tdsincome tax act

Meaning of Tax Deduction at Source

‘Source’ means the place of origin of an income .the first place from where the income arises, flows or originates is termed as the ‘source of income’ .Income-tax is deducted at source of the income as per provisions of the income-tax Act, 1961. It simply means that the person, paying an income for the first time, is required to deduct income-tax from such income at the prescribed rates. The amount of tax sodeducted should be rounded off to the nearest rupee by ignoring amounts less than fifty paisa and increasing the amount of fifty paisa or more to one rupee. The taxIs so deducted is deposited to the credit of the central government within the Prescribed time in the name of the person from whom the tax has been deducted.The person who deducts such tax issues a certificate to the person concerned Specifying the amount so deducted and the rate at which the tax has been deducted.This is called as ‘deduction of tax at source’. Tax deducted at source been deducted. Such amount is adjusted from the final tax liability of the assesses ascertained on his regular assessment.

Tax Deduction at Source for a Person

PERSON

An individual A Hindu Undivided Family (HUF) A company A firm An association of persons (AOP) or a body of individual (BOI), whether

incorporated or not, for example, a club, a co-operative society etc.; A local authority such as Municipality, Cantonment Board, District Board, Port

Trust etc., and Every artificial juridical person, not falling, within any of the above, for example,

a Hindu idol or a deity (Balaji etc.) or God or Allah. It also includes all artificial persons with a juridical personality such as a corporation Bar council.

Explanation

For the purpose of this clause, an association of persons or a body of individual or a local authority or an artificial juridical person shall be deemed to be a person in all cases. It does not matter whether or not such AOP, or BOI or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains

1

OTHER PROVISIONS

The following provisions are also worth consideration in respect of deduction of taxAt source

1. Income payable “net of tax”[Sec 195-A] Net amount payable*100

100-rate of tax deduction at source2. No deduction of tax at source [Sec 196]

If any sum is payable to any of the following persons, no deduction of tax shall be made by the payer :-

The Government The RBI or A corporation established by or under a Central Act, which is exempt from

income-tax on its income, or A MF specified u/s 10 (23-D). Such sum payable may be interest on

securities or dividend on shares or any other income accruing arising to it.3. Income in respect of units of non-residents [Sec 196-A]4. Deduction of tax on any income in respect of units purchased in foreign

Currency [Sec 196-B]5. Deduction of tax on any income from foreign currency bonds or shares of

Indian company [Sec 196-C]6. Deduction of tax on income of Foreign Institutional Investors from securities

[Sec 196-D]7. Deduction at lower rate [Sec 197]8. No deduction at source in certain cases [Sec 197-A]9. Tax deducted is income received [Sec 198]10. Credit for tax deducted [Sec 199]11. Duty of person deducting tax [Sec 200]12. Consequences of failure to deduct or pay tax [Sec 201]13. Certificate for tax deducted [Sec -203]14. Tax deduction account number ‘TAN’[Sec -203A]15. Furnishing of statement of tax deducted [Sec -203AA]16. Meaning of ‘person responsible for paying’[Sec -204]17. No direct demand from assessee [Sec -205]18. Persons deducting tax to furnish prescribed returns [Sec -206]19. Furnishing of quarterly return in respect of payment of interest to residents

without deduction of tax [Sec -206A]

2

Income Tax Act

SOURCE DEDUCTION REGULATION

[Includes amendments up to B.C. Reg. 235/2007, July 1, 2007]

Contents

1. Interpretation

2. Deduction and remittance

3. Regular remuneration

4. Commissions and salary or wages combined

5. EVCC shares

6. Bonuses, retroactive increases and lump sum payments

7. When deductions are not required

8. Variations in deductions

9. Employees' returns

3

10.Application of other provisions of federal regulations

1. Interpretation

1 (1) In this regulation:

"Act" means the Income Tax Act (British Columbia);

"appropriate percentage" for a year means the lowest percentage specified in section 4.1 (1) of the Act that is applicable in determining tax payable under the Act for that year;

"base credit amount" for a particular year means the greater of

(a) the amount referred to in section 4.3 (1) (c) of the Act [basic personal credit-single status], and

(b) the sum of the amounts that the employee would be entitled to claim for that year under

(i) sections 4.3 [personal credits], 4.31 [age credit] and 4.32 [pension credit] of the Act if the description of A in those sections were read as "is equal to one",

(ii) section 4.51 of the Act [credit for mental or physical impairment] if the description of A in that section were read as "is equal to one" and as if section 118.3 (1) (c) of the federal Act were inapplicable in determining an individual's entitlement to a deduction under section 4.51 (1) of the Act,

(iii) sections 4.6 [tuition credit] and 4.61 [education tax credit] of the Act, if

(A) in applying section 118.5 (1) of the federal Act for purposes of section 4.6 of the Act, section 118.5 (1) of the federal Act were read without the expression "an amount equal to the product obtained when the appropriate percentage for the year is multiplied by",

(B) the description of A in section 4.61 of the Act were read as "is equal to one", and

(C) the amount, if any, by which the total amount of all scholarships, fellowships and bursaries that the employee claims to expect to receive in the year exceeds $3 000 were subtracted from the total of the amounts determined under sections 4.6 and 4.61 of the Act as modified by clauses A and B of this definition,

4

(iv) section 4.65 of the Act [transfer of unused credits to spouse or common law partner], if the formula A + B ? C were read as

A + B

D

where

D is the appropriate percentage for the year, and

(v) section 4.67 of the Act [transfer of unused credits to parent or grandparent], if the formula A-B in section 4.66 of the Act were read as

A

C

where

C is the appropriate percentage for the year;

"employee" means a person receiving remuneration who reports for work at an employer's establishment in British Columbia;

"employer", "estimated deductions", "pay period", "remuneration" and "total remuneration" each has the same meaning as in section 100 of the federal regulations;

"federal regulations" means the Income Tax Regulations under section 221 (1) of the federal Act, as amended from time to time;

"year" means a calendar year.

(2) Amounts expressed in dollars in the Act that are relevant to the definition in this section of "base credit amount" and are subject to an annual adjustment under section 4.52 of the Act [indexing] are subject to the same annual adjustment for the purpose of that definition.

(3) For the purposes of this regulation, section 100 (3), (3.1), (3.2) and (4) of the federal regulations applies.

(4) A reference in this regulation to a provision of the federal regulations referred to in subsection (3) or in section 10 (1) is a reference to that provision of the federal regulations as it applies for the purposes of this regulation.

5

2. Deduction and remittance

Every person who makes a payment described in section 153 (1) of the federal Act, as that section applies for the purposes of the Act, to an employee must deduct or withhold from that payment, and remit to the Receiver General of Canada, the amount, if any, that is determined under this regulation.

3. Regular remuneration

(1) Subject to subsection (3) and sections 4 to 8 and to section 109 of the federal regulations, the amount to be deducted or withheld under section 2 of this regulation for a pay period in which the employer makes a payment of remuneration to an employee is determined by the formula

A

B

where

A is the employee?s notional tax for the year in which the payment is made, and

B is the maximum number of such pay periods in that year.

(2) For the purposes of this section,

(a) an employee?s notional tax for the year is the amount determined by the formula

C ? D

where

C is the amount of tax that would be determined under section 4.1 (1) of the Act for the year if the employee?s notional remuneration for that year were the employee?s taxable income for the year, and

D is the total of

(i) the employee?s BC tax credit amount, and

(ii) the amount that the employee would be entitled to claim under section 4.301 of the Act for the year if the employee?s notional remuneration for that year were the employee?s income for the year,

6

(b) an employee?s notional remuneration for the year is the amount determined by the formula

E x F

E x F

where

E is the amount that is the mid-point of the applicable range of remuneration specified in Schedule 1 for the pay period in which the payment falls, and

F is the maximum number of such pay periods in that year, and

(c) the employee?s B.C. tax credit amount is the amount determined by the formula

G x [H + I + J]

where

G is the appropriate percentage for the year,

H is,

(i) if the employee is resident in Canada at the time of the payment, the amount specified in Schedule 2 as the mid-point of the range of amounts within which the employee?s base credit amount falls, and

(ii) if the employee is not resident in Canada at the time of the payment, nil.

I is the employee?s notional remuneration for the year multiplied by the employee?s premium rate for that year under the Employment Insurance Act (Canada), not exceeding the maximum amount of the premiums payable by the employee for the year under that Act, and

J is the employee?s notional remuneration for the year less the amount for that year determined under section 20 of the Canada Pension Plan multiplied by the employee?s contribution rate for the year under that Act or under a provincial plan as defined in section 3 of that Act, not exceeding the maximum amount of such contributions payable by the employee for the year under the plan.

(3) The amount determined under subsection (1) must be rounded to the nearest multiple of 5?, or, if that amount is equidistant from 2 such multiples, to the higher multiple.

(4) Amounts expressed in dollars in section 4.1 (1) of the Act that are subject to an annual adjustment under section 4.52 of the Act [indexing], are subject to the same annual adjustment in determining the employee?s notional tax for the purposes of this section.

7

4. Commissions and salary or wages combined

(1) Subject to sections 5 to 8 of this regulation and to section 109 of the federal regulations, if an employee has made an election under section 107 (2) of the federal regulations and has not revoked that election, the amount to be deducted or withheld under section 2 of this regulation by the employer from any payment of remuneration to that employee is the amount determined by the formula

A x B

where

A is the amount of the payment, and

B is the employee's notional tax rate.

