The permanent physical disability or mental retardation of the dependent relative has to be certified by a physician, surgeon, occulist or a psychiatrist, as the case may be, working in a Government hospital, including a Departmental dispensary or a hospital maintained by a local authority as per Explanation given below section 80DD. It would be sufficient if the employee furnishes a medical certificate from a Government Hospital and a declaration in writing duly signed by the claimant certifying the actual amount of expenditure on account of medical treatment (including nursing) training and rehabilitation of the handicapped dependent and receipt/acknowledgements for the amount paid of deposited in the specified schemes of LIC or UTI. Therefore, DDOs may not insist production of vouchers/bills by the employees for having incurred expenditure on medical treatment of their handicapped dependents for allowing the deduction under section 80DD for the purpose of computing tax deductible at source. (Ref. CBDT Circular No. 775, dated 26-3-1999). (4) Under section 80DDB, where an assessee who is resident in (a) for himself or a dependent relative, in case the assessee is an individual, (b) for any member of a Hindu undivided family in the case the assessee is a member of a Hindu undivided family The assessee shall be allowed a deduction of a sum of forty thousand rupees in respect of that previous year in which such expenditure was actually incurred. However, an assessee or his dependent relative or any member of a Hindu undivided family of the assessee and who is a senior citizen the deduction of a sum of Rs. 60,000 shall be allowed in respect of that previous year in which such expenditure was actually incurred. Such deduction shall be reduced by the amount received, if any, under an insurance from an insurer on the medical treatment of the person referred to above. The listed diseases as per the relevant rule 11DD are specified neurological diseases, and 40% and above disability caused by cancer, full-blown, AIDS, Chronic Renal Failure, Nemophiha and Thalassaemia : Provided that no such deduction shall be allowed unless the assessee furnishes a certificate in such Form and from such authority as may be prescribed. The Form is Form 10-I, and the prescribed authority is any doctor registered with the Indian Medical Association and holding Post-graduate qualifications. For the purposes of this section, dependant means a person who is not dependant for his support or maintenance on any person other than the assessee. (5) Under section 80E of the Act, a deduction will be allowed in respect of repayment of loan taken for higher education, subject to the following conditions : (i) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of repayment of loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education, or interest on such loan :
Provided that the amount which may be so deducted shall not exceed forty thousand rupees. (ii) The deduction specified above shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the loan referred to above together with interest thereon is paid by the assessee in full, whichever is earlier. For this purpose
(a) approved charitable institution means an institution established for charitable purposes and notified by the Central Government under clause (2C) of section 10, or, an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) financial institution means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) higher education means full-time studies for any graduate or post-graduate course in engineering, medicine, management, or for post-graduate course in applied sciences or pure sciences, including mathematics and statistics;
(d) initial assessment year means the assessment year relevant to the previous year, in which the assessee starts repaying the loan or interest thereon. (6) No deduction should be allowed by the DDO from the salary income in respect of any donations made for charitable purposes. The tax relief on such donations as admissible under section 80G of the Act, will have to be claimed by the taxpayer in the return of income. However, DDOs., on due verification, may allow donations to the following bodies to the extent of 50% of the contribution :
i. Jawaharlal Nehru Memorial Fund, ii. The Prime Ministers Drought Relief Fund, iii. The National Childrens Fund, iv. The Indira Gandhi Memorial Trust, v. The Rajiv Gandhi Foundation, and to the following bodies to the extent of 100% of the contribution : i. National Defence Fund or the Prime Ministers National Relief Fund, ii. The Prime Ministers iii. The Africa (Public Contributions - iv. The National Foundation for Communal Harmony, v. Chief Ministers Earthquake Relief Fund, vi. National Blood Transfusion Council, vii. State Blood Transfusion Council, viii. Army Central Welfare Fund, ix. Indian Naval Benevolent Fund, x. Air Force Central Welfare Fund, xi. The Andhra Pradesh Chief Ministers Cyclone Relief Fund - 1996, xii. The National Illness Assistance Fund, xiii. The Chief Ministers Relief Fund or Leiutenant Governors Relief Fund, in respect of any State or Union Territory as the case may be, subject to certain conditions, xiv. The university or educational institution of national eminence approved by the prescribed authority, xv. The National Sports Fund to be set up by Central Government, xvi. The National Cultural Fund set up by the Central Government, xvii. The Fund for Technology Development and Application set up by the Central Government. (7) Under section 80GG of the Act, an assessee is entitled to a deduction in respect of a house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions : (a) the assessee has not been in receipt of any House Rent Allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act; (b) the assessee files the declaration in Form No. 10BA (Annexure-VII). (c) He will be entitled to a deduction in respect of house rent paid by him in excess of 10 per cent of his total income, subject to a ceiling of 25 per cent thereof or Rs. 2,000 per month, whichever is less, the total income for working out these percentages will be computed before making any deduction under section 80GG. (d) The assessee does not own :
