Rates of Income-Tax as per Finance Act, 2018, Income-Tax Deduction from Salaries During FY 2018-19 Under Sec. 192 of IT Act 1961 CIRCULAR NO: 01/2019
Income-Tax Deduction from Salaries During FY 2018-19 - IT Circular 1/2019
CIRCULAR NO: 01/2019
F.No. 275/192/2018-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
******
North Block, New Delhi
Dated the 1st January, 2019
SUBJECT: INCOME - TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2018-19 UNDER SECTION 192 OF THE INCOME- TAX ACT, 1961.
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Reference is invited to Circular No. 29/2017 dated 05.12.2017 whereby the rates of deduction of income - tax from the payment of income under the head "Salaries" under Section 192 of the Income-tax Act,1961 (hereinafter ̳the Act‘), during the financial year 2017-18, were intimated. The present Circular contains the rates of deduction of income - tax from the payment of income chargeable under the head "Salaries" during the financial year 2018 -19 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department-www.incometaxindia.gov.in.
Reference is invited to Circular No. 29/2017 dated 05.12.2017 whereby the rates of deduction of income - tax from the payment of income under the head "Salaries" under Section 192 of the Income-tax Act,1961 (hereinafter ̳the Act‘), during the financial year 2017-18, were intimated. The present Circular contains the rates of deduction of income - tax from the payment of income chargeable under the head "Salaries" during the financial year 2018 -19 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department-www.incometaxindia.gov.in.
2. RATES OF INCOME -TAX AS PER FINANCE ACT, 2018:
As per the Finance Act, 2018, income- tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2018 - 19 (i.e. Assessment Year 2019 - 20) at the following rates:
2.1 Rates of tax
A. Normal Rates of tax:
| Sl N. | Total Income | Rate of tax |
| 1. | Where the total income does not exceed Rs. 2,50,000/- | Nill- |
| 2. | Where the total income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/- | 5 per cent of the amount by which the total income exceeds Rs. 2,50,000/- |
| 3. | Where the total income exceeds Rs. 5,00,000/-but does not exceed Rs. 10,00,000/- | Rs. 12,500/-plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/- |
| 4. | Where the total income exceeds Rs. 10,00,000/- | Rs.1,12,500/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/ |
B. Rates of tax for every individual, resident in India,who is of the age of sixty years or more but less than eighty years at any time during the financial year:
| Sl N. | Total Income | Rate of tax |
| 1. | Where the total income does not exceed Rs. 3,00,000/- | Nill- |
| 2. | Where the total income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/- | 5 per cent of the amount by which the total income exceeds Rs. 3,00,000/- |
| 3. | Where the total income exceeds Rs. 5,00,000/-but does not exceed Rs. 10,00,000/- | Rs. 10,000/-plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/- |
| 4. | Where the total income exceeds Rs. 10,00,000/- | Rs.1,10,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/ |
2.2 Surcharge on Income tax:
The amount of income - tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Act, shall be increased by a surcharge for the purpose of the Union, calculated, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub - clause (vii) of clause (31) of section 2 of the Act,-
(a) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten percent of such income-tax and
(b) having a total income exceeding one crore rupees, at the rate of fifteen percent of such income-tax:
Provided that in the case of persons mentioned above having total income exceeding;-
(a) Fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees;
(b) one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees
2.3.1 Health and Education Cess
Education Cess on income- tax and Secondary and Higher Education Cess on income-tax shall be discontinued. However, a new cess, by the name “Health and Education Cess” shall be levied at the rate of four percent of income tax including surcharge wherever applicable, No marginal relief shall be available in respect of such cess.
