Deduction for Salaried Employees

 Deduction is major question for salaried employees.  Each employee wants to know that what type of deduction can be claimed by him to avoid deduction of Income Tax from his salaries.  Keeping in view of these things all Deductions are framed below to watch the All deductions relating to Salaried Employees. 

Deductions at a Glance to Salaried assessee

Serial No’s	Sections	Particulars	Assessee to whom allowed	Quantum of Deduction
1	80CCC	Deduction in respect of contribution to certain pension funds	Only Individuals	Max. Rs. 1,00,000
2	80CCD	Deduction in respect of contribution to new pension scheme	Any employee or a self-employed person	In case of employees maximum 10% of salary and in case of self-employed persons 10% of Gross Total Income
3	80CCE	Limit of deduction u/s. 80C,80CCC and 80CCD (only employees contribution to New Pension Scheme to be included for the limit of Rs. 1,00,000)	Individual or HUF	Max. Rs. 1,00,000
4.	80CCF	Deduction in respect of Long-Term infrastructure bonds.	Individuals or HUF	Max. Rs. 20,000.  Removed w.e.f.  F.Y. 2012-13
5.	80D	Deduction in respect of medical insurance premia w.e.f. A.Y. 2011-12 any contribution made to the Central Government Health Scheme (CGHS) shall also be eligible for deduction	Individual or HUF whether resident or non-resident.	In Case of Individuals (i) For individual himself, spouse and dependent children   Rs. 15,000 (ii) For parents of the individuals, whether dependent or not. RS. 15,000 In case of HUF   Rs. 15,000 Note:- Addl. Rs. 5,000 if any of the above person insured is a senior citizen.
6.	80DD/ Rule 11A	Deduction in respect of maintenance including medical treatment of person with physical disability.	Individual or HUF resident in India: 1)      With disability 2)      With severe disability.	Rs. 50,000 Rs. 1,00,000
7.	80DDB/ Rule 11DD	Deduction in respect of medical treatment etc.	Individual or HUF resident in India For senior citizen	Rs. 40,000 Addl. Rs. 20,000
8.	80E	Deduction for interest paid on loan taken for pursuing his higher education or for the purpose of higher education of his relative.  Higher education shall cover all post schooling courses. “Relative” means the spouse and children of the individual.	Individual whether resident or not.	Actual amount paid.
9.	80G/Rules 11AA & 18AAA	Deduction in respect of donations to certain funds, charitable institutions, etc.	All assesses	(a)    100% or 50% of eligible donations, without applying qualifying limit in certain cases. (b)   100% or 50% of eligible donations, after applying Qualifying limit of 10% of adjusted GTI.
10.	80GG and Rule 11B	Deductions in respect of Rent Paid	Individual only	Max. Rs. 2,000 p.m.
11.	80GGA	Deduction in respect of certain donations for scientific research or rural development, etc. w.e.f A.Y. 2011-12 donations to any research association will be eligible for deduction.	All assesses no having business income.	100% of sum donated.
12.	80GGC	Deduction in respect of contribution to political parties/Electoral Trust	All assesses (except local authority and artificial judicial person)	100% of sum contributed.
13.	80QQE	Deduction in respect of royalty income, etc. of authors of certain books other than text books.	Individuals who are residents in India and are authors.	Actual income or Rs. 3,00,000 whichever is less.
14.	80RRB	Deduction in respect of royalty on patents.	Individual who is resident in India and is a patentee.	100% of such income or Rs. 3,00,000 whichever is less.
15.	80U/Rule 11D	Deduction in the case of permanent physical disability (including blindness)	Resident Individual:	Rs. 50,000 in case of a per with disability. Rs. 1,00,000 in case of a person with a severe disability.

Salary :- Deduction of Interest on Loan for House Property

Section 24(b) of the Act allows deduction from income from house property on interest on borrowed capital as under:-

(i)  the deduction is allowed only in case of house property which is owned and in the occupation of the employee for his own residence. However, if it is not actually occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him.

(ii)  The quantum of deduction allowed as per table below:

Sl. No	Purpose of borrowing capital	Date of borrowing capital	Maximum Deduction allowable
1	Repair or renewal or reconstruction of the house	Any time	Rs. 30,000/-
2	Acquisition or construction of the house	Before 01.04.1999	Rs. 30,000/-
3	Acquisition or construction of the house	On or after 01.04.1999	Rs. 1,50,000/-

In case of Serial No. 3 above

(a)  The house so acquired or constructed should be completed within3 years from the end of the FY in which the capital was borrowed. Hence it is necessary for the DDO to have the completion certificate of the house property against which deduction is claimed either from the builder or through self-declaration from the employee.