(i) any residential accommodation himself or by his spouse or minor child or where such assessee is a member of a Hindu undivided family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or
(ii) at any other place, any residential accommodation being accommodation in the occupation of the assessee, the value of which is to be determined under sub-clause (i) of clause (a) or as the case may be, clause (b) of sub-section (2) of section 23. The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the assessee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of rent. (8) Section 80U allows deduction of forty thousand rupees in computing the total income of a resident individual, who at the end of the previous year, is suffering from a permanent physical disability (including blindness) or is subject to mental retardation, being a permanent physical disability, or mental retardation, specified in rule 11D of the Income-tax Rules, 1962, which is certified by a physician, surgeon, occulist or psychiatrist, as the case may be, working in a Government hospital and which has the effect of reducing considerably such individuals capacity for normal work or engaging in a gainful employment or occupation. The expression Government hospital will include a departmental dispensary or a hospital maintained by a local authority as specified in the Explanation given below section 80DD(4). Tax rebate 6. An assessee, being an individual, will be entitled to tax rebates under Chapter VIII of the Act as given below : (1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the wife or husband or any child of the individual. (2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (8) hereinbelow on the life of the individual, the wife or husband or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity. (3) Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his wife or children, insofar as the sum deducted does not exceed 1/5th of the salary. (4) Any contribution made :
(a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies;
(b) to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or a minor, or of whom he is a guardian;
(c) by an employee to a recognised provident fund;
(d) by an employee to an approved superannuation fund. It may be noted that contribution to any fund shall not include any sums in repayment of loan. (5) Any deposit in a ten-year account or a fifteen-year account under the Post Office Savings Bank (Cumulative Time Deposit) Rules, 1959, as amended from time to time, where such sums are deposited in an account standing in the name of an individual, or a minor, or of whom he is the guardian. (6) Any subscription : (a) to any such security of the Central Government or any such deposit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;
(b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by notification in the Official Gazette, specify in this behalf. Interest on NSC (VI issue) and NSC (VIII Issue) which is deemed investment also qualifies for the rebate. (7) Any sum paid as contribution in the case of an individual, for himself, spouse or any child,
(a) for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust of India; (b) for participation in any unit-linked insurance plan of the LIC Mutual Fund notified by the Central Government under clause (23D) of section 10. (8) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may by notification in the Official Gazette, specify. (9) Any subscription not exceeding rupees ten thousand, made to any units of any Mutual Fund, notified under clause (23D) of section 10, by the Unit Trust of India established under the Unit Trust of India Act, 1963, under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf. (10) Any contribution made by an individual to any pension fund set up by any Mutual Fund notified under clause (23D) of section 10, or, by the Unit Trust of India established under the Unit Trust of India Act, 1963, as the Central Government may, by notification in the Official Gazette, specify in this behalf. (11) Any subscription made to any such deposit scheme of, or any contribution made to any such pension fund set up by the National Housing Bank, as the Central Government may, by notification in the Official Gazette, specify in this behalf. (12) Any subscription made to any such deposit scheme (not being a scheme the interest on deposits whereunder qualifies for deduction under section 80L), as the Central Government may, by notification in the Official Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both. (13) Any
sums paid by an assessee for the purpose of
purchase or construction of a residential house property, the income from
which is chargeable to tax under the head Income from house property (or
which would, if it has not been used for the assessees own residence, have