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3. TDS from Salaries | Method of Tax Calculation - IT Circular 1/2019 [Tax Deduction at Source from Salaries]
7. TDS on Payment of Accumulated balance under Recognised PF and Contribution from approved Superannuation Fund
8. DDOs To Satisfy Themselves of the Genuineness of Claims
9. Calculation of Salary Income of Employee on which income tax would be required to be deducted – IT Circular 1/2019
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- Due dates for payment of TDS | IT Circular 1/2019
- Fee for default in furnishing statements (Section 234E) | IT Circular 1/2019
- Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted | IT Circular 1/2019
- Furnishing of Certificate for Tax Deducted (Section 203) | IT Circular 1/2019
- Furnishing of particulars pertaining to perquisites, etc (Section 192(2C) | IT Circular 1/2019
- DDOs to obtain evidence of proof or particulars of claim (including claim for set-off of loss) under the section 192(2D) | IT Circular 1/2019
- Compulsory Requirement to furnish PAN by employee (Section 206AA) | IT Circular 1/2019
- TDS on Income from Pension | IT Circular 1/2019
- Rules for valuation of such benefit or amenity as given in Rule 3 | IT Circular 1/2019
- Income not included under the Head "Salaries" (Exemptions) | IT Circular 1/2019
- Deduction u/s 16 of the Act form the Income from Salaries | Entertainment Allowance - IT Circular 1/2019
- Deductions under Chapter VI-A of the Act | IT Circular 1/2019
- Section 80CCC | Deduction in respect of contribution to certain pension funds | IT Circular 1/2019
- Section 80CCD | Deduction in respect of contribution to pension scheme of Central Government - IT Circular 1/2019
- Deduction in respect of investment made under an equity savings scheme(Section 80CCG) | IT Circular 1/2019
- Section 80D - Deduction in respect of health insurance premia paid, etc. | IT Circular 1/2019
- Section 80DD | Deductions in respect of expenditure on persons or dependants with disability | IT Circular 1/2019
- Section 80DDB - Deduction in respect of medical treatment, etc. | IT Circular 1/2019
- Section 80E - Deduction in respect of interest on loan taken for higher education | IT Circular 1/2019
- Section 80G - Deductions on respect of donations to certain funds, charitable institutions, etc. | IT Circular 1/2019
- Section 80GG - Deductions is respect of rents paid | IT Circular 1/2019
- Section 80 GGA - Deductions in respect of certain donations for scientific research or rural development | IT Circular 1/2019
- Section 80TTA - Deduction in respect of interest on deposits in savings account | IT Circular 1/2019
8. DDOs To Satisfy Themselves of the Genuineness of Claims
9. Calculation of Salary Income of Employee on which income tax would be required to be deducted – IT Circular 1/2019
10. MISCELLANEOUS
10.1 These instructions are not exhaustive and are issued only with a view to guide the employers to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962, the Finance Act 2018, the relevant circulars / notifications, etc.
10.2 In case any assistance is required, the Assessing Officer/the Local Public Relation Officer of the Income-tax Department may be contacted.
10.3 These instructions may be brought to the notice of all Disbursing Officers and Undertakings including those under the control of the Central/ State Governments.
10.4 Copies of this Circular are available at the following websites: www.finmin.nic.in & www.incometaxindia.gov.in
Sandeep Singh
Under Secretary to the Govt. of India
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Important Illustration Must Read
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ANNEXURE-I
SOME ILLUSTRATIONS
Example 1
For Assessment Year 2019-20
(A) Calculation of Income tax in the case of an employee (Male or Female) below the age of sixty years and having gross salary income of:
- i) Rs.2,50,000/-
- ii) Rs.4,00,000/-
- iii) Rs.10,00,000/-
- iv) Rs.55,00,000/- and
- v) Rs. 1,10,00,000/-
| Particulars | Rupees(i) | Rupees(ii) | Rupees(iii) | Rupees(iv) | Rupees(v) |
|---|---|---|---|---|---|
| Gross Salary Income (including allowances) | 2,50,000 | 4,00,000 | 10,00,000 | 55,00,000 | 1,10,00,000 |
| Contribution of G.P.F. | 45,000 | 50,000 | 1,00,000 | 1,00,000 | 1,00,000 |
Computation of Total Income and tax payable thereon
| Particulars | Rupees(i) | Rupees(ii) | Rupees(iii) | Rupees(iv) | Rupees(v) |
|---|---|---|---|---|---|
| Gross Salary | 2,50,000 | 4,00,000 | 10,00,000 | 55,00,000 | 1,10,00,000 |
| Less: Deduction U/s 80C | 45,000 | 50,000 | 1,00,000 | 1,00,000 | 1,00,000 |
| Taxable Income | 2,05,000 | 3,50,000 | 9,00,000 | 54,00,000 | 1,09,00,000 |
| (A) Tax thereon | Nil | 2,500* | 92,500 | 14,32,500 | 30,82,500 |
| Surcharge | 1,43,250 | 4,62,375 | |||
| Add: Health & Education Cess @ 4% | Nil | 100 | 3700 | 63,030 | 1,41,795 |
| Total tax payable | Nill | 2600 | 96,200 | 16,38,780 | 36,86,670 |
* After rebate of Rs 2500 u/s 87A
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Example 2
For Assessment Year 2019-20
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent (With valid PAN furnished to employer).
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Gross Salary | 4,20,000 |
| 2 | Amount spent on treatment of a dependant, being person with disability (but not severe disability) | 7000 |
| 3 | Amount paid to LIC with regard to annuity for the maintenance of a dependant, being person with disability(but not severe disability) | 60,000 |
| 4 | GPF Contribution | 25,000 |
| 5 | LIP Paid | 10,000 |
| 6 | Interest Income on Savings Account | 12,000 |
Computation of Tax
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Gross Salary | 4,20,000 |
| 2 | Add: Income from Other Sources Interest Income on Savings Account | Rs 12,000 |
| 3 | Gross Total Income | 4,32,000 |
| 4 | Less: Deduction U/s 80DD (Restricted to Rs. 75,000/-only) | 60,000 |
| 5 | Less: Deduction U/s 80C (i) GPF Rs.25,000/- + (ii) LIP Rs.10,000/- = Rs.35,000/- | 35,000 |
| 6 | Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-) | 10,000 |
| 7 | Total Income | 2,97,000 |
| 8 | Income Tax thereon/payable (includes Rebate of Rs 2500 as per Section 87A | Nill |
| 9 | Add: Health & Education Cess @ 4%.Nil | Nill |
| 10 | Total Income Tax payable | Nil |
| 11 | Rounded off to | Nil |
Example 3
For Assessment Year 2019-20
Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer).