(b)  Further any prior period interest for the FYs up to the FY in which the property was acquired and constructed shall be deducted in equal instalments for the FY in question and subsequent four FYs.

(c)  The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the comprehensive picture of Principal and Interest of the loan so repaid.

Salary :- Mandatory quoting PAN/TAN

          Section 203A of the Act makes it 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, statements and other documents. Detailed instructions in this regard are available in this Department's 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 ten thousand rupees. Similarly, as per Section 139A(5B), it is obligatory for persons deducting tax at source to quote PAN of the persons from whose income-tax has been deducted in the statement furnished u/s 192(2C), certificates furnished u/s 203 and all returns prepared and delivered as per the provisions of section 200(3) of the Act.

         All tax deductors are required to file the TDS returns in Form No.24Q (for tax deducted from salaries). As the requirement of filing TDS/TCS certificates, by the employee along with the return of income, has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted. Tax deductors and tax collectors are, therefore, advised to quote correct PAN details of all deductees in the TDS returns for salaries in Form 24Q. Taxpayers liable to TDS are also advised to furnish their correct PAN with their deductors. It may be noted that non-furnishing of PAN by the deductee (employee) to the deductor (employer) will result in deduction of TDS at higher rates u/s 206AA of the Act.

Salary :- Taxation of Income from any Other Head

                                                      Income under any Other head

        (i) Section 192(2B) enables a taxpayer to furnish particulars of income under any head other than "Salaries" ( not being a loss under any such head other than the loss under the head " income from house property") received by the assessee for the same financial year and of any tax deducted at source thereon. Form no. 12C, which was earlier prescribed for furnishing such particulars, has since been omitted from the Rules by the Income Tax (24th amendment) Rules, 2003, w.e.f. 1-10-2003. However, the particulars may now be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under Rule 26B(2) of the Rules and shall be annexed to the simple statement. The form of verification is reproduced as under: 

I, _________ (name of the assessee), do declare that what is stated above is true to the best of my information and belief. 

(ii) Such income should not be a loss under any such head other than the loss under the head "Income from House Property" for the same financial year. DDO shall take such other income and tax deducted at source, if any, on such income and the loss, if any, under the head "Income from House Property" into account for the purpose of computing tax deductible in terms of section 192(2B) of the Act. However, 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 take into account any loss (negative income) only under the head "income from House Property" and no other head for working out the amount of total tax to be deducted. 

(iii) Section 192(2C) lays down that a person responsible for paying any income chargeable under the head "salaries" shall furnish to the person to whom such payment is made a statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in Form 12BA (Annexure-II). Form 12BA along with Form 16, as issued by the employer, are required to be produced on demand before the Assessing Officer in terms of Section 139C of the Act. 

Salary :- Relief u/s 89(1) when Salary Paid in Arrear or Advance

Relief When Salary Paid in Arrear or Advance:

          Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89(1) 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 the same into account in making the deduction under Para(3.1) above.

          Here "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 purposes of the Act.

           With effect from 1-4-2010 (AY 2010-11), 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, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in section 10(10C)(i) (read with Rule 2BA), a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under section 10(10C) in respect of such, or any other, assessment year.

Employees -Tax Free Perquisites

How to Save Income Tax on Salary

All Tax Free Perquisites for Salaried employees are explained below :-

1.  Medical Facility or Medical Reimbursement:
   
   (a)  Medical Facility :- The value of any medical treatment provided to an employee or any member of his family in a hospital, dispensary or a nursing home maintained by the employee shall be a tax free perquisite. 
   (b)  Medical Reimbursement :  Any sum paid by the employer in respect of any expenditure incurred by the employee on his medical treatment or treatment of any member of his family subject to maximum of Rs. 15,000 in the previous year.
2. Recreational Facilities : Any recreational facility provided to a group of employees (not being restricted to a select few employees) by the employer is not taxable.
   
3. Training of Employees: Any expenditure incurred by the employer, for providing training to the employees or by way of payment of fees of refresher courses attended by the employees.
   
4.  Use of health club, sports and similar facilities provided uniformly to all employees by the employer.
   
5. Expenses on Telephone, including  a mobile phone, actually incurred on behalf on the employee by the employer.
   
6. Employer’s Contribution:  Employer’s contribution to superannuation fund of the employee or provided such contribution does not exceed Rs. 1,00,000 per employee per year.
   
