guide to salary income tax returns

7/29/2019 Guide to Salary Income Tax Returns

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GUIDE TO SALARYINCOME TAX RETURNS

PRESENTED BY

FORESIGHT MANAGEMENT SERVICES PVT. LTD.

BALARAM COMPLEX, STATION ROADBHUJ-KUTCH-370 001.

PHONE 02832-251066, MOBILE 9825227920,


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MISSION STATEMENT

To provide clients quality services

within the time frame on global basis,through trained, Motivated and highly

skilled personnel & maintainingconfidentiality through highest

Ethical and professional standards

within The purview of code of conduct


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BASIC INFORMATION

What is Salary:

Income under heads of salary is defined as remunerationreceived by an individual for services rendered by him toundertake a contract whether it is expressed or implied.

According to Income Tax Act there are followingconditions where all such remuneration are chargeableto income tax:

When due from the former employer or present employerin the previous year, whether paid or not

When paid or allowed in the previous year, by or onbehalf of a former employer or present employer, thoughnot due or before it becomes due.

When arrears of salary is paid in the previous year by oron behalf of a former employer or present employer, ifnot charged to tax in the period to which it relates.


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What Income Comes Under Head of Salary:

Under section 17 of the Income Tax Act, 1961 there are following incomeswhich comes under head of salary:

Salary (including advance salary)

Wages

Fees

Commissions

Pensions

Annuity

Perquisite

Gratuity

Annual Bonus

Income From Provident Fund Leave Encashment

Allowance

Awards


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What is Leave Encashment:

Leave encashment is the salary received by an

individual for leave period. It is a chargeable incomewhether he is a government employee or not. Undersection 10(10AA) (i) there is also a provision ofexemption in case of leave encashment depending uponwhether he is a government employee or otheremployees.

What is Annuity:

It is an annual income received by the employee from hisemployer. It may be paid by the employer as voluntarilyor on account of contractual agreement. It is not taxableuntil the right to receive the same arises. Under section56, Income Tax Act, 1961 other annuities come under awill or granted by a life insurance company or accruingas a result of contract which comes as income underfrom other sources.


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What is Gratuity:

It is salary received by an individual paid by the employee at the time of hisretirement or by his legal heir in the case of death of the employee.

What is Allowance: It is the amount received by an individual paid by his/her employer in

addition to salary. Under section 15 of the Income Tax Act, 1961 theseallowance are taxable excluding few condition where they are entitled ofdeduction/ exemptions.

Under Income Tax Act following types of allowance are defined

House Rent Allowance:Under sections 10(13A) of Income Tax Act, 1961 allowance is defined as anamount received by an employee paid by his/ her employer as a rent ofhis/her house. It is a taxable income. There is no exemption in tax if he isliving in his own house or house for which he is not paying rent. There arefollowing types of amount which are exempted from tax:

Actual house rent paid by that individual

Rent paid for the accommodation over 10% of the salary

50% of the salary if house is placed at Delhi, Mumbai, Kolkata, Chennai or40% of the salary in it is placed in any other city


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Entertainment Allowance:It is the amount paid by employer for availing entertainmentservices. Under section 16(ii) of Income Tax Act, 1961 it is entitled

to deduction in tax from is salary. But in this case deduction is givento his gross salary which also includes entertainment allowance.Deduction in tax against this allowance can be divided into two parts:

In case of Government employee entitled to minimum deduction of

Entertainment allowance received 20% of basic salary excluding any other allowance

Rs. 5000

In case of other employee entitled to minimum deduction of

(a) Entertainment allowance received

20% of basic salary excluding any other allowance

Rs. 7500 Entertainment allowance received during 1954-1955


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Other Special Allowances

Children Education Allowance

Tribal Area Allowance

Hostel Expenditure Allowance Remote Area Allowance

Compensatory Field Area Allowance

Counter Insurgency Allowance

Border Area Allowance

Hilly Area Allowance Allowances for there is a provision of exempt in income tax are:

Allowance given to a citizen of India, who is a governmentemployee, for rendering services outside India