(2) For the purposes of this section,

(a) an employee?s notional tax rate is, subject to subsection (3), the amount determined by the formula

C

D

where

C is the employee's notional tax, and

D is the employee?s total remuneration for the year,

(b) an employee?s notional tax is the amount determined by the formula

E ? F

where

E is the amount of tax that would be determined under section 4.1 (1) of the Act for the year if the employee?s net notional remuneration for that year were the employee?s taxable income for the year, and

F is the total of

(i) the employee?s BC tax credit amount, and

8

(ii) the amount that the employee would be entitled to claim under section 4.301 of the Act for the year if the employee?s net notional remuneration for that year were the employer?s income for the year,

(c) an employee?s total remuneration for the year is the amount recorded as such by the employee on the return filed under section 107 (2) of the federal regulations,

(d) an employee?s net notional remuneration is the amount determined by the formula

D ? H

where

D is the employee?s total remuneration for the year, and

H is the employee?s expenses for the year as recorded by the employee on the return filed under section 107 (2) of the federal regulations, and

(e) an employee?s B.C. tax credit amount is the amount determined by the formula

I x [J + K + L]

where

I is the appropriate percentage for the year,

J is

(i) if the employee is resident in Canada at the time of the payment, the employee?s base credit amount for the year as recorded by the employee on the return filed under section 9, and

(ii) if the employee is not resident in Canada at the time of the payment, nil,

K is the employee?s total remuneration for the year multiplied by the employee?s premium rate for the year under the Employment Insurance Act (Canada), not exceeding the maximum amount of the premiums payable by the employee for the year under that Act, and

L is the employee?s total remuneration for the year less the amount for the year determined under section 20 of the Canada Pension Plan multiplied by the employee?s contribution rate for the year under that Act or under a provincial plan as defined in section 3 of that Act, not exceeding the maximum amount of such contributions payable by the employee for the year under the plan.

9

(3) For the purposes of this section, the amount determined under subsection (2) (a) is to be rounded to 2 places after the decimal by

(a) adding .005 to the first 3 digits after the decimal, and

(b) dropping the third digit from the total obtained under paragraph (a).

(4) Amounts expressed in dollars in section 4.1 (1) of the Act that are subject to an annual adjustment under section 4.52 of the Act [indexing], are subject to the same annual adjustment in determining the employee?s notional tax for the purposes of this section.

5. EVCC shares

(1) If in a year an employer deducts from a payment of remuneration to an employee an amount in respect of the acquisition by the employee of an EVCC share, there must be deducted from the amount determined under section 3 (1) or 4 (1), as the case may be, in respect of that payment the smaller of

(a) 15% of the amount deducted or withheld in respect of the acquisition of the share, and

(b) the amount determined by the formula

A ? B

where

A is $2 000, and

B is the total of all deductions made under this subsection in respect of prior pay periods in that year.

(2) In this section, "EVCC share" means a share of a corporation registered under Part 2 of the Employee Investment Act as an employee venture capital corporation.

6. Bonuses, retroactive increases and lump sum payments

(1) If in any year a payment for a bonus or retroactive increase in remuneration is made by an employer to an employee whose total remuneration from the employer, including the bonus or retroactive increase, may reasonably be expected not to exceed $5 000 in that year, the amount to be deducted or withheld under section 2 by the employer from the payment is 5% of the payment.

10

(2) If, in any pay period in a year, a payment for a bonus is made by an employer to an employee whose total remuneration from the employer, including the bonus, may reasonably be expected to exceed $5 000 in that year, the amount to be deducted or withheld under section 2 by the employer from the payment is the amount determined by the formula

A x [B ? C]

where

A is the maximum number of such pay periods in that year,

B is the amount determined under section 3 for an assumed remuneration equal to the sum of

(a) the amount of regular remuneration paid by the employer to the employee in the pay period in which the bonus payment is made, and

(b) an amount equal to the bonus payment divided by the number of pay periods in that year, and

C is the amount determined under section 3 in respect of the amount of regular remuneration paid by the employer to the employee in the pay period in which the payment is made.

(3) If in any year a payment for a retroactive increase in remuneration is made by an employer to an employee whose total remuneration from the employer, including the retroactive increase, may reasonably be expected to exceed $5 000 in that year, the amount to be deducted or withheld under section 2 by the employer from the payment is the amount determined by the formula

D x [E ? F]

where

D is the number of pay periods for which the increase in remuneration is retroactive,

E is the amount determined under section 3 for the new rate of remuneration, and

F is the amount determined under section 3 for the previous rate of remuneration.

(4) Subject to subsection (5), if a lump sum payment as defined in section 103 (6) of the federal regulations is made by an employer to an employee who is a resident of Canada, the amount to be deducted or withheld under section 2 of this regulation by the employer from the payment is as follows:

11

(a) 3% of the payment, if the payment does not exceed $5 000;

(b) 7% of the payment, if the payment exceeds $5 000 but does not exceed $15 000;

(c) 10% of the payment, if the payment exceeds $15 000.

(5) If the lump sum payment referred to in subsection (4) is pension income or qualified pension income of the employee to which section 4.32 of the Act would apply if the definition "pension income" in subsection 118 (7) of the federal Act were read without reference to paragraph (a) (ii) and (iii) of that definition, the payment is deemed to be the amount of the payment minus,

(a) if the payment does not exceed $30 004, the smaller of $1 000 and the amount of the payment,

(b) if the payment exceeds $30 004 and does not exceed $60 009, the amount determined by the formula

A$1 000 x

B

where

A is the appropriate percentage, and

B is the percentage in section 4.1 (1) (b) (ii) of the Act that is applicable in determining tax payable under the Act for the year in which the payment is made,

(c) if the payment exceeds $60 009 and does not exceed $70 000, the amount determined by the formula

A$1 000 x

B

where


B is the percentage in section 4.1 (1) (c) (ii) of the Act that is applicable in determining tax payable under the Act for the year in which the payment is made,

(d) if the payment exceeds $70 000 and does not exceed $85 000, the amount determined by the formula

12

A$1 000 x

B

where


B is the percentage in section 4.1 (1) (d) (ii) of the Act that is applicable in determining tax payable under the Act for the year in which the payment is made, or

(e) if the payment exceeds $85 000, the amount determined by the formula

A$1 000 x

B

where


B is the percentage in section 4.1 (1) (e) (ii) of the Act that is applicable in determining tax payable under the Act for the year in which the payment is made.

(6) An amount that

(a) is expressed in dollars in subsection (5), and

(b) is the same as an amount in section 4.1 of the Act that is subject to adjustment under section 4.52 of the Act [indexing],

is subject to the same annual adjustment for the purposes of subsection (5) of this section.

(7) For the purposes of subsection (5) (b) to (e), the amount determined by the formula must be rounded to the nearest multiple of one dollar, or, if that amount is equidistant from 2 such multiples, to the higher multiple.

7. When deductions are not required

No amount is required to be deducted or withheld under this regulation from a payment in respect of an employee who was neither employed nor resident in Canada at the time of the payment, except in respect of

13

(a) remuneration described in section 115 (2) (e) (i) of the federal Act that is paid to a non-resident person who has in the year in which the payment is made, or who had in any previous year, ceased to be a resident of Canada, or

(b) remuneration reasonably attributable to the duties of any office or employment performed or to be performed in Canada by the non-resident person.

8. Variations in deductions

(1) This section applies to a payment of remuneration by an employer to an employee if

(a) the payment is made in respect of a period for which no provision is made in Schedule 1, or

(b) the payment is made for a pay period referred to in Schedule 1, and the amount of the payment is greater than any amount provided for in that schedule for that pay period.

(2) In the circumstances described in subsection (1), the amount to be deducted or withheld under section 2 from the payment of remuneration is the amount determined by the formula

BA x

C

where

A is the amount of the payment,

B is the tax reasonably expected to be payable under the Act by the employee on the total remuneration reasonably expected to be paid by the employer to the employee for the year in which the payment is made, and

C is the total remuneration referred to in the description of B.

9. Employees' returns

If an employee is required under section 227 (2) of the federal Act as it applies for the purposes of this regulation to file a return with the employer,

14

(a) the return must be in the form authorized by the Minister of Finance and Corporate Relations,

(b) the return must be filed with the employer when the employee commences employment with that employer, and

(c) a new return in the same form must be filed within 7 days after the date of any event that may reasonably be expected to change the employee's base credit amount for the year.

10. Application of other provisions of federal regulations

(1) The following provisions of the federal regulations apply for the purposes of this regulation:

(a) section 102 (5) [previously reported commissions];

(b) section 104 (3), (3.01), (3.1) and (4) [payments out of or under an RRSP during lifetime of annuitant];

(c) section 104.1 [lifelong learning plan];

(d) section 107 (2) and (3) [election to file form relating to commissions and revocation of election];

(e) section 108 [remittances to Receiver General];

(f) section 109 [election to increase deductions], except that, in addition to any other necessary modifications, a reference in that section to "the form prescribed by the Minister" is to be read as a reference to "the form authorized by the Minister of Finance and Corporate Relations";

(g) section 110 (1) [prescribed persons for purposes of remittances].

(2) Section 100 (2) and (5) of the federal regulations does not apply for the purposes of this regulation.

e-TDSEntities (both corporate and non-corporate deductors) making payments (specified under Income Tax Act) to third parties (deductees) are required to deduct tax at source (Tax Deducted at Source -TDS) from these payments and deposit the same at any of the designated branches of banks authorised to collect taxes on behalf of Government of

15

India. They should also furnish TDS returns containing details of deductee(s) and challan details relating to deposit of tax to ITD.