7.  The premium paid by the employer on an accident policy taken out by it in respect of the employee would not be a perquisite. [CIT v Lala Shri Dhar (1972) 84 ITR 192 (Del) and CIT v Vinay Bharat Ram (1981) 129 ITR 128 (Del)].
   
8. Motor car provided by the employer to the employee or expenses incurred by the employer in connection with motor  car belonging to the employee (for purposes other than exclusively for personal purposes) shall be a tax free perquisite in the hands of the employee.
   
9. Amount given by the employer of assessee to assessee’s child as scholarship is exempt under section 10(16). [CIT v B.L. Garg (2006) 155 Taxman 189 (All)]
   
10. Food and Beverages provided to Employees: The following shall be a tax free perquisite in the hands of the employees-
       (i)  free food and non-alcoholic beverages provided by the employer to his employees during working hours:
              (a)  at office or business premises or 
             (b)  through paid vouchers which are not transferable and usable only at eating joints. 
                Provided the value of such meal is upto Rs. 50 per meal. 
        (ii)  Any tea or snacks provided during working hours. 
      (iii) Free food and non-alcoholic beverages during working hours provided in a remote area or offshore installation.
11. Loans to Employees : - In the following cases the value of benefit to the assessee resulting from the provision of interest free or concessional loan shall be nil :
    
         (a)  where the amount of loans are petty, no exceeding in the aggregate Rs. 20000;
        (b)  Loans made available for medical treatment in respect of disceases specified in rule 3A of the Income-tax Rules.   However, the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.
12. Perquisites provided outside India :  Perquisites provided by the Government to its employees, who are citizens of india for rendering services outside India, are not taxable.  [Section 10(7)].
    
13. Rent Free House/Conveyance Facility: Rent free official residence and conveyance facilities provided to a Judge of the Supreme Court/High Court is not a taxable perquisite.
    
14. Specified Perquisite allowed to certain Persons:
    
        (a)  Specified perquisites allowed to Judges of the Supreme Court, Chief Election Commissioner, Election Commissioner. 
         (b)  Chairman or retired Chairman, member or a retired member of U.P. S.C. 
                are not taxable perquisites.
15. Residence to officials of Parliament etc. :-  The Rent Free furnished residence (including maintenance thereof) provided to an officer of the Parliament a Union Minister or Leader of Opposition in Parliament, is not a taxable perquisite.
    
16. Accommodation in a Remote Area : - The accommodation provided by the employer shall be a  tax free perquisite if the accommodation is provided to an employee working at mining site or an onshore oil exploration site or a project execution site, or a dam site or a power generation site or an offshore site which -
    
         (a)  being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or
        (b)  is located in a remote area.
17.  Educational Facility for Children of the Employee:  where the educational institution itself is maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer,  there shall be no perquisite value if the cost of such education or the value of such benefit per child does not exceed Rs. 1,000 p.m.
    
18. Use by the employee or any member of his household of laptops and computers belonging to the employer or hired by him.
    
19. Leave Travel  Connection will be discussed in detail later.
    
20. Tax paid by the Employer on Non-Monetary Perquisites : Tax paid by the employer on non-monetary perquisites of the employee shall be exempt in the hands of the employee.  [Section 10(10CC)]
    
    

Exemption from Income Tax Return with salaried income below 5 Lakh Rupees

Salaried taxpayers who do not have other sources of income and whose income are below5 lakh rupees per annum, are being exempted from filing income tax return. 

The Finance Minister Mr. Pranab Mukherjee said on Tuesday (i.e. 24th May,2011) that this will apply in 2011-12 assessment year for the income earned in 2010-11. He said that a notice to this effect is being brought out soon. The Finance Minister was addressing the 27th Annual Conference of Chief Commissioners and Directors General of Income Tax in New Delhi.

Asking the Central Board of Direct Taxes to be vigilant in suspected money laundering cases, Mr. Mukherjee cautioned that terror activities and other crimes are being funded by anti-national elements through illegal transfers. Mr. Mukherjee disclosed that to check these transfers, government has approved setting up of Directorate of Criminal Investigation in Income Tax Department itself. The Directorate will track the criminal activities before, during and after the crime is committed.

Expressing his keenness on fiscal consolidation, Mr. Mukherjee stressed that fiscal deficit has to be reduced drastically to achieve the goal.