Allowances given to Judges of High Courts

Allowance given Judges of Supreme Court

Allowances received by an employee of UNO


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What is Perquisite

Under section 17(2) of Income Tax Act, 1961 perquisite is definedas:

Amount paid for the rent-free accommodation provided to theassessee by his employer

Any concession in the matter of rent respecting any accommodationprovided to the assessee by his employer

Any benefit or amenity granted or provided free of cost or atconcessional rate in any of the following cases: By a company to an employee, who is a director thereof

By a company to an employee being a person who has a substantialinterest in the company

By any employer to an employee whose income under the head'Salaries' exceeds Rs.24000 excluding the value of non monetarybenefits or amenities

Any sum paid by the employer in respect of any obligation which, but for

such payment, would have been payable by the assessee Any sum payable by the employer whether directly or through a fund,

other than a recognized provident fund or EPF, to effect an assuranceon the life of the assessee or to effect a contract for an annuity


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There are following perquisites which are tax free:

Medical facility

Medical reimbursement

Refreshments Subsidised Lunch/ Dinner provided by employer

Facilities For Recreation

Telephone Bills

Products at concessional rate to employee sold by his/ her employer

Insurance premium paid by employer

Loans to employees by given by employer

Transportation

Training

House without rent

Residence Facility to member of Parliament, judges of High Court/

Supreme Court Conveyance to member of Parliament, judges of High Court/

Supreme Court

Contribution of employers to employee's pension, annuity schemesand group insurance


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For individuals, HUF, Association of Persons (AOP) and Body ofindividuals (BOI):

For Year 2008-2009

Taxable income slab (Rs.)Rate (%)

Up to 1,50,000 Up to 1,80,000 (for women)Up to 2,25,000 (for resident individual of 65 years or above) NIL1,50,001 - 3,00,000 10

3,00,001 - 5,00,000 20

Above 5,00,000 30*

*A surcharge of 10 per cent of the total tax liability is applicablewhere the total income exceeds Rs 1,000,000.

Note:

Education cess is applicable @ 3 per cent on income tax, inclusiveof surcharge if there is any.

A marginal relief may be provided to ensure that the additional IT

payable, including surcharge, on excess of income over Rs1,000,000 is limited to an amount by which the income is more thanthis mentioned amount.

Agricultural income is exempted from income-tax.


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DETAILS REQUIRED FOR FILING OF

SALARY INCOME TAX RETURN

DETAILS REQUIRED / CHECK LIST FOR THE FILING OF RETURN OF INCOME

FULL NAME WITH SURNAME

DATE OF B I RTH

COPY OF PAN CARD BANK A/C. DETAILS IN CASE OF REFUNDS

BANK NAME

BRANCH NAME

ACCOUNT TYPE & NO.

IF INVESTMENT MADE ARE NOT INCLUDED IN FORM 16 THAN COPY OFPROOF OF INVESTMENT MADE .

FORM 16 ORIGINAL.


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DETAILS REQUIRED FOR PAN

CARD APPLICATION 1 PHOTO COLOR PASSPORT SIZE

SIGNATURE IN FORM

PHOTO IDENTITY PROOF

DRIVING LICENSE/PASSPORT

ADDRESS PROOF LOCAL

EMPLOYEE CERTIFICATE/BANK STATEMENT/PASS

BOOK COPY/OR ANY OTHER VALID LOCAL ADDRESS PROOF

DATE OF BIRTH PROOF

SCOOL LEAVING/ DRIVING LICENSE/PASSPORT


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PROFESSIONAL CHARGES

OUR PROFESSIONAL CHARGES TO BE PAID BY

EMPLOYEE IS RS. 250/- PER EMPLOYEE WHO ARE

HAVING ONLY SALARY INCOME ,

EMPLOYEES HAVING SALARY AS WELL AS

CAPITAL GAIN (I.E. SHARES INCOME) CHARGE FOR

THAT IS RS.1000.00 PER EMPLOYEE

& FOR PAN APPLICATION IS RS. 300/- PER

EMPLOYEE.


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CONCLUSION

To endeavor to build long termrelationship with our clients, by

understanding their businessand helping them to achieve

their goals through our

professional contribution


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guide to salary income tax returns

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