As a part of automation of collection, compilation and processing of TDS returns ITD has notified an "Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003". It is applicable to all deductors furnishing their TDS return in electronic form. As per this scheme:

It is mandatory (w.e.f. June 1, 2003) for corporate deductors to furnish their TDS returns in electronic form (e-TDS return).

From F.Y. 2004-2005 onwards furnishing TDS returns in electronic form is also mandatory for government deductors in addition to corporate deductors.

Deductors (other than government and corporates) may file TDS return in electronic or physical form.

National Securities Depository Ltd. (NSDL) as the e- TDS Intermediary (appointed by ITD) receives, on behalf of ITD, the e-TDS returns from the deductors.

Deductors can submit e-TDS returns through TIN-Facilitation Centres (TIN-FC) established by NSDL or directly upload through NSDL web-site.

e-TCSTCS means collection of tax at source by the seller (collector) from the buyer (collectee/payee) of the goods (specified u/s 206C of Income-tax Act, 1961, like timber obtained under forest lease, scrap, any other forest produce not being timber or tendu leaves etc.,). For e.g. if purchase value of goods is Rs.10,000/-, the buyer will pay an amount of Rs.10,000/- + X (X being the value of TCS as prescribed under Income-tax Act, 1961) to the seller. The seller will deposit the tax collected at source (TCS) at any of the designated branches of the authorised banks.

Following the automation of TDS returns in 2003, ITD has now notified an "Electronic Filing of Returns of Tax Collected at Source Scheme, 2005". It is applicable to all deductors furnishing their TCS return in electronic form. As per this scheme:

It is mandatory for corporate and government deductors to furnish their TCS returns in electronic form (e-TCS return) from F.Y. 2004-2005 onwards.

Deductors (other than government and corporates) may file TCS return in electronic or physical form.

NSDL as the e-TCS Intermediary (appointed by ITD) receives, on behalf of ITD, the e-TCS returns from the deductors.

REVISED FORMS AND FILE FORMATS FOR e-TDS/e-TCS RETURNSFinancial Year Form Periodicity Remarks2002-20032003-2004 24 - TDS26 - TDS27 - TDS Annual AnnualQuarterly Corporates - mandatory to file in electronic form

16

http://www.tin-nsdl.com/downloads/eTCSreturnsNotification1212005.pdf

http://www.tin-nsdl.com/downloads/eTCSreturnsNotification1212005.pdf

http://www.tin-nsdl.com/downloads/relatednotificationsfromincometaxdepartment.pdf

Other deductors - may file in electronic form or in physical form

Form 27A to be filed in physical form with each return submitted through TIN-FC 2004-2005*Revised 24 - TDSRevised 26 - TDSRevised 27 - TDS27E - TCS Annual AnnualQuarterlyAnnual Corporates, GovernmentDepartments / Organisations - mandatory to file in electronic formOther deductors - may file in electronic form or in physical form

Form 27A to be filed in physical form with each e-TDS return and Form 27B to be filed in physical form with each e-TCS return submitted through TIN-FC 2005-2006** 24Q - TDS26Q - TDS27Q - TDS27EQ - TCS QuarterlyQuarterlyQuarterlyQuarterly Corporates, GovernmentDepartments / Organisations - mandatory to file in electronic formOther deductors - may file in electronic form or in physical form

Form 27A to be filed in physical form with each return submitted through TIN-FC

*Forms for TDS/TCS returns have been revised by ITD. Corresponding file formats for e-TDS (Form 24, 26, 27) and e-TCS (Form 27E) have been notified by ITD and have come into effect from May 1, 2005. **e-TDS/e-TCS returns will be filed quarterly for F.Y. 2005-2006. The file formats for quarterly returns (Forms 24Q, 26Q, 27Q and 27EQ) have been notified by the ITD and have been made available on NSDL web-site.

Deductors furnishing e-TDS/ e-TCS returns are required to furnish a control chart - Form 27A/ 27B in physical form along with the e-TDS/e-TCS return furnished in CD/floppy.

Form 27A is a summary of TDS return (Form 24, 26 or 27), which contains control totals of 'Amount Paid' and 'Income tax deducted at source'.

Form 27B is a summary of e-TCS return (Form 27E) which contains 'Amount Paid' and 'Income Tax Collected at Source'. The control totals mentioned on Form 27A/ 27B should match with the corresponding control totals in e-TDS/e-TCS return file. Form 27A is required to be furnished separately for each TDS return (Form 24, 26 or 27). Form 27B is required to be furnished separately for each TCS return (Form 27E)

Procedures and guidelines for preparing and furnishing e-TDS/e-TCS return are given in Deductors Manual available at downloads section.

17

http://www.tin-nsdl.com/files/revisedFormN-27A.pdf

http://www.tin-nsdl.com/files/formn-27EQ.pdf

http://www.tin-nsdl.com/files/formn-26Q.pdf

http://www.tin-nsdl.com/files/formn-24Q.pdf

http://www.tin-nsdl.com/files/revisedFormN-27B.pdf

http://www.tin-nsdl.com/files/revisedFormN-27A.pdf

http://www.tin-nsdl.com/files/revisedform27E.pdf

http://www.tin-nsdl.com/files/revisedform27.pdf



NSDL has developed a freely downloadable utility called File Validation Utility to verify whether the e-TDS/e-TCS return files prepared by the deductors/ collectors conform to the prescribed format.

18

http://www.tin-nsdl.com/eTDSfvu.asp

Nature of Payment/ Section

Rate of TDS

When to deduct

Time of Deposit to

Central govt.

Grant of TDS

certificate

Annual Returns relating toTDS

Person responsible

for deduction

Form No.

Time Limit

1.

Salary + Value of perquisites (Sec. 192)

Average tax rate

On payment

By Govt. A/c same day By others within 7 days

Form 16 within 30th April

24 May-31 Employer/Principal Officer/ Payer/ DDO

2.

Interest (Sec. 194A)

Company- 20%

Others - 10%

On payment / credit whichever is earlier

One week from end of month

Form 16A within 1 month

26A June-30 Employer/Principal Officer/ Payer/ DDO

3.

Contract/ Sub contract (Sec. 194C)

Contract-2% Sub-contract-1% Advert. 1%




26C June-30 Employer/Principal Officer/ Payer/ DDO

4.

Insurance commission (Sec. 194D)

10% On payment / credit whichever is earlier


Form 16A within 30th April

26D June-30 Employer/Principal Officer/ Payer/ DDO

5.

Rent payment (Sec. 194I)

Individuals/HUFs-15% Others- 20%




26J June-30 Employer/Principal Officer/ Payer/ DDO

6.

Fees to Professional (Sec. 194J)

5% On payment / credit whichever is earlier



26K June-30 Employer/Principal Officer/ Payer/ DDO

7.

Payment to non-residents (Sec. 195)

As per Part-II 1st Schedule




27 Within 14 days from end of quarter

Employer/Principal Officer/ Payer/ DDO

8.

Repayment of NSS

20% On payment

On the day of deduction

Form 16A within 1

26F June-30 Employer/Principal

19

http://incometaxmumbai.nic.in/forms/f16a.htm







http://incometaxmumbai.nic.in/forms/f24.htm


etc. (Sec. 194-EE)

month Officer/ Payer/ DDO

9.

Int. on Securities (Sec 193)

10% On payment/ credit whichever is earlier

One week Form 16A within one month

25 June 30 Govt. State/ Central/ Local Auth./ Corpn./ Co. etc.

10.

Dividend (Sec. 194) up to 31-5-97

20% Before payment or distribution

Within 7 days Form 16A within one month

26 April 30 Principal Officer/ Payer

11.

Lottery/ Crossword (Sec. 194B)

40% On Payment


26B May 31 Principal Officer/ Payer

12.

Horse Race (Sec. 194BB)

40% On Payment


26BB May 31 Principal Officer/ Payer

13.

Re-purchase of units by mutual funds or UTI (Sec. 80CCB/ 194F)

20% On Payment

Within one week of deduction

Form 16A within one month

26G June 30 Principal Officer/ Payer

14.

Commission on Lottery tickets (Sec. 194G)

10% On Payment

By Govt. same day, by others within 7 days


26H June 30 Principal Officer/ Payer

15.

Income from units of mutual funds (Sec. 194K)

Company-20% Others- 15%

On Payment


26 April 30 Principal Officer/ Payer

16.

Non resident Sportsman

10% On Payment/ credit

Govt. a/c same day, by others one


27 Within 14 days from

Principal Officer/ Payer

20












/ Sports asso./Inst. (Sec. 194E)

week from end of month

end of quarter

17.

Units of Non-residents except Co.

(Sec. 196A) w.e.f. 1-7-95 (if acquired out of NRI a/c by Ind./HUF)

20%

NIL

On Payment/ credit

Govt. a/c same day, by others one week from end of month




18.

Income from units (As per Sec. 115AB/ 196B) w.e.f. 1-6-92






19.

Intt/Div/LTCG income of N.R. (Sec. 115AC & 196C) w.e.f.1-6-93






20.

Income of FII from securities (Sec. 115AD & 196D) w.e.f. 1-6-93






21





IMPORTANT NOTES :

1. Sec. 192 - Salary A] Rate of Tax for F.Y. 2007-08 1,00,000 - 150,000 10% 60,001-1,50,000 - 20% above 1,50,000 - 30%

2. Sec. 194A A] Limit of interest in case of term deposits exceeding Rs. 10,000/- B] In other cases : Rs. 2,500/-

3. Sec. 194B- Horse Race Payment exceeding Rs. 2,500/-

4. Sec. 194B- Lottery/ Puzzle Payment exceeding Rs. 5,000/-

5. Sec. 194C - Contractors/ Subcontractors includes Broadcasting, telecasting, carriage of goods and passengers by any mode other than Rly. and chartering a plane.Payment for advertisement contracts

exceeding Rs. 20,000

6. Sec. 194D - Insurance Commission In excess of Rs. 5,000 in a F.Y.

7. Sec. 194E- Non Resident Sportsman/ Institution Return within 45 days from end of quarter/ within 2 months & 14 days from end of F.Y.