Income Tax Calculator for Financial Year 2011-12 (Assessment Year 2012-13)

Friend,

Latest Income Tax Calculation in Excel 

As per finance Bill 2011, Income Tax Calculator in excel sheet for the Financial Year 2011-12 or Assessment Year 2012-13  is ready.  Employee wise data can be stored in it.  Mainly this file is much helpful at the time of e-filing of annual return of salary data or to make provision for advance tax for the Financial Year 2011-12.

Free Excel Based Income Tax Calculator w.e.f. April 1, 2005 to up to Date (Click Here)

To view on line Income Tax Calculator for the F.Y. 2010-11 (click here)

Click Here to Download excel Sheet for F.Y. 2011-12 with New Format of Form 16
Click Here to Download excel Sheet for F.Y. 2012-13 with New Format of Form 16 

Deductions Available for Salaried Employee

Friends,  The gross total income of an individual has to be computed under the following heads of income :-

1. Income from Salaries;
2. Income from House Property;
3. Profit or Gains of Business and Profession;
4. Income from Capital Gains;
5. Income from Other Sources,

          Besides the above incomes, sometimes income of other persons is included in the assessee's Total Income due to clubbing provisions enumerated under section 60 to 64.

         Since Income-Tax is a composite tax on Total Income of a person earned during a period of one previous year, it may so happen that the net result from a particular source/head may be a loss.   This loss can be set off against other source/head as per the provisions for sett off or carry forward and set off of losses contained in sections 70 to 80 of the Income-Tax Act.

          The aggregate of income computed under each head, after giving effect to the provisions for clubbing of incomes and set off of losses, is known as "Gross Total Income ".   In computing the total income of an assessee, certain deductions are permissible under section 80C to 80U from Gross Total Income.   These deductions are however not allowed from the following incomes although these incomes are part of Gross Total Income:

• Long-Term Capital Gains. 
• Short-Term Capital Gain on transfer of equity shares and units of equity oriented fund on or after 01-10-2004 through a recognised stock exchange i.e. short-term capital gain covered under section 111A.
• Winnings of lotteries, races, etc. 
• Incomes referred to in sections 115A,115AB,115AC, 115AD, 115BBA AND 115D.

     These deductions are of two types"-

1. deductions on account of certain payments and investments covered under section 80C to 80GGC.
2. Deductions on account of certain incomes which are already included under Gross total Income covered under sections 80IA to 80U> 

          The income arrived at, after claiming the above deductions from Gross Total Income, is known as Total Income.   It may also be called Taxable Income.   The Total Income thus calculated, should be rounded off to the nearest of Rs. 10/-.

To know more regarding summary of Deductions under section 80C to 80U (Click Here)

Average Income Tax Deduction in Salary

                          The statute enjoins the employer to compute the tax liability of the employee on the basis of the rates in force and to deduct the tax at the average rate computed on the basis of the same. Thus, the employer is required to compute at the beginning of the financial year, the total salary income payable to an employee during the financial year. Further, the employer should also take into account any other income as reported by the employee. After considering the incomes exempt, deductions and relief, the tax liability of the employee should be determined on the basis of the rates in force for the financial year. Every month, 1/12 of this net tax liability as computed above is required to be deducted.

TDS on Salaries

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Fourth Quarter Salary TDS Return (Form 24Q Q4)

As everyone knows that 15th May is the last date for submission of salary e-tds/e-tcs return for the 4th Quarter.  There are many questions regarding submission of data in 24Q Q4 for example below threshold limit salary data will be uploaded or not etc. To resolve such type of queries, some important questions and answers (FAQ) regarding submission of fourth quarter salary etds return are given as under :-

1.  What is the due date for filing of Form 24Q for the fourth quarter of FY 2005-06 in electronic form?
   The due date for filing of Form 24Q for the fourth quarter of FY 2005-06 in electronic form has been extended from June 15, 2006 to July 31, 2006. This extension is valid only for FY 2005-06.
   
   However, the due date for filing Form 24Q for the fourth quarter of FY 2005-06 in paper form is June 15, 2006.
2. How is the Form 24Q for the fourth quarter of FY 2005-06 different from the Form 24 Q to be furnished for the first three quarters?
   While furnishing Form 24Q for the first three quarters, Annexure II (salary details) need not be furnished. Only deductor details, Challan details and deductee details (Annexure I) have to be furnished for the first three quarters. However, for the fourth quarter, Annexure II, which gives salary details of the deductees, has to be furnished giving the details for the whole financial year.
   
