1. WELCOME
Presentation by:
M. CHANDRA GOUD
INCOMETAX OFFICER

2. Salary Taxation

3. Department Website
The relevant Acts, Rules, Forms and Notifications are available at the website of the Income-tax Department -

4. TDS rates for Financial Year 2011-12
Senior Citizen
Woman
Others
Super Sr. Citizen
Tax (%)
 For Income Between 0 to 2,50,000
 For Income Between 0 to 1,90,000
 For Income Between 0 to 1,80,000
nil
 For Income Between 2,50,001 to 5,00,000
 For Income Between 1,90,001 to 5,00,000
 For Income Between 1,80,001 to 5,00,000 10
 For Income Between 5,00,001 to 8,00,000 20
 For Income above 8,00,001
For Income above 8,00,001 30
Surcharge
Education Cess 3

5. What is salary ? Salary includes
Wages, Any annuity or Pension, any Gratuity, any Fees, Commission, Perquisites, Leave encashment, Arrears of salary and others.

6. HOUSERENT ALLOWANCE u/s.10(13A)
The least of the following exempted
Actual HRA received
Rent paid in excess of 10% of salary
50% of salary in metro cities
40% in other places.
For this purpose “Salary” includes dearness allowance if terms of employment so provide

7. House Rent Allowance
The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent.
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.

8. Allowances exempt, amount received or limit specified, which ever is less
Children Education Allowance : Exempt up to actual amount received per child or Rs.100 p.m. per child up to maximum of two children, which ever is less.
Hostel Expenditure Allowance : Exempt up to actual amount received per child or Rs.300 p.m. per child up to maximum of two children, which ever is less.
Transport Allowance :Exempt to the extent of Rs.800 p.m.

9. PERQUISITES
The value of any benefit or amenity granted or provided free of cost or at concessional rate.
With effect from (assessment year ), the value any specified security (stock option) or sweat equity shares allotted or transferred. 9

10. Gratuity
Death Cum Retirement Gratuity received by the Central Govt./State Govt. /Local Authorities.
Covered by gratuity Act, & Any other gratuity, least of the following is exempted.
Actual amount received.
15 days salary for each year of completed service
Rs.10,00,000/-.

11. EL Encashment
Central Govt / State Govt Employees – Exempt
Other Employees - 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 of Rs. 3,00,000.

12. Deduction on income from House property
interest up to a maximum limit of Rs. 1,50,000 is allowed
Loan taken on or after
for constructing/acquiring the residential. house and
completed within three years from the end of the financial year in which capital was borrowed.
No limits for the let out property
Only one property is eligible for deduction

13. Deductions under chapter VI A –u/s.80C,80CCC&80CCD
The following investments are eligible for deduction:
Life Insurance Premium, Statutory Provident Fund, RPF, PPF, NSC, ULIP, Notified Units of Mutual Fund, Re-payment of housing loan, Tuition Fee paid, fixed deposit for 5 years or more with a scheduled Bank, Senior Citizen Saving Scheme, five year time deposit scheme in Post Office etc.

14. Deduction u/s.80CCC
Deduction in respect of contribution made to pension fund – any annuity plan of the LIC of India.
The maximum amount deductible under this section is 10 per cent of salary.

15. Deduction u/s.80CCD
Deduction in respect of contribution made to pension scheme notified by Central Govt
The maximum amount deductible under this section is 10 percent of salary.

16. Deductions u/s.80CCE (u/s.80C,80CCC&80CCD)
Amount of deduction allowable; gross qualifying amount is actual amount invested or Rs.1,00,000 which ever is lower.

17. Deductions u/s.80CCE (u/s.80C,80CCC&80CCD)
Sec.80CCE amended w.e.f. the F.Y – The contribution made by employer to NPS u/s.80CCD(2) shall be excluded from the limit of Rs.1,00,000

18. Deduction u/s.80CCF
Deduction in respect of subscription to long term infrastructure bonds.
· This deduction applicable from the assessment year
Maximum deduction allowable is Rs.20,000.

19. Deduction u/s.80D The premium can be paid by any mode other than cash.
Medical insurance premium (Med claim Policy) paid: On the health of taxpayer, spouse, parents and dependent children
The premium can be paid by any mode other than cash.
It is paid out of income chargeable to tax.