8. Sec. 194EE - Repayment of NSS If exceeds Rs. 2,500 p.a.

9. Sec. 194G- Lottery ticket Commission exceeding Rs. 1,000/-

10. Sec 194I - Rent Payment Exceeding Rs.1,20,000 p.a.

11. Sec. 194J - Payment to professional/ technical Exceeding Rs. 20,000 p.a.

22

services

12. Sec. 194K- as per section 10(23D) exceeding Rs. 10,000/- w.e.f. 1-7-95.

13. Sec. 195 - Any payment except interest on security to non-resident.

14. Payee/ Principal Officer stands for any person responsible for payment of disbursement to the fund.

15. Penal Provisions:

1] Failure to deduct tax at source on average rate/ applicable rate

Sec. 201(1) & Interest 15% p.a. u/s. 201(1A) Penalty u/s. 221, 271C equal to amount of tax not deducted.

2] Failure to deposit tax deducted Interest u/s. 201(1A), Penalty u/s. 221, Prosecution u/s. 276B, RI 3 months to 7 years & fine.

3] Failure to issue TDS certificate Sec. 272A(2)(g) Rs.200 per day max. Rs. 100 per day minimum per certificate

4] Failure to submit Returns/ Statement Sec. 272A(2)(c) Rs.200 per day max. Rs. 100 per day minimum per certificate

5] Failure to recover tax and pay u/s. 226(2) Sec. 272A(2)(h) Rs.200 per day max. Rs. 100 per day minimum per certificate

6] Failure to deliver declaration to CIT/ CCIT u/s. 197A within 7th of next month

Sec. 272BB Rs.5000 maximum

16. The TDS provisions form Sec. 192 to 206B of Income-Tax Act may be referred.

17. Form No. 27 on payment of NRI to be filled within 14 days of end of the quarter, in case of last day of Accounting year after expiry of 2 months and 14 days.

18. A consolidated certificate in form no. 16A for F.Y. may be issued within one month from the end of F.Y. at the request of payee.

19. TDS out of actual payment on March 31 or on the last day of F.Y. is to be deposited by 7th April or 7th of the first month of next financial year.

20. TDS out of amount credited only in books (excluding actual amount paid) is to be deposited by 31 May or within two months from the end of F.Y. as the case may be.

21. Certificate to be issued in form No. 16/ 16A within 2 months and 7 days from end of F.Y. in case of amount credited on last day of financial year.

23

OBLIGATION OF TAX DEDUCTORS AND PROCEDURES TAN (TAX DEDUCTORS ACCOUNT NUMBER)

1. Compulsory for all those who are responsible for deduction of tax. (Refer TDS at a Glance for nature of payments requiring TDS) 2. Application to ITO, TDS for TAN - in form No.49-B in duplicate [See Rule 114(A)] 3. Only one TAN is required for different types of deductions. 4. TAN number must be quoted properly on all Challans, Returns, Form No.16/16A and in all correspondences with Income-tax Department. 5. TAN number consists of 8 digits. 6. First Alphabet - denotes first alphabet of name which is followed by next Four/Five numeric digits and One alphabet. 7. There is a bracket ( ) after last alphabet and bracket() should be fill-up in the following manner. The alphabet in bracket indicates nature of payment and is very important. Following alphabet should be used within bracket() while filing of different returns under TDS.

( S ) for SALARY

( I ) for INTEREST

( N ) for INSURANCE COMMISSION

( T ) for INTEREST ON SECURITIES

( D ) for DIVIDEND

( L ) for LOTTERY

( H ) for WINNING FROM HORSE RACE

( C ) for CONTRACT

( F ) for OTHER TYPES OF PAYMENT

For example :

TAN No. for Bhonsle Brothers may be B-66167-A( ) ( ) should be filed by (S) while filing salary return in Form No.24 u/s such as S-55867-A(S)

In the return for interest u/s.194A the TAN No.will be quoted as S-55867-A(I)

In the return for contracts the TAN No. will be quoted as S-55867-A(C)

24

>> The alphabets shall be changed within the bracket for each return and for each type of payments while the remaining portion of TAN No. will be same. >> Use correct alphabet in ( ) of TAN No. for different types of payments. >> Use correct TAN No. on Challans and in all correspondences accordingly. >> Do not change, after TAN Number in any circumstances which is out of bracket ( )

TAN NUMBER MUST BE QUOTED ON

1. All the Challans - payment for TDS (as per Sec.200) 2. All Certificates - Issue in form No.16/16A (Sec. 203 r.w.r.31) 3. All Returns - Required under TDS u/s.206 4. All other documents and correspondence with TDS range/ITO, TDS

CONSEQUENCES OF FAILURE TO APPLY OR QUOTE TAN NUMBER

Penalty up to Rs.5,000 for each defaults u/s.272BB

PROCEDURE FOR DEDUCTION OF TAX ON PAYMENTS OR CREDITS

Step:1

Deduction at Source is to be made on disbursement or credit whichever is earlier. Identify the different heads under which the payments are liable to TDS on

disbursement/ payment or credit. Deduct the taxes as per applicable rates. Deposit the taxes deducted to Central Government Account within due dates. Use correct challans for payment of TDS to the Government Account. Challans

are

i. ITNS-269 (RED) for TDS on payments to Companies. ii. ITNS-271 (BLUE) for TDS on payments to other than companies.

Fill-up all the columns of the challans correctly specifying the designation of jurisdictional ITO-TDS, TAN No.

Refer "TDS at a Glance" for assistance or any clarifications.

TDS CERTIFICATES & RETURNS

Step:2

Issue certificate to the payees in form No.16/16A within the stipulated time limit (refer TDS at a Glance and Rule 31 of I.T. Rules, 1962 for assistance).

Do file the return of TDS in the prescribed form within the prescribed time limit. (refer TDS at a Glance and 37A of I.T. Rules, 1962)

25

Use the correct form no. for each TDS return to be filed on different types of payments.

Fill-up all the columns of the TDS returns positively specifying the full name and designation of the person signing the return.

Do mention ‘NOT APPLICABLE’ if a particular column is not relevant but do not leave it blank.

Do enclose one counter part of original challan with the return of TDS for the TDS paid.

Enclose one copy of form no. 16/16A with the TDS return (Refer Circular No.632,654,666 & I.T. fourth amendment Rules, 1997 w.e.f. 19.03.97).

DEDUCTION OF TDS OUT OF SALARY PAYMENTS

Step:3

For TDS on salary payments - work out the anticipated salary of each employee on the basis of previous years salary in the beginning of the year.

Take care of anticipated increase in salary of each employee during the current year while forming the estimate of the salary payments to be made during the year.

Work out the tax to be deducted at source on the anticipated salary at the prescribed rates and divide the same by 12.

Deduct 1/12 of the tax in every month from the 1st month of the financial year i.e. April.

Increase the amount of monthly TDS from the month in which any unforeseen increase is made to the salary of any employee on account of any Bonus, Arrears of Salary, Dearness Allowance, etc. which could not be foreseen in the beginning of the year.

Reduce the TDS amount in the last quarter or month if any excess deduction made in the earlier months.

Do obtain necessary evidences for savings/payments before allowing credit for granting of rebate/ deductions.

Please write short note with the TDS return on variations of TDS made in different months specifying the reasons for increased TDS deduction during the close of the year,specially if TDS is not made in equal installments during the 12 months.

Pay interest @ 15% per annum u/s.201(1A) of the Income-tax Act on differed payments i.e. on TDS amount which was deductible in the initial months of the financial year from the month in which TDS was due to the date of payment of such TDS amount.

Deductions / Rebates to be considered by DDOs for determining TDS liability on salary payments to employees.

A. DEDUCTION FROM GROSS TOTAL INCOME

26

1. Amount paid/deposited towards annuity plan of LIC for receiving pension from the fund – maximum Rs.10,000 in a year (Section 80CC)

2. Amount paid by cheque towards Mediclaim upto Rs.10,000 (80D) 3. Amount paid for medical treatment of handicapped dependent upto Rs.40,000

(See Section 80DD for details and Rule 11A). 4. Deduction for expenditure on medical treatment of certain disease or ailment for

assessee himself or dependent upto Rs.15,000. (Refer Section 80DDB Rule 11DD for conditions, details, etc.)

5. Re-payment of loan taken for higher education upto Rs.25,000 (for conditions and details refer Section 80E of I.T. Act, 1961)

6. No deduction for donations to be considered except, after verification of payments to made to the followings @ 50%:

a. National Defence Fund b. Jawaharlal Nehru Memorial Fund c. The Prime Minister’s Draught Relief Fund d. The National Children's Fund e. The Indira Gandhi Memorial Trust & f. The Rajiv Gandhi Foundation

@ 100%

1. The Prime Minister’s National Relief Fund 2. The Prime Minister’s Armenia Earthquake Relief Fund 3. The Africa (Public Contributions - India) Fund 4. The National Foundation for Communal Harmony 5. Chief Minister's Earthquake Relief Fund, Maharashtra 6. National Blood Transfusion Council 7. State Blood Transfusion Council 8. Army Central Welfare Fund 9. Indian Naval Benevolent Fund 10. Air Force Central Welfare Fund 11. The Andhra Pradesh Chief Minister's Cyclone Relief Fund - 1996 12. The National Illness Assistance Fund 13. The Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund, in respect

of any state or Union Territory as the case may be, Subject to certain conditions. 14. The University or educational Institution of national eminence approved by the

prescribed authority. 15. The National Sports Fund to be set up by Central Government. 16. The National Cultural Fund set up by the Central Government.