3. Is any proof required to be submitted in case of senior citizen?
   No proof is required to be submitted alongwith Form 24Q for the deductees whose deductee type is selected as senior citizen.
   
4. If an employee is a woman as well as senior citizen, what should I mention in column no. 330?
   In such cases, the indicator should be mentioned as ‘S’ – (senior citizen).
   
5. Do I need to provide separate figures under each section (like 80C, 80CCC etc.)?
   There is no need to provide separate figures for each section under 80C, 80CCC, 80CCD and other provisions of Chapter VIA. Only the aggregate amounts are required to be mentioned in column nos. 337 and 338 respectively.
   
6. If an employee is employed only for the part of the year with an organization, in which quarter do I show his salary details?
   For the first three quarters, no salary details (Annexure II) are required to be provided. However, in the fourth quarter, actual salary details for the part of the year during which the employee was under employment with the organization are to be provided.
   
7. In the last quarter, if the Total Amount Deductible under Chapter VIA exceeds Gross Total Income, will I have to show Total Taxable Income as negative figure?
   Total Amount Deductible under Chapter VIA is to be restricted to the Gross Total Income. Therefore, if the Total Amount Deductible under Chapter VIA exceeds Gross Total Income, the Total Taxable Income should be mentioned as zero. In other words, the taxable salary figure cannot be negative.
   
8. Should the total of “Taxable amount on which tax deducted” shown in Deductee details in all four quarters match with the “Total Taxable income” figure shown in the Annexure II (salary details)?
   The figures shown under “Taxable amount on which tax deducted” in Deductee details in all four quarters need not match with the “Total Taxable income” figure shown in the Annexure II (salary details).
   
9. Whether the employee reference no. provided in Annexure I in all the four quarters for an employee should be linked to salary details in Annexure II for that employee?
   The PAN of a particular employee provided in Annexure I in all four quarters should match with the PAN of that employee provided in Annexure II in the fourth quarter. Moreover, a unique employee reference no. for an employee should be used in Annexure I for all the four quarters and Annexure II in the fourth quarter.
   
10. If there is no deduction in a particular quarter, should I file the NIL statement?
    The filing of a NIL statement is not mandatory.
    
11. In case of NIL statement in the fourth quarter, do I need to show salary details of deductees mentioned in first three quarters?
    If there is no deduction in the fourth quarter but statements for all or any of the first three quarters were filed, statement for the fourth quarter giving only salary details (Annexure II) should be filed.
    
12. Whether salary details of an employee whose taxable salary was below the threshold limit for all the quarters are required to be shown in Annexure II?
    Salary details of an employee whose salary was below threshold limit through-out the year need not be provided in Annexure II However, for a part of the year, if his salary was above the threshold limit, the salary details are to be provided in Annexure II.
    
13. Is there a requirement to file annual TDS return in Form 24 for the FY 2005-06?
    From FY 2005-06 onwards, Form 24Q is to be filed on a quarterly basis. There is no requirement to file annual TDS return in Form 24.
    

Average Income Tax Deduction in Salary

                          The statute enjoins the employer to compute the tax liability of the employee on the basis of the rates in force and to deduct the tax at the average rate computed on the basis of the same. Thus, the employer is required to compute at the beginning of the financial year, the total salary income payable to an employee during the financial year. Further, the employer should also take into account any other income as reported by the employee. After considering the incomes exempt, deductions and relief, the tax liability of the employee should be determined on the basis of the rates in force for the financial year. Every month, 1/12 of this net tax liability as computed above is required to be deducted.

Download complete details regarding deduction of Income Tax from Salary (Click Here)

Who will issue Form 16 when Service with Two Employer in a Financial Year

Friends

 (Complication in Service under more than one employer in a Financial Year)

 It is common question that who will issue form 16, in case an employee works with two or more  employers in a single Financial Year.  Solution with example is given as under :-

Example:- 

• First Service with A employer (01.04.2010 to 31.07.2010)
• Second Service with B employer   (01.08.2010 to 15.02.2011)
• Third Service with C employer (16.02.11 to 31.03.2011)
• A deducts TDS Rs. 4000/-, B deducts TDS Rs. 6000/- and C deducts TDS Rs. 8500/-
• Can an employee force his employer to issue form 16 at the time of transfer or not ?.

