INCOME TAX

SALARIES HOUSE PROPERTY BUSINESS AND PROFESSION CAPITAL GAINS OTHER INCOMES

Income Tax
- Income from Salaries, - Income from House Property.
- What is included in the Salary ? - What is not included in the Salary ? - What is Income from House Property ?

What is Included in Salary

Basic Pay (Band Pay + Grade Pay ) / Dearness Pay / Special Pay / Personal Pay / Deputation Pay / OTA / Dearness Allowance / CCA If Admissible, HRA to the extent not exempted u/s 10, Wages / Bonus / Honorarium / Fees / Leave Salary / Reimbursement of Tuition Fee / Pay Advance, Leave Encashment. Govt. Contribution under New Pension Scheme, Perquisites viz Rent free Quarters and Furnished Accommodation.

What is not included in the Salary

Travelling Allowance / Conveyance Allowance, Transport Allowance (Up to Rs.800/- & Rs.1600/-P.M.), Value of L.T.C., Children Education Allowance (Max. Rs.1000/- Per Child ), Hostel Subsidy {up to Rs.3000/- P.M. (2 Children )}, Tribal Area Allowance, Hill Compensatory Allowance, Remote locality / Difficult Area Allowance, Salary received from UNO, Retirement Benefits

Gratuity, Commutation of Pension, Encashment of Earned leave, Lump sum payment of G.P.Fund, Payment under CGEGIS/CGEIS.

House Rent Allowance

If living in own house and he does not pay any rent / Pays rent not exceeding 10% of his salary --- No Exemption, If living in a rented House exemption allowed as least of the following :
Actual amount of HRA, Rent paid in excess of 10% of salary, 50% of salary in Cities Like Delhi, Mumbai, Kolkata and Chennai. 40% if resides at any other Cities

How to Calculate the Income Tax

Work out Gross IncomeLess : Transport Allowance Less : Entertainment Allowance (Max Rs.5,000/-), Professional Tax Less : Permissible deductions under Section 80D, 80DD,80DDB,80E etc. Less : Donations Less : Deductions under 80C,80CCC etc. (Maximum Rs.1,00,000/-) Less : Infrastructure Bonds under 80CCF (Maximum 20,000/-

How to Calculate the Income Tax

Work out Gross Salary (Less: Transport Allowance) Less : (a) Professional Tax, (b) Entertainment Allowance (Max Rs.5,000/-) (c) (I) (i) Accrued Interest on Housing Loan, (ii) Medical Insurance- Max. Rs.15,000/- ; Sr. Citizen Rs.20,000/(iii) Health Insurance (For Parents only) Rs.15,000/- ; Sr. Citizen Rs.20,000/(iv) Handicapped dependent Rs. 50,000/With severe disability Rs.75,000/(v) Interest on Education Loan (vi) Cost of Medical Treatment

c (II) Donations

(A) - 50 % of Total DonationsJawaharlal Nehru Memorial Fund, Prime Ministers Draught Relief Fund, National Children Fund, Indira Gandhi Memorial Trust, Rajiv Gandhi Foundation

1.

2.
3. 4. 5.

Donations
(B) - 100 % of the donation deducted from Taxable Income

National Defence Fund, P Ms National Relief Fund, P Ms Armenia Earthquake Relief Fund, National Foundation for communal Harmony, University or Educational Institute of National Eminence, National or State Blood Transfusion Council with sole object for Blood Bank, National Sports Fund, National Cultural Fund, National Illness Assistance Fund,

Donations- Contd.

Chief Minister or Lt. Governors Relief Fund, Andhra Pradesh Chief Ministers Cyclone Relief Fund, Fund for Technology development and Application, Army central Welfare Fund or Indian Naval Benevolent Fund, National trust for Welfare of Persons with Autism, cerebral Palsy.

Contributions/ Savings-Contd
(d) Contributions/ Savings :(i) LIC Premium Ltd. to 20% of Assured Sum, (ii) Contribution to GPF/CPF/PPF, (iii) National Saving Certificates, (iv) Contribution to ULIP, (v) Contribution to Mutual Funds, (vi) Refund of HBA, (vii) subscription to National Housing Bank,

Contributions/ Savings-Contd.
(viii) Tuition Fees paid in respect of 2 Children, (ix) Subscription to any eligible capital issue, (x) Subscription to such deposit scheme engaged in long term financing/purchase of houses for residential purposes, (xi) Contribution to any Pension Fund set up by Mutual Fund, (xii) Fixed Deposit for minimum 5 years in State Bank or any PSB or Scheduled Bank. (xiii) Senior Citizen Saving Scheme-2004 (xiv) Post Office (5 Year) Time Deposit Scheme