7. Deduction on account of rent paid by employee for his own residence (to the extent and as per the conditions laid down in Section 80GG of the Act)

8. Deduction of Rs.40,000 u/s. 80U of the Act for handicapped/disabled persons after satisfying the conditions laid down.

27

9. Interest payable on House building loan is allowable u/s.24(1)(VI) to the extent of Rs.30,000 in a financial year under the head income from house property. The loss under the head ‘income from House Property’ due to payment of interest on loan taken for House building is allowable upto Rs.30,000 in a year. The deduction from salary on this account is to be granted after obtaining Form No. 12C from the employee (refer section 192 (2B) for details).

B. REBATE FROM TAX (U/S. 88) (20% OF INVESTMENT/ CONTRIBUTION)

1. Contribution towards – PPF, GPF, approved superannuation fund, LIC, PLI, etc. 2. Investment in NSC, VI, VII & VIIIth issue and accrued interest on VI & VIIIth

issue of NSCs. 3. Contribution to ULIP, 1971. 4. Deposits in 10 or 15 years A/c. under the Post Office Savings Bank (CTD) rules,

1959. 5. Repayment of HBA Loan not exceeding Rs.10,000 for purchase/construction of a

residential house. 6. Subscription to any units of any mutual fund referred to in Section 10(23) and

approved by CBDT. 7. National Saving Scheme notified by Government and other deductions. (for

details refer Sec.88)

Rebate on investment upto Rs.60,000/- @ 20% to be allowed. Extra 10,000 for investment in debentures or equity shares of public companies engaged in infrastructure and units of mutual fund as approved investing in eligible issue of any company is to be considered for rebate @ 20%.

e.g. Tax Savings Bonds of ICICI

Note: The DDOs must ensure and obtain necessary proof/evidences required to satisfy the genuineness of allowances before allowing above deductions from salary or rebate from tax payable on account of above investments/deposits. The particular section and relevant rule should be referred to ensure correct determination of TDS to be made.

REFUND ON EXCESS TDS BY DDO’S

For excess TDS U/s.192 to 194D – refer circular No.85 dt.21.10.80 and For excess TDS U/s.195 – refer circular No.769 dt. 6.8.98

28

Various Section of Tax Deduction at Source

Tax Deduction at Source from Salary [Sec.192]Tax Deduction at Source from interest on securities[Sec.193Tax Deduction at Source from Dividends [Sec.194]Tax Deduction at Source from interest other than interest on securities [Sec.194A]Tax Deduction at Source from winnings from lotteries or crossword puzzles [Sec.194B]Tax Deduction at Source from winnings from horse races [Sec.194BB]Tax Deduction at Source from payments to contactors or sub-contractors [Sec.194C]Tax Deduction at Source from insurance commission [Sec.194D]Tax Deduction at Source from payment to non-resident sportsmen or sports associations [Sec.194E]Tax Deduction at Source from payments in respect of National Saving Scheme [Sec.194EE]Tax Deduction at Source on payments on account of repurchase of units of Mutual Funds or UTI [Sec.194F]Tax Deduction at Source from commission,etc.,on sale of lottery tickets [Sec.194G]Tax Deduction at Source from commission or brokerage [Sec.194H]Tax Deduction at Source from rent[Sec.194-I]Tax Deduction at Source on fees for professional or technical services [Sec.194J]

29

Tax Deduction at Source from payment of compensation on acquisition of certain immovable property [Sec.194LA]Tax Deduction at Source from other sums[Sec.195]Tax Deduction at Source from units or long-term capital gain under section [Sec.196B]Tax Deduction at Source from income or long-term capital gain from foreign currency bonds/Global Depository Receipts [Sec.196C]Tax Deduction at Source from income of foreign Institutional Investors from securities [Sec.196D]

30

Tax Deduction at Source from Salary [Sec.192]

Who is payer EmployerWho is the recipient Employee

Payment covered Taxable salary of the employee At what time tax has to be deducted at source

At the time of payment

Maximum amount which can be made with out tax deduction

The amount of exemption limit (i.e. Rs. 1,45,000/Rs. 1,95,000/Rs.1,00,000 for the

assessment year 2008-2009) Rate of tax deduction at source Normal rate applicable to an individual

When the provision are not applicable -Is it possible to get the payment without

tax deduction or lower tax deduction The employee can make an application form no 13 to the assessing officer to get a certificate of lower tax deduction or no tax deduction

Tax Deduction at Source from interest on securities[Sec.193]

Who is payer Payer of interest on securities

Who is the recipient A resident person holding securities Payment covered Interest on securities

At what time tax has to be deducted at source

At the time of payment or at the time of credit, whichever is earlier


-

Rate of tax deduction at source 10%+surcharge+education cess in case of listed debentures and 20%+surcharge+

education cess in case of non listed debentures, if the recipient is resident corporate assessee.20% + surcharge +education cess if the recipient is a

domestic company

When the provision are not applicable Interest on Centr deductal/State Government securities + a few more

given in first para

Is it possible to get the payment without tax deduction or lower tax deduction

See. second para

31

Securities interest on which is not subject to tax deduction When tax is not deductible at regular rates

Application to assessing officer in form no 13 Declaration to the payer in form no. 15 G Debentures interest up to Rs. 2500 Regimental fund Deep discount bond

Tax Deduction at Source from Dividends [Sec.194]

Who is payer Domestic company Who is the recipient Resident shareholder

Payment covered Deemed dividend under section 2(22)(e) At what time tax has to be deducted at source



-

Rate of tax deduction at source 20%+surcharge+ education cessWhen the provision are not applicable Dividend covered by section 115-O


See. Below

When tax is not deductible at regular rates

Dividend covered by section 115-O Application in form no 13 Declaration to the payer in form no. 15 G Debentures interest up to Rs. 2500 Dividend to LIC /GIC

32

Tax Deduction at Source from interest other than interest on securities [Sec.194A]

Who is payer Any person Paying interest other than interest on securities (not being an individual or Hindu Undivided Family whose books of account are not required to be audited number section 44AB in the immediately preceding financial year)

Who is the recipient A resident person Payment covered Interest other than interest on securities




From June 1,2007 tax is not deductible if payment/ credit does not exceed the

amount Rate of tax deduction at source 10%* if the recipient is resident non-

corporate assessee and 20%* if the recipient is a corporate assesee*

When the provision are not applicable For a few cases [see first para]


See. second para

When interest is not subject to tax deduction or subject to lower tax deduction

Interest is not subject to tax deduction

Declaration to the payer in form no 15G

Application to the assessing officer in form no. 13

Adjustment in the case of short deduction

Payment under a hire purchase agreement

33

Tax Deduction at Source from winnings from lotteries or crossword puzzles [Sec.194B]

Who is payer Any person Paying winning from lotteries/cross word puzzles/ card games/other games

Who is the recipient Any personPayment covered Winning from lotteries/cross word

puzzles/ card games/other gamesAt what time tax has to be deducted at source



If the amount of payment is Rs. 5,000 or less than Rs. 5,000

Rate of tax deduction at source 30%

When the provision are not applicable -


Not possible

Prize given partly in cash and partly in kind

34

Tax Deduction at Source from winnings from horse races [Sec.194BB]

Who is payer Any person Paying winning from lotteries horse races

Who is the recipient Any personPayment covered Winning from horse races





Rate of tax deduction at source 30%



Not possible

35

Tax Deduction at Source from payments to contactors or sub-contractors [Sec.194C

Case one Case two

Who is payer A specified person see below

A resident contactor (not being an individual or a Hindu Undivided Family whose books of account are not required to the audited under section 44AB in the immediately preceding financial year)

Who is the recipient A resident person A resident sub-contactorRate of tax deduction at source 2% [1%+surcharge

+ education cess in case of advertising

contract]

1%


At the time of payment or at the time of credit, whichever is earlier [see below]


Tax is not deductable only if a single payment does not exceed Rs. 20,000and the aggregate payment during the financial year does not

exceed Rs. 50,000. Moreover, tax is not deductable in respect of amount credited or paid

or payable by a resident contactor to an individual (being a resident transporter sub contractor) who does not own more than 2 trucks during the financial year [see below]

Payment covered Consideration for any “work contract” [See below]


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

36

When section 194C is applicable

Case 1 when payment is made by a specified person to a resident contractor [sec 194C (1)]

1. The central government or any State government ; or2. Any local authority

3. Any corporation established by or under a central, State or Provincial Act; or

4. Any company; or

5. Any co-operate society; or

6. Any authority constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for both; or

7. Any society registered under the societies Registration Act, 1860 or under any law corresponding to that act in force in any part of any India; or

8. Any trust; or

9. any University established or incorporated by or under a central, State Provincial Act and an Institution declared to be a university under Section 3 of the university Grants Commission Act ,1956; or

10. any firm.

