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and Personal Tax Management

Responsibilities of Employers for Deduction and deposit of TDS. and Personal Tax Management. Persons Responsible for TDS & their Duties It is the duty of the employer to deduct tax in accordance with section 192 of the I.Tax act. D.D.O.

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and Personal Tax Management

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  1. Responsibilities of Employers for Deduction and deposit of TDS and Personal Tax Management

  2. Persons Responsible for TDS & their Duties It is the duty of the employer to deduct tax in accordance with section 192 of the I.Tax act. D.D.O. Time Limit for Deposit of Tax (sec 200) : Tax deducted by Govt. should be paid to Central Govt. on the day of the Tax Deduction itself. For other than Govt. payment has to be made within one week of last date of the month. Method of Payment : Through Book adjustment. Penalty for late payment (Sec 201 (1A): Interest @ 1% Per Month or part of the month. Penalty for T.D.S. not deducted or short deducted (Sec 271C): A sum equal to the amount of Tax not deducted. Penalty for non deposit of TDS recovered (Sec. 276B): Punishable with rigorous imprisonment from 3 months to 7 years.

  3. Filing of Quarterly e-tds Statement. These statement require mandatory quoting of TAN – of employer & PAN- of employees (sec 203A). Min. 95% of employees Otherwise credit of Tax deducted can not be given. Penalty (sec 272BB) for wrong quoting of PAN- Rs 10000/- Failure to file e-tds return: penalty Rs 100 per Day.

  4. Furnishing of TDS Certificates. Time limit- within 30 days from the end of F.Y. Penalty (sec. 272A) for non furnishing of TDS cert. =Rs. 100/- for every day

  5. Up to Rs. 1,10,000. Rs 1,10,000 to 1,50,000 Rs.1,50,001 to 2,50,000 Rs. 2,50,001 and above Nil 10% x ( TI – Rs. 1,10,000) 4000+ 20% ( TI- Rs 1,50,000) 24,000+30%( TI- Rs.2,50,000) Tax Rates Applicable to Male Resident for A.Y. 2008-09 A.Y. 2009-10 Up to Rs.1,50,000. Rs 1,50,001 to 3,00,000 Rs.3,00,001 to 5,00,000 Rs. 5,00,001 and above Nil 10% x ( TI – Rs. 1,50,000) 15,000+ 20% ( TI- Rs 3,00,000) 55,000+ 30% ( TI- Rs.5,00,000)

  6. Tax Rates Applicable to Women for A.Y. 2008-09 For Resident woman Up to Rs.1,45,000. Rs 1,45,001 to 1,50,000 Rs.1,50,001 to 2,50,000 Rs. 2,50,001 and above Nil 10% x ( TI – Rs. 1,45,000) 500+ 20% ( TI- Rs 1,50,000) 20,500+30%(TI- Rs.2,50,000) A.Y. 2009-10 For Resident woman Up to Rs.1,80,000. Rs 1,80,001 to 3,00,000 Rs.3,00,001 to 5,00,000 Rs. 5,00,001 and above Nil 10% x ( TI – Rs. 1,80,000) 12,000+ 20% ( TI- Rs 3,00,000) 52,000+30%(TI- Rs.5,00,000)

  7. Tax Rates Applicable to Senior Citizens A.Y. 2008-09 Up to Rs.1,95,000. Rs 1,95,001 to 2,50,000 Rs. 2,50,001 and above Nil 20% x ( TI – Rs. 1,95,000) 11,000+ 30% ( TI- Rs 2,50,000) A.Y. 2009-10 Up to Rs.2,25,000. Rs 2,25,001 to 3,00,000 Rs. 3,00,001 to 5,00,000 Rs.5,00,001 and above Nil 10% x ( TI – Rs. 2,25,000) 75,00+ 20% ( TI- Rs 3,00,000) 47,500 + 30%(TI- Rs.5,00,000) Education Cess @ 2% + Higher Education Cess @ 1% Surcharge @ 10% is applicable to Total Income above Rs. 10 lacs

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

  9. Example For Assessment year 2009-2010: Male • Particulars (Rs.) (Rs.) (Rs.) • Gross Salary Income 2,00,000 5,00,000 10,00,000 (including Allowances) Contribution to GPF 20,000 50,000 1,00,000 Gross Salary 2,00,000 5,00,000 10,00,000 Less: Deduction U/s 80C 20,000 50,000 1,00,000 Taxable Income 1,80,000 4,50,000 9,50,000 Tax thereon 3,000 45,000 1,75,000 Add: Surcharge NIL NIL NIL Education Cess @2% 60 900 3,500 Secondary & Higher Education Cess @1% 30 450 1,750 Total Tax Payable 3,090 46,350 1,80,250

  10. REVISED PAY COMMISSION AT GLANCE

  11. HOW TO COMPUTE TAX UNDER THE HEAD SALARY ( A.Y. 2009-10)

  12. Taxability of various allowances for A.Y. 2009-10 1) Basic Pay = Fully Taxable 2) D.P. = Fully Taxable ( D.P. is not payable according to the Pay Commission) 3) D.A. = Fully Taxable 4) C.C.A. = Fully Taxable ( C.C.A. is not payable according to the Pay Commission) 5) N.P.A.(News Paper Allowance) = Fully Taxable 6) H.R.A. ( House Rent Allowance). Least of the following is exempt u/s 10(13A) of Income Tax Act. a) Actual HRA Received b) Rent Paid less 10% of Basic Salary + D.A. c) 50% of Salary for Delhi, Mumbai, Calcutta & Chennai or 40% in case of other cities. 7) Transport Allowance = Exemption of Rs 800/- P.M, balance is taxable NOTE (Section 10(14A):70% of an allowance or Rs 6000 P.M. whichever is lower,is exempt for an employee working in any transport system, to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided such employee is not in receipt of daily allowance.