Solution:-

• If an employee/assessee is employed under more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers. Part B may be issued by each of the employers or the last employer at the option of the assessee.
  
  Finally, Form 16 Part A will be issued by all employers for the amount deducted and deposited by them and  Form 16 Part B will be issued at the option of the assessee either from Last employer or from each of the employer. 

• Employee/Assessee can not force his employer to issue form 16 at the time of his transfer, reason is that  Due date of From 16 is 31st May from the end of Financial Year. 

Download Notification from Here (Click Here)

"No Return" Scheme for Salaried Class

The Chairman of Central Board of Direct Taxes ( CBDT), Sudhir Chandra, today said the scheme to exempt salaried people earning up to Rs 5 lakh annually from filing income tax returns will be notified in the first week of June. The scheme was announced in theUnion Budget 2011-12 by Finance Minister Pranab Mukherjee.

"A category of small-salaried tax payers whose net salaried income is not above Rs 5 lakh and whose tax is deducted at source by the employer who files return, will be exempted from filing returns," Chandra told reporters here.

"The scheme for this category will be notified in the first week of June," he said. "But if the taxpayer is claiming a refund from the I-T department, then he will have to file the return."

The scheme will provide relief to about 70 to 80 lakh people from filing I-T returns.

"We are also trying to exempt small bank-interest income, the tax on which has been deducted at source, under this scheme," he said.

A new facility has been introduced on filing of electronic returns. At the click of the mouse, a portal will open…on which you can view every month how much money your employer has deducted, and whether it has been deposited in the government kitty," Chandra said.

Salary Tax Calculator with New Fromat of Form 16

Friends, Now income tax calculation on salary in  excel  is ready with new format of Form 16.  Data of salary can be stored in it which is helpful for submitting e-tds return of 4th quater.  Annexure-A and Annexure-B are available in excel format.  The following format of form 16 is applicable w.e.f. 01.04.2010 therefore both calculators for F.Y. 2010-11 and F.Y. 2011-12 are updated.  
Below features are available in this utility:-

• Single time entry of  Deductor Detail
• Auto calculation of Income Tax in Calculator Sheet.
• Maximum filed auto entry in Form 16 except payment of Tax.

For Financial Year 2010-11 or Assessment Year 2011-12 (Click Here)

for download  click here  & download

Excel Based Income Tax Calculator for Financial Year 2010-11 (Assessment Year 2011-12)

Friends,

This Utility is totally free for calculation of Income Tax on income of the Financial Year  2010-11 or Assessment Year 2011-12.  

        Some new features in new excel storage based income tax calculator for the Financial Year 2010-11 or Assessment Year 2011-12 is available below.  In the below calculator, data of 500 employees can be stored by default and on using copy and paste function  data of 65000 employees can be stored.

To view the same utility for the Financial Year 2011-12 (click here)

On Line Excel Based Salary Statement

Friends

Plan Income Tax on Your Salary and Deduct proportionate TDS in time

To calculate income tax on the Gross Salary, there is first/general need to know the gross salary amount for salaried persons. I have prepared the salary statement in which anyone can store his salary monthwise. It's main quality is that you have no need to set Salary Statement format. Once you type your basic in first coloumn, all necessary coloumns automatically captured. After than any amount can be changed showing in only white cell. With the help of below excel based sheet calculate your gross salary and plan your income tax with the help of online Income Tax Calculator for the Current Financial Year 2010-11 available at www.fastwroking.blogspot.com

Rebate u/s 89(1)

Friends,

Tax relief when salary received in arrear or in advance

As the arrear of salary relates to 6th pay commission is being received by the employees. When a person/employee receive arrear or any advance in a financial year , he should collect complete information from their employer like as year wise amount of arrear/advance. If you have year wise amount of arrear then you can bifurcate your income year wise. In this way you can save income tax on your income under section 89.

Who is eligible to allow relief u/s 89 (1) Some specified DDO's can allow relief under section 89(1) . List of employers who can allow benefit u/s 89(1), if claimed by employee, is given as under :-

1. company,
2. Co-operative Society
3. Local Authority
4. University,
5. Institution,
6. Association or body
7. Govt State or center
8. Public sector undertaking

Complete detail regarding section 89 is given as under:-

⁴⁵[Relief when salary, etc., is paid in arrears or in advance.

89. Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed⁴⁶.]

The following proviso shall be inserted in section 89 by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010 :

Provided 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, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other, assessment year.

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