20. Deduction u/s.80D Amount of deduction Rs.15,000 –
additional deduction Rs.5,000 is allowed if the policy is taken on the health of senior citizen.

21. Deduction u/s.80DD
Deduction in respect of maintenance including medical treatment of a handicapped dependent :
Furnish a certificate issued by the medical authority in form No.10-IA.
Amount of deduction Rs.50,000 is allowed.
In case severe disability (80% or more), Rs.1,00,000 is allowed.
The person claiming deduction under this section, he should not claim any deduction under section 80U.

22. Deduction u/s.80DDB
Medical treatment of dependent or self for specified disease/ailment.
Amount of deduction Rs.40,000: if the person is a senior citizen Rs.60,000 is allowed.
This deduction is not allowable by the DDO. The employees has to claim in his/her return of income.

23. Deductions -u/s.80E
Payment of interest on loan taken for higher education: spouse or children
The loan has to be taken from any financial institution or approved charitable institution.
Such amount is paid out of his income chargeable to tax.
The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier.

24. Deductions -u/s.80G
Deduction in respect of donations to certain funds, charitable institutions etc.
· Deduction can be allowed by the employer only in respect of donations made to Prime Minister Relief Fund, Chief Ministers Relief Fund, Earthquake Fund, etc.
· In respect of donations to charitable institutions, deductions cannot be allowed by the employer.

25. Deductions under Chapter VI A-u/s.80U
Deduction in case of a person with disability: blindness, low vision, leprosy, hearing impairment, mental retardation and mental illness.
Conditions: Furnish a certificate issued by the medical authority in form No.10-IA.
Amount of deduction (fixed)Rs.50,000 is allowed. In case severe disability (80% or more), Rs.1,00,000 is allowed.

26. Relief u/s.89(1)
Relief is available when salary is received in arrears or advance.
Application in Form-10E has to be obtained from the employee.
Form 10E is required to allow claim of relief u/s. 89(1)

27. Relief u/s.89(1)
from (assessment year ) that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service.

28. Estimation of Income for deducting tax
Method of calculation : Estimate the salary including perquisites for the financial year 2010, apply the rates, calculate the tax and divide it by 12.

29. Estimation of Income for deducting tax
The amount of tax so arrived should be deducted every month in equal installments. However, Any excess or deficit arising out of any previous deduction can be adjusted by increasing or decreasing the amount of subsequent deductions during the same financial year.

30. Duties of Persons responsible for deducting tax
DDOs to satisfy themselves of the genuineness of claim:
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 deductions.

31. FORM 16
The deductor has to issue a certificate in Form No. 16 along with annexure A or B and 12BA before 31st May from the end of financial year, in which the deduction was made.

32. TDS ON INTEREST SCOPE OF INTEREST : Interest payable in respect of
Monies borrowed
Debt incurred (including a deposit, claim etc..)
INTEREST ON BANK DEPOSITS –
TDS applicable to interest on
term / fixed deposits
cumulative deposits
reinvestment deposits
variable / flexi deposits

33. Form No.15G & 15H
If the Depositor submits a declaration in form No.15G or 15H for non deduction of tax, the same should be forwarded to the DIT(CIB).
Due date- on or before 7th of the following month

34. TDS ON INTEREST
INTEREST ON BANK DEPOSITS –
each branch of a bank is considered as a unit for reckoning the threshold limit for TDS
interest payable on all the deposits in the branch standing in the name of a payee should be aggregated
interest payable in the case of a deposit in joint names should be aggregated with the interest payable to joint account holder having higher interest income (circular No. 256)

35. TDS ON INTEREST RATE OF TDS THRESHOLD LIMITS GENERAL PRINCIPLES 10%
Rs. 10,000/- in the case of payments by banks, cooperative banks and post office (in respect of senior citizen savings scheme)
Rs. 50,000/- in the case of interest on compensation awarded by motor accidents claims tribunal
Rs. 5,000/- in all other cases
GENERAL PRINCIPLES
TDS to be made on gross interest payments