been chargeable to tax under that head) where such payments are made towards
or by way of any instalment or part payment of the
amount due under any self-financing or other scheme of any development
authority, housing board, etc. The deduction will also be allowable in
respect of re-payment of loans borrowed by an assessee
from the Government, or any bank or Life Insurance Corporation, or National
Housing Bank, or certain other categories of institutions engaged in the
business of providing long-term finance for construction or purchase of
houses in (14) Subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Board on an application made by a public company or as subscription to any eligible issue of capital by any public finance institution in the prescribed form: Provided that where a deduction is claimed and allowed under this clause with reference to the cost of any equity shares or debentures, the cost of such shares or debentures shall not be taken into account for the purposes of sections 54EA and 54EB. Explanation : For the purposes of this clause
(i) eligible issue of capital means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the purposes of developing, maintaining and operating an infrastructure facility or for generating, or for generating and distributing, power or for providing telecommunication services whether basic or cellular;
(ii) infrastructure facility shall have the meaning assigned to it in clause (ca) of sub-section (12) of section 80-IA;
(iii) public company shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);
(iv) public financial institution shall have the meaning assigned to it in section 4A of the Companies Act, 1956. (15) Subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form: Provided that where a deduction is claimed and allowed under this clause with reference to the cost of units, the cost of such units shall not be taken into account for the purposes of sections 54EA and 54EB: Provided further that this clause shall apply if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company. Explanation : For the purposes of this clause - eligible issue of capital means an issue referred to in clause (i) of Explanation to clause (xvi) in sub-section (2) of section 88. (16) Subject to the limits mentioned for the various items, the entitlement to tax-rebate will be calculated at the rate of 20% of the total amount of the aforesaid savings etc., in the case of individuals, and at the rate of 25% in the case of an author or playwright or artist or musician or actor or sportsman (including an athlete) whose income derived from the exercise of his profession as such author/playwright/artist/musician/actor/sportsman/athlete constitutes twenty five per cent or more of his total income. The maximum tax rebate allowable will be Rs. 16,000 generally, and Rs. 17,500 in the case of authors, playwrights, artists, musicians, actors, sportsmen and athletes. There will, therefore, be an overall limit for savings which will qualify for tax rebate. In the case of individuals, the limit on investments made as above, excluding that mentioned in paras 14 & 15, will be Rs. 60,000 and in the case of authors, sportsmen etc. Rs. 70,000. (17) Under section 88B, an assessee being an individual resident in India, who is of the age of sixty five years or more at any time during the previous year shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter VIII) on his total income, with which he is chargeable for any assessment year, of an amount equal to one hundred per cent of such income-tax or an amount of fifteen thousand rupees, whichever is less. (18) Under section 88C, as inserted by Finance Act, 2000, an assessee, being a women resident in India, and below the age of sixty-five years, at any time during the previous year, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under Chapter VIII) her total income, with which she is chargeable for any assessment year, of an amount equal to hundred per cent, of such income-tax or an amount of five thousand rupees, whichever is less. (19) The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/subscriptions/payments made by the employees, by calling for such particulars/information as they deem necessary before allowing the aforesaid rebate. In case the DDO is not satisfied about the genuineness of the employees claim regarding any deposit/subscription/payment made by the employee, he should not allow the same, and the employee would be free to claim the rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer. Calculation of
income-tax to be deducted 7.1 Salary income for the purpose of section 192 shall be estimated as follows : (a) First compute the gross salary as mentioned in para 5.1 excluding all the incomes mentioned in para 5.2; (b) Allow deductions mentioned in para 5.3 from the figures arrived at (a); (c) Allow deductions mentioned in para 5.4 from the figure arrived at (b) ensuring that aggregate of the deductions mentioned in para 5.4 does not exceed the figure of (b) and if it exceeds, it should be restricted to that amount. This will be the amount of income under the head Salaries on which income-tax would be required to be deducted. This income should be rounded off to the nearest multiple of ten rupees. 7.2 Income-tax on the estimated income from salary as shown in para 7.1 shall be calculated at the rates given in para 2. 