Case 2 when payment is made by a resident contractor to sub contractor [sec 194C (2)]

When tax has to be deducted at source

37

o No tax deduction in small cases

o Who is contractor /sub contractor?

o Meaning of work contact

o “Contract for supply of labor for work contact”

1. Advertising,

2. Broadcasting and telecasting including production of a programmes for such broadcasting or telecasting,

3. Carriage of goods and passengers by any mode of transport other than by railways, and

4. Catering.

o Rate of tax deduction

Advertising contracts Other contracts

Income-tax Income-taxPayment to contractor

Payment to sub-contractor

1%

1%

2%

1%

oClarification from the board

Tax Deduction at Source from insurance commission [Sec.194D]

Who is payer Any person Paying insurance commissionWho is the recipient A resident person

Payment covered Insurance commissionAt what time tax has to be deducted at At the time of payment or at the time of

38

source credit, whichever is earlier Maximum amount which can be made

with out tax deduction If the amount of payment is Rs.5,000 or

less than Rs.5,000Rate of tax deduction at source 10% if the recipient is resident non-

resident assesse and 20%+surcharge+ education cess if the recipient is resident

corporate assesseeWhen the provision are not applicable -


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.

Adjustment not possible When tax is not deductible or deductible at lower rate

39

Tax Deduction at Source from payment to non-resident sportsmen or sports associations [Sec.194E]

Who is payer Any person making Payment to non resident sportsman/ sports association

Who is the recipient Non-resident sportsman/ sports association

Payment covered Payment to non resident sportsman/ sports association




Nil

Rate of tax deduction at source 10%+surcharge*+education cess* + Secondary and higher education cess*



No provision

A person responsible for paying the following income to the following person shall deduct tax at source

Payee Nature of income 1. Non-resident foreign

citizen sportsman (including an athlete)

2. Non resident sports association or institution

Income by way of-

1. Participation in India in any game (other than card game or gambling, etc.);

2. Advertisement; or

3. Contribution of articles relating to any game or sports in India in newspaper, magazine or journals

Any amount guaranteed to be paid or payable in relation to any game (but other than card game, etc.) or sport played in India

40

Tax Deduction at Source from payments in respect of National Saving Scheme [Sec.194EE]

Who is payer Post office Who is the recipient Any person

Payment covered Payment (principal + interest) out of National Saving Scheme, 1987





Rate of tax deduction at source 20%*

When the provision are not applicable The payment is made to legal heirs of the deceased depositor


See table below three conditions are given

When tax is not deductible Payment below Rs. 2,500

Payment to heirs

Declaration to the payer in Form No. 15G

Tax Deduction at Source on payments on account of repurchase of units of Mutual Funds or UTI [Sec.194F]

Who is payer Mutual fund or UTI Who is the recipient Unit holder under section 80CCB

Payment covered Payment on account of repurchase of units referred to in section 80CCB




-




No provision

41

Tax Deduction at Source from commission, etc., on sale of lottery tickets [Sec.194G]

Who is payer Any person Paying commission on sale of lottery tickets

Who is the recipient Any personPayment covered Commission on sale of lottery tickets




If the amount of payment is Rs.1,000 or less than Rs.1,000





Tax Deduction at Source from commission or brokerage [Sec.194H]Who is payer Any person Paying commission or

brokerage (not being an individual or Hindu Undivided Family whose books of account are not required to be audited number section 44AB in the immediately preceding financial year)

Who is the recipient Any resident personPayment covered Commission or brokerage (not being

insurance commission)At what time tax has to be deducted at source




Rate of tax deduction at source 10%(up to may 31,2007:5%)*




When tax has to be deducted Meaning of commission or brokerage

o Professional services

43

o “Indirect payment” – when commission is retained by Agent

Tax Deduction at Source from rent[Sec.194-I]

Who is payer Any person Paying rent (not being an individual or Hindu Undivided Family whose books of account are not required to be audited number section 44AB in the immediately preceding financial year)

Who is the recipient A resident personPayment covered Rent




If the amount of payment during a financial year is is Rs. 1,20,000 or less

than Rs.1,20,000Rate of tax deduction at source 15%* (if the recipient is an individual or

HUF), 20%*(up to may 31,2007)When the provision are not applicable See below


The recipient can make an application in Form No. 13 [see below]

When tax has to be deducted o Rent as defined in section 194-Io No tax deduction if payee is Government/ local authorities o When tax is deducted at lower rate o Clarifications from Board

44

Tax Deduction at Source on fees for professional or technical services [Sec.194J]

Who is payer Any person Paying fees for professional/ technical service (not being an individual or Hindu Undivided Family whose books of account are not required to be audited number section 44AB in the immediately preceding financial year or not being an individual or HUF who makes payments for personal purposes)

Who is the recipient A resident personPayment covered Fees for professional/ technical service




If the amount of payment during a financial year is Rs.20,000 or less than

Rs.20,000Rate of tax deduction at source 10% (up to may 31,2007)



The recipient can make an application in Form No. 13 [see below]

Time of tax deduction Rate of tax deduction When tax is not deductible When tax is deductible at lower rate professional/ technical service

45

Tax Deduction at Source from payment of compensation on acquisition of certain immovable property [Sec.194LA]

Who is payer Any person Paying compensation/enhanced compensation/consideration/enhanced consideration on account of compulsory acquisition of any land (not being rural agricultural land) or building

Who is the recipient A resident personPayment covered Compensation/enhanced

compensation/consideration/enhanced consideration on account of compulsory acquisition of land (not being rural agricultural land) or building




If the amount of payment during a financial year is Rs.1,00,000 or less than Rs.1,00,000


When the provision are not applicable Payment/credit before October 1, 2004



46

Tax Deduction at Source from other sums[Sec.195]

Who is payer Any person responsible for making payment to a non-resident

Who is the recipient A non-resident personPayment covered Any person to non-resident other than

salaryAt what time tax has to be deducted at source



-

Rate of tax deduction at source -

When the provision are not applicable If in the hands of the recipient, the amount is not chargeable to tax in India



Tax Deduction at Source from units or long-term capital gain under section [Sec.196B]

Where any income is payable in respect of units referred to in section 115AB or by way of long term capital gain arising from the transfer of such units to an Offshore Fund, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of (10%+surcharge +education cess)

47

Tax Deduction at Source from income or long-term capital gain from foreign currency bonds/Global Depository Receipts

[Sec.196C]

Who is payer Any person responsible for paying income/ long-term capital gain from GDR/bonds

Who is the recipient A non-resident personPayment covered Income/ long-term capital gain from

GDR/bondsAt what time tax has to be deducted at source



-


When the provision are not applicable Dividend referred to in section 115-O


No provision

Tax Deduction at Source from income of foreign Institutional Investors from securities [Sec.196D]

Who is payer Any person responsible for paying income in respect of securities referred to in section 115AD

Who is the recipient Foreign Institutional Investor Payment covered Income in respect of securities referred to

in section 115ADAt what time tax has to be deducted at source



-


When the provision are not applicable Dividend referred to in section 115-O; capital gain arising from transfer of

securities referred to in section 115AD


No provision

48

Other points for consideration

Amount payable to Government/ RBI/ certain corporation not subject to tax deduction

Recipient gets credit Issue of certificate of tax deduction to the recipient

o Dematerialization of TDS certificate Time limit for payment of tax deduction at source to the Government Annual Return to the Income Tax Department

o e-TDS Return Tax Deduction Account Number [Sec.203A] Obtaining a certificate of lower rate from the Assessing Officer [Sec.197]

o Additional Conditions for Charitable Trust, Scientific Research Association, etc

o How lower rate is determine Provision of section 197A Furnishing of quarterly return regarding the detail of non-deduction of tax

by certain persons [section 206A]

49

The prescribed forms and the last date for furnishing these returns, as per rule 37, 37-A, and 37-B are as under;-

S.No. Nature of return i.e. Deduction of tax form-

Section Form No. Last date in the financial year

1.2.3.4.

5.

6.7.

8.9.

10.

11.

12.

13.

14.15.16.

17.18.

19.

20.

21.

Salary Interest on securitiesDividendsInterest other than interest on securities

Winnings from lotteries or crossword puzzlesWinnings from horse racesPayments to contactors or sub-contractorsInsurance commissionInsurance commission paid or credited without tax deductionPayment to non-resident sportsmen or sports associations Payments in respect of National Saving SchemePayments on account of repurchase of units of Mutual Funds or UTI

Commission,etc.,on sale of lottery ticketsCommission or brokerage, etc.RentFees for professional or technical servicesPayment to non-residentsPayment to foreign company being unit holders of Mutual Funds

Units held by Overseas finance organizationIncome from foreign currency bonds

Income of foreign Institutional Investors from securities

192193194194-A

194-B

194-BB194-C

194-D194-D

194-E

194-EE

194-F

194-G

194-H194-I194-J

195196-A

196-B

196-C

196-D

24 &24Q26 &26Q 26 &26Q26 &26Q

26 &26Q

26 &26Q26 &26Q

26 &26Q26 &26Q

27 &27Q

26 &26Q

26 &26Q

26 &26Q

26 &26Q26 &26Q26 &26Q

27 &27Q27 &27Q

27 &27Q

27 &27Q

27 &27Q

June 30& 15 days after the expiry of each quarterWithin 14 days from the end of quarter

June 30& 15 days after the expiry of each quarter

Within 15 days from the end of quarter

50

IllustrationMr. X is getting a salary of Rs.21, 500 p.m. form a concern. During the financial year, 2007-08 .He contributed Rs.20,000 to a recognized provident fund and Rs. 40,000 to public provident fund. He also paid Rs.1,000 p.m. as life insurance premium and contributed Rs.15,000 to the National Defence Fund.