36. TDS ON CONTRACT PAYMENTS
SCOPE OF THE SECTION :
Contract payments for
Carrying out any work in pursuance of a contract
Supply of labour for carrying out any work
Payments made by a contractor to a sub-contractor for
carrying out whole or any part of the work undertaken by the contractor
Supply of labour for carrying out whole or any part of the work undertaken by the contractor

37. TDS ON CONTRACT PAYMENTS
RATE OF TDS
1% where the contractor / subcontractor is an individual or HUF
2% where the contractor / sub-contractor is a person other than individual or HUF
THRESHOLD LIMITS
Rs. 30,000/- in respect of each contract (w.e.f 01/07/2010)
Rs. 75,000/- in the aggregate to the payee during the year in respect of all the contracts (w.e.f 01/07/2010)
GENERAL PRINCIPLES
TDS to be made on gross payments and not on income comprised therein

38. TDS ON RENT MEANING OF RENT
Any payment under a lease / sub-lease / tenancy or any other agreement for use of
Land
Building (including factory building)
Land appurtenant to a building
Plant
Machinery
equipment
Furniture
Fittings
either separately or together and whether they are owned by the payee or not

39. TDS ON RENT RATE OF TDS THRESHOLD LIMITS
2% for the use of plant, machinery or equipment (w.e.f 01/10/2009)
10% for the use of other assets (w.e.f 01/10/2009)
THRESHOLD LIMITS
Rs. 1,80,000/- per annum (w.e.f 01/07/2010)

40. TDS ON RENT GENERAL PRINCIPLES
In the case of jointly owned property, the threshold limit of Rs.1.80 Lakhs will apply in respect of each co-owner if the shares of the co-owners are definite and ascertainable
No tax is deductible on the municipal taxes, ground rent etc. borne by the tenant (circular No.718)
TDS is not required to be made on the service tax payable with the rent (circular No. 4 of 2008)
TDS to be made even if the rent receipt is assessable as a business receipt in the hands of the receipient

41. TDS ON COMMISSION OR BROKERAGE
MEANING OF COMMISSION OR BROKERAGE
Payment to a person acting on behalf of the payer for
the services rendered (other than professional services)
any services in the course of buying or selling of goods
Services in relation to transactions in any asset, valuable articles or things other than securities
Relationship of principle and agent is essential between the payer and payee to characterize it as commission / brokerage

42. TDS ON COMMISSION OR BROKERAGE
RATE OF TDS
10%
THRESHOLD LIMIT
Rs. 5,000/- per annum (w.e.f 01/07/2010)

43. TDS ON FEES FOR PROFESSIONAL OR TECHNICAL SERVICES
Scope of the section
Fees for professional services
Fees for technical services
Royalty
Payment towards non-compete agreement

44. TDS ON FEES FOR PROFESSIONAL OR TECHNICAL SERVICES
MEANING OF PROFESSIONAL SERVICES
Services rendered by a person in the course of carrying on
Legal profession
Medical profession
Engineering or architectural profession
Accountancy profession
Technical consultancy
Interior decoration
Advertising
Authorised representative

45. TDS ON FEES FOR PROFESSIONAL OR TECHNICAL SERVICES
RATE OF TDS
10%
THRESHOLD LIMITS
Rs. 30,000/- per annum (w.e.f 01/07/2010)
GENERAL PRINCIPLES
TDS to be made on gross payment including the reimbursement for expenses (circular no.715)

46. TDS ON FEES FOR PROFESSIONAL OR TECHNICAL SERVICES
INSTANCES OF PAYMENTS LIABLE FOR TDS
Payments to recruitment agencies (circular No.715)
payment by banks for professional services for loan processing, credit verification
Payments made to the Airport Authority of India towards Navigational facilities
Payments made by banks to MICR centre for processing and clearing MICR cheques
Payments made to a hospital for rendering medical services (circular no.715)
Payments made by an advertising agency to the models, artists and other technicians (circular no. 714)
Royalty paid by publishers to the authors
Port/access/interconnect charges paid by telecom operators

47. CONDITIONS FOR VALIDITY OF 15G / 15H DECLARATIONS
Declaration in form No. 15G not valid if the amount paid / credited exceeds the tax exemption limit
Declarations valid only for the assessment year mentioned therein
Declarations valid only for the payment / credit made subsequent to the date of declaration

48. Thank you