7.3 The amount of tax rebates computed under para 6 shall be deducted from the income-tax calculated according to para 7.2. However, it is to be ensured that the tax rebates given as per para 6 is limited to the income-tax calculated as per para 7.2. Further, tax payable so arrived at shall be increased by surcharge at the rate of ten per cent or fifteen per cent, as the case may be, to arrive at the total tax payable. 7.4 It is also to be noted that deductions under Chapter VIA of the Act as mentioned in para 5.4 and the tax rebates as mentioned in para 6 are allowed only if the investments or the payments have been made out of the income chargeable to tax during the financial year 2000-2001. 7.5 The amount of tax as arrived at para 7.3 should be deducted every month in equal instalments. The net amount of tax deductible should be rounded off to the nearest rupee. Miscellaneous 8.1 These instructions are not exhaustive and are issued only with a view to helping the employers to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962 and the Finance Act, 2000. 8.2 In case any assistance is required, the Assessing Officer/the local Public Relation Officer of the Income-tax Department may be contacted. 8.3 These instructions may please be brought to the notice of all disbursing officers and undertakings including those under the control of the Central/State Government. Circular: No. 798, dated 30-10-2001. Annexure I For assessment year 2001-2002 Example 1 Calculation of income-tax in the case of an employee having gross salary income (i) upto Rs. 1,00,000. (ii) More than Rs. 1,00,000 but less than Rs. 5,00,000 and (iii) Exceeding Rs. 5,00,000
Computation of
total income and tax payable thereon
Note : Where a person makes investment as per section 88(2)(i) to 88(2)(xv) the qualifying amount is Rs. 60,000. However whereas further investment of Rs. 20,000 and above is made in the shares, debentures or units of Mutual Funds as per section 88(2)(xvi) and (xvii) the qualifying amount becomes Rs. 80,000 and a maximum rebate of Rs. 16,000 (20% of 80,000) is allowable. Example 2 Calculation of
income-tax in the case of assessee having
handicapped dependent
Example 3 Calculation of
income-tax in the case of an employee where Medical Treatment expenditure was
borne by the employer
Computation of Tax
Notes : Repayment of house building advance is restricted to Rs. 20,000 under section 88(xv) of Income-tax Act, 1961. (ii) Total qualifying amount for rebate is Rs. 60,000 only (excluding the investments made in infrastructure bonds etc. as per section 88(2)(xvi) and (xvii) of the Act.) Example 4 Illustrating
calculation of house rent allowance under section 10(13A) in respect of
residential accommodation situated in
Computation of
Total Income and tax payable thereon for Assessment year 2001-2002
Note: Tax rebate is restricted to tax on total income. Example 5 Illustrating valuation of perquisites and calculation of
tax in the case of an employee of a private company, posted at
Computation of
total income and tax payable thereon
Example 6 Illustrating
valuation of perquisite and calculation of tax in the case of an employee of
a Private Company posted at Delhi and repaying Housing Building Loan
Computation of
total income and tax payable thereon
Example 7 Income-tax
calculation in the case of an employee whose Medical Treatment Expenditure
was borne by the employer
Rebate under Section 88
Note : *In respect of repayment of loans taken for the purchase or construction of a new residential house property the construction of which does not get completed by the end of the financial year 2001-2002, no tax rebate in respect of these items shall be admissible to the employees. Example 8 Income-tax calculation in the case of an employee who claims loss under the head Income from house property
Computation of taxable Income and Tax thereon
Example 9 Income-tax calculation in the case of a women assessee who is less than age of 65 years
Note : In the case of a women assessee who is of 65 years age or more, she will be entitled to rebate only under section 88B of the Act meant for senior citizens and not under section 88C of the Act. Annexure
II Form for sending particulars of income under section 192(2B) for the year ending 31st March, 2000 1. Name and address of the employee 2. Permanent Account Number 3. Residential status 4. Particulars of income under any head of income other than Salaries (not being a loss under any such head other than the loss under the head Income from house property) received in the financial year
5. Aggregate of sub-items (i) to (iv) of item 4 6. Tax deducted at source (enclose certificates) issued under section 203
Verification I,........................................, do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified to day, the.......... day of..... 2000.
Annexure
III Form No. 16 : Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source from income chargeable under the head Salaries - See [1991] 55 Taxman 21 (St.) Annexure
IV Rule 2BB : Insertion of rule 2BB - Income-tax (Eighth Amendment) Rules, 1995 - See [1995] 81 Taxman 18 (St.) Annexure V Rule 2BB : Amendment in the Table of sub-rule (2) of rule 2BB - Income-tax (Third Amendment) Rules, 2000 - See [2000] 109 Taxman 421 (St.) Annexure
VI Rule 2BB : Amendment in rule 2BB - Income-tax (Seventh Amendment) Rules, 1998 - See [1998] 98 Taxman 31 (St.) Annexure
VII Form No. 10BA : Declaration to be filed by the assessee claiming deduction under section 80GG - Income-tax (Nineteenth Amendment) Rules, 1998 - See [1998] 100 Taxman 110 (St.)
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