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INCOME TAX ACT, 1961 TAX DEDUCTION AT SOURCE -- S.K.Chakraborty, W.B.A.&A.S., Accounts Officer, A.T.I.

HEAD OF INCOME INCOME FROM SALARY INCOME FROM HOUSE PROPERTY INCOME FROM BUSINESS/PROFESSION CAPITAL GAINS INCOME FROM OTHER SOURCES

ROLE OF THE D.D.O. -- He is the “Person responsible for paying”. He acts as an “Assessing Officer” in respect of the income derived from salary. He can assess tax on any other income that an assessee desires to declare.

TAX DEDUCTION ACCOUNT NUMBER (TAN) Ten digit unique number allotted by the Income Tax Department for the purpose of identifying individual D.D.O. Application in FORM NO. 49B.

PERMANENT ACCOUNT NUMBBER (PAN) Ten digit unique number allotted by the Income Tax Department for the purpose of identifying individual assessee. Application in Form No.49A.

RATES OF T.D.S. U/s 192 - At average rate on salary payment. U/s 194C - @ 1.03% on payment on advertising contract. - @ 2.06% on other contractual payment. U/s 194LA - @10.30% on payment of compensation on acquisition of immovable properties.

TAXATION LIMIT On Salary - Total income exceeding minimum taxation limit (Rs.110,000 at present). On Contractual payment - Single payment exceeding Rs.20,000 or gross annual payment exceeding Rs.50,000. Annual compensation payment exceeding Rs.100,000.

NO T.D.S. The recipient can make an application in Form No.13 to the “Assessing Officer” to get a certificate of lower tax deduction or no tax deduction. In case of salary payment however no such application is necessary. The D.D.O. may act directly on the basis of information submitted to him by the individual payee.

REMEMBER The person responsible for payment can make adjustment for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within the financial year itself.

DEPOSIT OF T.D.S. Government Deductor - On the day of deduction itself. Others - Within one week of deduction.

CREDIT CERTIFICATES Salary - Form No.16 or 16AA – within 30th April. Other - Form No.16A – within one month from the end of the month in which credit is given or the amount is paid.

RETURN All government deductors are compulsorily required to file their T.D.S. return on electronic media i.e. e-tds returns.

e-tds return is a TDS return prepared in. Form No e-tds return is a TDS return prepared in Form No.24Q or 26Q in electronic media as per prescribed data structure in either a floppy or a CD ROM accompanied by a signed verification in Form No.27A.

e-Filing Administrator The CBDT has appointed the Director General of Income Tax (Systems) as e-Filing Administrator for the purpose of the Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003. It issues the data format for the purpose of preparing the e-tds returns.

e-TDS Intermediary CBDT has appointed National Securities Depository Ltd., Mumbai as e-tds intermediary. It has opened TIN-FC i.e. Tax Information Network Fecilitation Centres throughout India for acceptance of e-tds returns.

CHARGES PAYABLE Returns having upto 100 deductees records. Rs.25/- plus taxes. Returns having 101 to 1000 deductees records. Rs.150/- plus taxes. Returns having more than 1000 deductees records. Rs.500/- plus taxes.

DUE DATE Quarter Due Date April to June July 15 July to September October 15 October to December January 15 January to March June 15

REMEMBER Where an employee has worked with a deductor for part of the financial year only, the deductor should recover t.d.s from his salary and report it in the quarterly Form 24Q of the respective quarter(s) up to the date of employment with him.

In Form 24Q4, the deductor should include particulars of that employee in Annex.II & III irrespective of the fact that the employee was not under his employment on the last day of the year

REMEMBER Where an employee joins employment with a deductor during the course of the financial year, his t.d.s particulars should be reported by the current deductor in Form 24Q of the relevant quarter.

In Form 24Q4, the deductor. should. include in Annex. II & In Form 24Q4, the deductor should include in Annex.II & III particulars of t.d.s of such employee for the actual period of posting under him.

please view the websites at -- For more information, please view the websites at -- www.incometaxindia.gov.in www.tin-nsdl.com

TAX PLANNING Calculate salary income at current rate for the whole financial year. Reckonable salary months are March to February. Deduct the Tax on employment i.e. Profession Tax paid. Deduct H.R.A. deductible, if any.

DEDUCTIBLE H.R.A. Least of the following three alternatives :- Actual HRA received, Rent paid in excess of 10% of salary, 40% or 50% (in case of Kolkata) of salary. - Amount arrived at is the Income from Salary.

INTEREST ON HB ADVANCE Income from House Property in respect of the self occupied residential house is ‘NIL’. But the interest on borrowed capital for constructing or acquiring such property can be shown as ‘LOSS’ under that head of a/c. The DDO has the authority to set off that loss to the extent of Rs.150000/- (maximum) against the Income from Salary.

GROSS TOTAL INCOME It is the sum total of all the income declared by the assessee e.g. Income from salary after all allowable deductions, Income from other sources i.e. Bank Interest, Interest from small savings etc., Income/loss from House Property.

DEDUCTIONS FROM GTI Medical Insurance Premium (u/s 80D) – maximum Rs.15000/-, Expenditure for medical treatment including nursing, training and rehabilitation of a dependent being a person with disability (u/s 80DD) – maximum Rs.50000/-

Donations u/s 80G, Repayment of loan taken for higher education u/s 80E, Deduction for the person with disability u/s 80U – maximum Rs.50000/-, 6. Deduction u/s 80C – maximum Rs.100000/-.

Deduction u/s 80C Gross total of all the subscription, deduction and contribution to – L.I.P./U.L.I.P./P.L.I./G.I.S., G.P.F./P.P.F., N.S.C./Interest on NSC being reinvestment, Repayment of H.B.Advance, Tuition Fee of two children, Infrastructure Bond/E.L.S.S., Pension Annuity Plan.

TOTAL INCOME The Gross total income reduced by the deductions is the TOTAL INCOME. Income Tax is calculated on this Income at the rate prescribed for the relevant financial year.

EDUCATION CESS The income tax calculated is to be increased by another 3% towards Education Cess. Where rebate of income tax for arrear salary received during the financial year is availed of u/s 89(1), the Education Cess is be added on the net income tax payable.

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