Compute the amount of tax to be deducted at source during the financial year 2007-08 for the assessment year 2008-09

Solution:

Rs. Salary @ Rs.21, 500 p.m. 2, 58,000

Estimated salaries being GTI. 2, 58,000Less: Deduction u/s 80-C: Rs.

i. Contribution to RPF 20,000ii. Contribution to PPF 40,000

iii. Life insurance premium 12,000 (Not excluding Rs. 1,00,000) 72,000Deduction u/s 80G: 100% of donation to NDF i.e. 100% of Rs.15, 000 15, 000 87,000

Estimated total income 1, 71,000 (For assessment year, 2008-09)

Ta x on Rs. 1, 71,000 (Rs. Per normal rate) 8,200Add: Education cess @2% on Rs.8,200 164

Secondary & higher education cess @ 1% on Rs. 8,200 82

Total tax- liability (Estimated) 8,446Tax to be deduct at source 8,446/12 704 p.m.

51

These deductions in the total income of HUF

80-C In respect of life insurance premium, provident fund contribution & other investments, deposits etc. Subject to the maximum of Rs. 1,00,000

80-D deduction in respect of medical insurance premium upto Rs. 10,000 or Rs. 15,000 (if the insured is a citizen )

80-DD Deduction in respect of maintenance including medical treatment of handicapped dependents Rs. 50,000. Rs. 75,000 in case of severe disability.

80-DDB medical treatment of specified disease or ailment Amount actually spent or Rs. 40,000 or Rs. 60,000 (in the case of a senior citizen) whichever is less

80-G Deduction in respect of donations limited to 50% and 100% as the case may be.80-GGA Deduction in respect of certain donations for scientific research or rural

development programme upto 100%of such donations.80-GGC Deduction in respect of contribution to any political party to the extent of whole

of the contribution i.e. 100% of contribution.80-IA Deduction in respect of profits and gains from enterprises engaged in

infrastructure development of special economic zone, power undertakings etc. @ 100% for initial 5 years and 30% for next 5 years.

80-IAB 1005 of the profits and gains derived by undertaking/enterprise from business of developing a special economic zone notified on or after 1-4-2005

80-IB Deduction in respect of profits and gains from industrial undertakings engaged in cold storage plant, hotel scientific research and development, mineral oil, housing projects cold chain facility, multiplex theaters, convention center and ships etc.@100%,50%,30% and 25%under different cases, as the case may be

80-IC Deduction in respect of profits of certain undertakings or enterprises in certain special category of states:

(a) Category @ 100% of profits for Ist 10 years (b) 100% of profits for Ist 5 years & 20%next 5 years (c) 100% of profits for Ist 5 years & 20%next 5 years

80-JJA Deduction in respect of profits and gains from the business of collecting and processing of bio-degradable waste being 100% of profits for initial 5 consecutive assessment years.

The deduction u/s 80 as discuss above shall not be allowed out of short-term capital gain as referred in section 111A and long-term capital gains.

52

mailto:etc.@100%25,50%25,30%25

DEDUCTION OF TAX FROM SALARIESAny person responsible for paying any income chargeable under The head salaries shall, at the time of payment, deduct income–tax at source on the estimated income of the assessee under this head. Such tax shall be calculated at the rates in force for the financial year in which the payment is made. The following points should be kept in mind at the time of deducting tax at source from payment of salary during the financial year 2007-08.

1. Tax shall not be deducted at source unless the estimated salaries exceed the minimum exemption limit i.e. Rs. 1, 45,000 in case of a resident women below 65 years Rs. 1, 95,000 in case of a resident senior citizen of 65 year or more and in any other case Rs. 1, 10,000

2. Where, during the financial year, an assessee is employed simultaneously under more than one employer, he may require any one of the said employer to make deduction of tax at source. For this the assessee shall furnish to the employer, deducting tax, such details of income under the head salaries due received by him from the other employer or employers and the tax deducted at source therefrom. Thereupon, the employer responsible for making deduction of tax at source shall take into account the details furnished and shall deduct tax at source accordingly.

3. Where the assessee, being a Government servant or an employee in a company, co-operative Society, Local Authority, University, Institution, Association or body, is entitle to the relief u/s 89(1), he may furnish its details to the person paying the salaries under Form 10-E. The person making the payment shall take into account the details so furnished and deduct tax at source accordingly.

4. Where, for the financial year, the assessee has, in addition to his ‘salaries’ income, any income chargeable under any other heads of income (not being a loss under any such head except the loss under the head ‘income from house property) for the same financial year, he may submit the details of :-

o Such in come and the tax deducted theron in from of declaration.o The loss, if any, under the head ‘income from house property’, to the

employer making deduction of tax at source.The employer, upon receiving such details shall deduct tax after into taking account such other income and the tax deducted thereon and the loss, if any, under the head ‘income from house property’. But the tax deducted at source from ‘salaries’ must not be below the amount that would have been deducted if the other income and the tax deducted thereon except the loss, if any under the head ‘income from house property’ had not been taken into account.

5. 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 particular of perquisites, other fringe benefits or amenities or profits in lieu of salary provided to him and the value thereof in the prescribed form (Form No. 12BA) and manner. This form is to be provided by the employer to employee if salary exceeds Rs. 1, 50,000. In other cases the information shall be provided in Form No. 16.

53

6. The person, deducting at source, may, at the time of any deduction, increase or reduce the amount of deduction for adjusting any excess or deficiency arising due to previous deduction of tax during the financial year.

7. When an employee is in receipt of payment of accumulated balances of a recognized provident fund and such payment is not exempt from tax under rule 8 of part A of the Fourth Schedule, then, the trustees of a recognized provident fund or any other person authorized to make such payment shall make there from the deduction of tax.

8. Where an employer’s contributions and interest thereon in an approved superannuation fund are paid to an employee during his life time but before his retirement or before his becoming incapacitated prior to such retirement, such before his shall be subject to deduction of tax at source. The tax shall be deducted at the average rate at which the employee was liable to tax during the preceding three years or less than three years if his membership in the fund was for such less period.

9. Where salary is payable in foreign currency, the value in rupees of such salary shall be calculated at ‘ telegraphic transfer buying rate’ of State Bank of India for the purpose of deduction of tax on such salary.

54

Section 80C

INSERT (AY 2008-09)Senior Citizens Savings Scheme 2004 and the Post Office Time Deposit Account added to the basket of saving instruments under Section 80C of the Income Tax Act.

Section 80L used to allow deduction of interest earned on, say, a National Savings Certificate or a bank deposit up to a limit of Rs 12,000. But now all these are gone .In their place has come Section 80C -- "u/s 80CCC, & u/s 80CCD", as the Finance Bill puts it. Thus, the new Section 80C of the Income Tax Act proposed in Union Budget gives you a bigger tax break than what the current regime offers.

Deduction in respect of Life Insurance Premia, Contribution to Provident Fund, etc. Rs 1 lakh can be invested under this section without any individual sub-limits except in

the case of Rs 10,000 in pension funds. Sections 88, 80L, 80CCC and 80CCD is clubbed in.

INSERT (AY 2007-08)It is proposed to insert clause (xxi) in sub-section (2) of this section in order to provide that the investment in a term deposit for a fixed period of not less than five years with any scheduled bank shall be eligible for a deduction under this section.

Schemes eligible for Section 80C benefits PPF ELSS - Mutual Funds NSC KVP

Life Insurance Senior Citizen Saving Scheme 2004 Post Office Time Deposit Account

Note : - Section 80CCC is for deduction in respect of contribution to certain Pension Funds. Section 80L is for deductions in respect to Interest on certain Securities, Dividends, etc

Sections abolished from Union Budget 2005-06 88 (Rebate on Life Insurance Premia, Contribution to Provident Fund, etc.) 80L (Deductions in respect to Interest on certain Securities, Dividends, etc.) Note :-

Rebate of Rs 5,000 for women and Rs 20,000 for senior citizens have been wiped off.

The key features of the new provision Exemption available to all taxpayers irrespective of income bracket -earlier Section 88 did

not provide benefit to those having income exceeding Rs 500,000. No exemption/adjustment for interest income All saving modes/options under Section 88 covered and also 80CCC and 80CCD

covered.

Following benefits will continue irrespective of changes

55

Interest paid on housing loan for self-occupied house property. Medical insurance premium. (Additional deduction of Rs 15000 u/s 80D to an individual

paying medical insurance premium for his/her parent(s) Specified expenditure on disabled dependant. Expenses for medical treatment for self or dependant or member of an HUF. Deduction in respect of interest on loans for pursuing higher studies - Section 80E. Deduction to person with disability.

Section 10(33) Dividends from mutual funds are fully exempt from income tax under Section 10(33). Equity funds (schemes that invest 50 per cent of their funds in equity) are also exempt from dividend tax. This means that unlike companies, they do not have to pay tax at the rate of 10.2 per cent on the dividend that they distribute.

INSERT (AY 2008-09)Coir Board included in Section 10(29A) and exempted from income tax.

Section 88Upto 31 March 2005, rebates were available on the tax payable under three sections.

According to the section, 30 per cent or 20 per cent or 15 per cent of the amount invested in certain schemes (schemes referred in Section 80C) was available as a rebate on the tax payable.

30 per cent of the amount invested was available as rebate only if the salary income of the individual was less than Rs. 1 lakh and if it constituted 90 per cent or more of the assessee's gross total income.

20 per cent of the amount invested was available as rebate if the gross total income of the individual was less than Rs 1.5 lakh and the case did not fall under the above mentioned case.

If gross total income was more than Rs. 1.5 lakh but less than Rs 5 lakh of the individual, a rebate of 15 per cent of the amount invested was available.

If gross total income was more than Rs 5 lakh of the individual, then there is no rebate.