  13. Medical Reimbursements to employees

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

  15. Loss/ income under the head House Property • If a person have taken any Loan for construction/ purchase of residential house, he can claim the rebate on the amount of repayment of loan, as under: • For Principal Portion = Rebate u/s 80C up to maximum of Rs 1,00,000/- is available • b) For Interest Portion = A normal deduction of Rs. 30,000/- is allowed in respect of interest on borrowed capital . • Rs. 1,50,000/- is available if such loan has been taken on or after 1.4.1999 for construction or acquiring the residential house and the construction acquisition of the residential unit out of such loan has been completed with in three years from the end of the financial year in which capital was borrowed.

  16. IMPORTANT POINTS TO REMEMBER • Normally, an employee can take the benefit of either H.R.A. (u/s 10 (13A) Least of the following is exempt: • a) Actual HRA Received • b) Rent Paid less 10% of Basic Salary + D.A. • c) 50% of Salary for Delhi, Mumbai, Calcutta & Chennai or 40% in case of other cities.) • or • Relief of interest on housing loan on self occupied house. • An employee can take the benefit of both exemptions if the self occupied house is far from his work place. • If the house purchased by the assessee is given on Rent, then (Rent received- 30% of Rent Received) is chargeable as tax under the head, Income from House Property and interest paid on borrowed capital is fully claimed as expenses irrespective of amount.

  17. REBATE U/S 80 C • An employee is entitled to deduction for the whole of the amount paid or deposited in the current Financial Year in the following schemes, Subject to a limit of Rs 1,00,000/-. • Insurance Premium • Provident Fund, GIS, PPF, VPF. • Purchase of NSC and Interest accrued on previous NSC purchased. • Units of any Mutual Fund. • Principle portion of repayment of Housing Loan. • Tuition Fee. • Term Deposit for a fixed period of not less than five years.

  18. Rebate u/s 80CCC Annuity Plan pension plan An employee paid or deposited any amount for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension. Maximum amount is Rs 1,00,000/- Rebate u/s 80CCD Where an assessee employed by the Central Govt. on or after 01/01/2004, has in the previous year paid any amount in his account under schemes as notified by the Govt., he shall be allowed a deduction of the whole of the amount so paid subject to a ceiling of 10% of his Salary in the Previous Year. Same applies to Govt contribution. Total becomes 20%. NOTE : The aggregate amount of deduction u/s 80C, 80CCC and 80CCD shall not exceed Rs 1,00,000/-.

  19. Deduction u/s 80D Mediclaim Policy (over Rs. 1 lakh) The deduction is allowed for making the payment to effect or keep in force an insurance on :- The health of the assessee or on the health of wife or husband, dependant parents or dependent children of the assessee. Maximum amount of Deduction is Rs15,000/- or Rs 20,000/- if the payment is made for insurance of Senior Citizen.

  20. Deduction u/s 80DD Relief to Handicapped Dependent • Where an assessee, has, during the previous year: • Incurred any expenditure for the medical treatment ( including Nursing) training and rehabilitation of a dependant, being a person with disability or • Paid or deposit any amount under a scheme framed in this behalf by the life insurance corporation or any other insurer or Administrator or the specified Company for the maintenance of a dependant, being a person with disability. • The assessee shall be allowed a deduction of a sum of Rs 50,000/- from his gross total income. • The amount of deduction is a fixed deduction of RS 50,000/-, irrespective of the amount incurred or deposited under the scheme. • However, where such dependent is a person with severe disability (80% or more), an amount of Rs.75000 shall be allowed as deduction subject to the fulfilled.

  21. Deduction u/s 80GG Those in Occupation of GOVT. QTRS • The assessee is entitled to deduction in respect of House Rent Paid by him for his own residence subject to following conditions: • The assessee has not been in receipt of any HRA. • The assessee does not own any residential accomodation himself, his spouse or minor child or where assessee is member if HUF, by such family at the place where he ordinarily resides or perform duties of his office. • The assessee files the declaration in Form-10BA. Amount of deduction u/s 80GG is least of the following: 1) Rent paid less 10% of his total Income. 2) 25 % of Total Income. 3) Rs 2,000/- Per Month.

  22. Deduction under section 80U For handicapped employee In computation the total income of an individual , being a resident, who, at any time during the previous year , is certified by the medical authority to be a person with disability, three shall be allowed a deduction of a sum of fifty thousand rupees. However, where such individual is a person with severe disability (80% or more), a higher deduction of seventy-five thousand rupees shall be allowed.

  23. Relief under section 89 (1) Tax on arrears If an individual receives any portion of his salary in arrears or in advance , he can claim relief in terms of section 89 read with rule 21A . The idea for this relief is to compensate the individual to pay tax at higher rates.

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

  25. Thank You

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