INFRASTRUCTURE BONDS
(e) Contributions/ Savings : Recognized Infrastructure Bond Maximum Rs. 20,000/In addition to (d) above (Savings) Blocking Period (5 Years)

Scrapped, Not available from the FY 2012-13

INCOME TAX
Total of 2. (a) + (b) + (c) Subs tract this From 1. (Gross Salary), THEREAFTER (d) Limited to Rs.1,00,000/-. (e) Infrastructure Bond limited to Rs. 20,000/- (No to FY 2012-13) Balance amount is Taxable Salary

Rates of Income Tax- 2012-13

NORMAL RatesUp to Rs.2,00,000 - Nil From Rs.2,00,001 to 5,00,000 - 10%, From Rs.5,00,001 to 10,00,000 - Rs. 30,000/+ 20% of the income above 5,00,000, Above Rs.10,00,000 - Rs. 1,30,000 + 30% of the income above 5,00,000

Rates of Income Tax- 2012-13

Rates For Working Women Up to Rs.2,00,000 - Nil From Rs.2,00,001 to 5,00,000 - 10%, From Rs.5,00,001 to 10,00,000 - Rs. 30,000/+ 20% of the income above 5,00,000, Above Rs.10,00,000 - Rs. 1,30,000 + 30% of the income above 5,00,000

EDUCATION CESS & SURCHARGE

Education Cess- 3 % of the Income Tax Education Cess 2% Secondary & Higher Education Cess 1 %
Surcharge

No surcharge up-to Rs. 10,00,000/Rs.10,00,001 and above 5 % & 2.5 %of Income Tax

Income from Let out House Property

1.

2.

3.

4.
5.

Annual value- Highest of the following Three(i)- Reasonably let out value, (ii)- Municipal Valuation, (iii)- Actual Rent Received. Less : Municipal Taxes, Insurance. Net Value (1.-2.) Deduction 30% of 3. above. Net Chargeable Income (3.- 4.)

TAX DEDUCTION AT SOURCE

DEDUCTION AT SOURCE ADVANCE PAYMENT SALARIES CONTRACTORS Rs. 30,000 DIVIDENDS Rs.2,500 INTEREST ON SECURITIES PROFESSIONAL OR TECHNICAL SERVICES FEES Rs.30,000 ROYALTIES

RATES OF TAX DEDUCTION AT SOURCE

TDS OF 10%

INTEREST ON SECURITIES DIVIDEND INTEREST NOT EXCEEDING Rs.10,000 PROFESSIONAL OR TECHNICAL FEES INSURANCE COMMISSION > Rs.5,000 BROKERAGE /COMMISSION > Rs.2,500 SALE OF LOTTERY TICKETS > Rs.1,000

RATES OF TAX DEDUCTION AT SOURCE

TDS OF 20%

WITHDRAWALS FROM NSS > Rs.2,500

REPURCHASE OF UNITS BY MF / UTI

INCOME FROM FOREIGN EXCHANGE ASSETS

RATES OF TAX DEDUCTION AT SOURCE

CONTRACT TO TRANSPORTER CONTRACTS TO H U F CONTRACTS TO OTHERS

0% 1% 2%

ROLE OF DRAWING & DISBURSING OFFICER

Person responsible for paying any income under SALARIES shall at the time of Payment deduct Income Tax at the average of Income Tax. Financial Year and Assessment Year SALARY (As in slide and 14)

PROCEDURE TO BE FOLLOWED

Well Conversant with the Rules and Rates of Income Tax, Responsibility for correct deduction, Excess tax is not recovered, No refund is permitted, Refund will be made by Income Tax Office.

PROCEDURE TO BE FOLLOWED

First 3 - 4 Months

recovered Last Year. Small amount recovered Left out 4 5th Month Assessment of Likely tax in the year (New
Rates) Middle of September Provisional Tax be calculated

1/12 of the Total Tax in

PROCEDURE TO BE FOLLOWED

September onwards-- Balance in equal monthly installments February -- Final calculation and recovery after all proofs and certificates requiring exemptions March -- No payment without recovery of Tax

Income Tax Returns

Individuals shall file with the Income Tax Department DDO shall Provide Form 16 and 16A as the case may be. Certificate of Tax deduction. TDS Certificate to be issued.

DDOs Responsibility

DDO to file Quarterly Return in Form No.24 by 30th June, 30th September and 31st December and 31st March every year. The form includes details of deductions made in the previous quarter. The return is to be sent through computer media. Failure to comply, invites penalty of Rs.100/- to Rs.200/- per day of default.