Section 88B

INSERT (AY 2008-09)A new sub-section (11C) in Section 80-IB to grant a five year tax holiday to encourage hospitals to be set up anywhere in India, except certain specified urban agglomerations, and especially in tier-2 and tier-3 towns in order to serve the rural hinterland. This window will be open for the period April 1, 2008 to March 31, 2013, during which the hospital must commence operations.

Under this section, an individual resident in India and above the age of 65 years was allowed to a maximum rebate of Rs. 20,000 on the tax payable.

Section 88CUnder this section a lady resident in India, aged below 65 years, was allowed a maximum rebate on the tax payable of Rs 5,000.

Section 89 (1) This is available to an employee when he receives salary in advance or in arrear or when in one financial year, he receives salary of more than 12 months or receives 'profits in lieu of salary'

56

W.e.f. 1.6.89, relief u/s 89(1) can be granted at the time of TDS by employees of all companies co-operative societies, universities or institutions as well as govt./public sector undertakings. The relief should be claimed by the employee in Form No. 10E and should be worked out as explained in Rule 21A of the Income Tax Rules. Look for INSERT for AY 2008-09

As per Assessment Year 2006-07Section 80CCCAny individual who makes a contribution for any annuity plan of the Life Insurance Corporation of India or any other insurer is eligible for a deduction of the amount paid or Rs. 10,000, whichever is less. When an individual or his nominee receives any amount under the following circumstances it will be taxed as the income of the individual or his nominee, in the year of withdrawal or the year in which the pension is received:

On the surrender of the annuity plan or As pension received from the annuity plan.

INSERT (AY 2007-08)The limit of investment is proposed to increase from Rs 10,000 to Rs 1,00,000 subject to overall cap of Rs 1,00,000 provided under section 80CCE.

Section 80CCDThe deduction for contributions to a pension scheme of the Central Government is available only to those individual who have been employed by the central government on or after 1st January 2004, and will be allowed for any amount deposited in such a pension scheme. But, in this case, deduction of more than 10 per cent of the employee's salary shall not be allowed.

The contributions to the fund are also made by the Central Government. Deduction will be available for any contribution which is made by the Central Government or 10 per cent of the employee's salary, whichever is less.

When the individual or his nominee receives any amount out of the scheme which meets the following descriptions, it shall be taxed in the hands of the recipient.

On closure/ opting out of the pension scheme; or As pension received from the annuity plan.

The term 'salary' here includes Dearness Allowance (if considered for retirement benefits), but it excludes other allowances and perquisites.

The aggregate deduction under the Sections 80C, 80CCC and 80CCD cannot exceed Rs 1 lakh as whole.

Section 80D

INSERT (AY 2008-09)Additional deduction of Rs 15,000 under Section 80D is allowed to an individual who pays medical insurance premium for his/ her parent or parents.

Any Premium which is paid for medical insurance that has been taken on the health of the assessee, his spouse, dependent parents or dependent children, is allowed as a deduction, subject to a ceiling of Rs 10,000.

57

Where any premium is paid for medical insurance for a senior citizen, an enhanced deduction of Rs 15,000 is allowed. The deduction is available only if the premium is paid by cheque.

INSERT (AY 2007-08)Under section 80D, the deduction has been increased to Rs 15,000 and for senior citizen it is now Rs 20,000.

Section 80DDDeduction under this section is available to an individual who:

Incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependant; or

Deposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependant or to a nominee for the benefit of the dependant in the event of the death of the individual depositing the money, from the said scheme,

A deduction of Rs 50,000 is available. Where the depandant is with a severe disability, a deduction of Rs 75,000 is allowed.

If the death of the dependant occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received.

An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed.

The term 'dependent' here refers to the spouse, children, parents and siblings of the assessee who are dependant on him for maintenance and who themselves haven't claimed a deduction for the disability in computing their total incomes.

This deduction is also available to Hindu Undivided Families (HUF).

Section 80DDBAn individual, resident in India spending any amount for the medical treatment of specified diseases affecting him or his spouse, children, parents, brothers and sisters and who are dependant on him, will be eligible for a deduction of the amount actually spent or Rs 40,000, whichever is less.

Note:- For the complete list of disease specified, refer to Rule 11DD of the Income Tax Rules.

For any amount spent on the treatment of a dependent senior citizen an individual is eligible for a deduction of the amount spent or Rs 60,000, whichever is less is available.

The individual should furnish a certificate in Form 10-I with the return of income issued by a specialist working in a government hospital.

If any amount of medical expenditure is borne by the employer or is reimbursed under an insurance scheme, the eligibility of the deduction is the reduction to that extent. This deduction is also available to Hindu Undivided Families (HUF).

Section 80EUnder this section, deduction is available for payment of interest on a loan taken for higher education from any financial institution or an approved charitable institution. The loan should be

58

taken for either pursuing a full-time graduate or post-graduate course in engineering, medicine or management, or a post-graduate course in applied science or pure science.

The deduction is available for the first year when the interest is paid and for the subsequent seven years. Up to March 2005, deduction was available for the repayment of principal and interest aggregating to Rs 40,000 a year.

Section 80UIt is deduction in the case of a person with a disability. An individual who is suffering from a permanent disability or mental retardation as specified in the persons with disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999, shall be allowed a deduction of Rs 50,000. In case of severe disability it is Rs. 75,000.

The assessee should furnish a certificate from a medical board constituted by either the Central or the State Government, along with the return of income for the year for which the deduction is claimed.

Permissible deductions from gross total income and tax liabilityBasic rules of governing deductions under sections 80C- 80U

1. Deduction in respect of Life Insurance Premia,deferred annuity, Contributions to Provident Fund, subscription to certain equity shares or debentures,etc. [Sec. 80C]

2. Deduction in respect of National Saving Scheme – To What extent available [Sec.80CCA]

3. Equity Linked Saving Scheme- When deduction is available [Sec.80CCB]4. Deduction in respect of pension fund – when available [Sec. 80CCC]5. Deduction in respect of contribution to pension scheme of Central Government

[Sec. 80CCD]6. Deduction in respect of medical insurance premia- When and to what extent available

[Section 80D]7. Deduction in respect of maintenance including medical treatment of a dependent being a

person with disability- when and to what extent available [Sec- 80DD]8. Deduction in respect of in respect of medical treatment,etc.To what extent available [Sec-

80DDB]9. Deduction in respect of repayment of Loan taken for higher education-when and to what

extent available [Sec- 80E]10. Deduction in respect of donations to certain funds, charitable institutions, etc. – How

arrived at [Sec. 80G]11. Deduction in respect of rent paid – To whom and to what extent available [Sec. 80GG]12. Deduction in respect of certain donations for scientific research or rural development –

when eligible [Sec.80GGA]13. Deduction in respect of contributions given to political parties – To what extent deductible

[Sec. 80GGB 80GGC]14. Deduction in respect of profits and gains from projects outside India – To what extent

available [Sec. 80HHB]15. Deduction in respect of profits and gains from housing projects aided by Word Bank - To

what extent available [Sec. 80HHBA]16. Deduction in respect of export turnover - To what extent available [Sec. 80HHC]

59

17. Deduction in respect of earnings in convertible foreign exchange – How to find out [Sec. 80HHD]

18. Deduction in respect of profits from export of computer software – How to determine [Sec. 80HHE]

19. Deduction in respect of profits and gains from export or transfer of films software- How to find out [Sec. 80HHF]

20. Deduction in respect of profits and gains from industrial undertaking or enterprises engaged in infrastructure development, etc.-How to find out [Sec. 80-IA]

21. Deduction in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone (SEZ) [Sec.80-IAB]

22. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings –How to avail [Sec. 80.IB]

23. undertaking engaged in the business of processing, preservation and packaging of fruits or vegetables or integrated handling, storage and transportation of food grains[Sec. 80-IB(11A0)]

24. Deduction in respect of profits and gains from certain undertaking in certain special category of States – How to find out [SEC. 80-IC]

25. Deduction in respect of profits from the business of processing of bio-degradable wate – How to determine [Sec.80JJA]

26. deduction in respect employment of new workmen – How to determine [ Sec. 80JJAA]27. Deduction in respect of interest on certain securities, Investment, etc. –To what

extent available [Sec. 80L]28. Deduction in respect of certain income of Offshore Banking Units and International

Financial Services Centre – T o what extent available [Sec. 80-LA]29. Deduction in respect of royalties from certain foreign enterprises- To what extent

available [ Sec. 80-O] 30. Deduction in respect of income of a co-operative society - To what extent available [Sec.

80P]31. Deduction in respect of royalty income of authors – To what extent available [ sec.

80QQB]32. Deduction in respect of remuneration from certain foreign sources in the case of

professors, teachers etc. – To that extent available [80R]33. Deduction in respect of professional income from foreign sources – To that extent

available [80RR]34. Deduction in respect of remuneration received for services rendered outside India – To

that extent available [80RRA]35. Deduction in respect of royalty on patents - To what extent available [ sec. 80RRB]36. Deduction in case of a person with disability – To what extent available [Sec.

80U]

Sec – 80C,CCA,CCB,,CCC,CCDSec – 80D,DD,DDBSec – 80E Sec – 80G,GG,GGA,GGCSec – 80HHB,HHBA,HHC,HHD,HHE,HHFSec – 80IA,IAB,IB,IB(11A),IC

60

Sec – 80JJA,JJAASec – 80L,LASec – 80OSec – 80PSec – 80QQBSec – 80R,RR,RRA,RRBSec – 80U

61

tdsincome tax act

Documents

deduction of tax

tax deducted

income tax act

incometax act

source of income

rate of tax deduction

tax issues

source source