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Gross Salary | 5,20,000 |
| 2 | Medical Reimbursement by employer on the treatment of self and dependent family member | 35,000 |
| 3 | Contribution of GPF | 20,000 |
| 4 | LIC Premium | 20,000 |
| 5 | Repayment of House Building Advance | 25,000 |
| 6 | Tuition fees for two children | 60,000 |
| 7 | Investment in Unit-Linked Insurance Plan | 30,000 |
| 8 | Interest Income on Savings Account | 8,000 |
| 9 | Interest Income on Time Deposit | 15,000 |
Computation of Tax
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Gross Salary | 5,20,000 |
| 2 | Add: Perquisite in respect of reimbursement of Medical Expenses In excess of Rs.15,000/- in view of Section 17(2)(v) | 20,000 |
| 3 | Income from Other Sources i) Interest Income on Savings Account Rs 8,000 ii) Interest Income on Time Deposit Rs 15,000 | 23,000 |
| 4 | Gross Total Income | 5,63,000 |
| 5 | a. Less: Deduction U/s 80C (i) GPF Rs.20,000/- (ii) LIC Rs.20,000/- (iii) Repayment of House Building Advance Rs.25,000/- (iv) Tuition fees for two children Rs.60,000/- (v) Investment in Unit-Linked Insurance Plan Rs.30,000/- Total =Rs.1,55,000/- Restricted to Rs.1,50,000/- b. Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10,000/- available only on Savings account interest) Rs 8000 Total deduction available Rs 1,58,000/- | 1,58,000 |
| 6 | Total Income | 4,05,000 |
| 7 | Income Tax thereon/payable 7,750 | Nill |
| 8 | Add: Health & Education Cess @ 4%.Nil | 310 |
| 9 | Total Income Tax payable | 8060 |
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Example 4
For Assessment Year 2019-20
Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer).
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Salary | 3,50,000 |
| 2 | Dearness Allowance | 2,00,000 |
| 3 | House Rent Allowance | 1,40,000 |
| 4 | House Rent Paid | 1,44,000 |
| 5 | General Provident Fund | 36,000 |
| 6 | Life Insurance Premium | 4,000 |
| 7 | Subscription to Unit-Linked Insurance Plan | 50,000 |
Computation of total income and tax payable thereon
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Salary+Dearness Allowance+House Rent Allowance 3,50,000+2,00,000+1,40,000=6,90,000 | 6,90,000 |
| 2 | Total Salary Income | 6,90,000 |
| 3 | Less: House Rent allowance exempt U/s 10(13A): Least of: (a). Actual amount of HRA received = 1,40,000 (b). Expenditure of rent in excess of 10% of salary (including D.A. presuming that D.A. is taken for retirement benefit) (1,44,000-55,000) = 89,000 (c). 50% of Salary(Basic+ DA) = 2,75,000 [Bombay/Kolkata/Delhi/Chennai] or 40% of salary (Basic + DA) in case of other cities | 89,000 |
Gross Total Income | 6,01,000 | |
| Less: (i) GPF = Rs. 36000/- (ii) LIC = Rs. 4000/- (iii) Investment in Unit Linked Insurance Plan = Rs. 50,000/- Total = Rs. 90,000/- | 90,000 | |
Total Income | 5,11,000 | |
Tax Payble | 14700 | |
Add: Health & EducationCess @ 4% | 588 | |
Total Income Tax payable | 15288 | |
Rounded off to | 15290 |
Example 5
For Assessment Year 2019-20
Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid PAN furnished to employer).
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Salary | 7,00,000 |
| 2 | Bonus | 1,40,000 |
| 3 | Free gas, electricity, water etc. (Actual bills paid by company) | 40,000 |
| 4(a) | Flat at concessional rate (for ten month). @ Rs.36000/- month | 3,60, 000 |
| 4(b | Hotel rent paid by employer (for two month) | 1,00,000 |
| 4(c) | Rent recovered from employee. | 60,000 |
| 4(d) | Cost of furniture. | 2,00,000 |
| 5 | Subscription to Unit Linked Insurance Plan | 50,000 |
| 6 | Life Insurance Premium | 10,000 |
| 7 | Contribution to recognized P.F. | 42,000 |
Computation of total income and tax payable thereon
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Salary | 7,00,000 |
| 2 | Bonus | 1,40,000 |
| 3 | Total Salary(1+2) for Valuation of Perquisites | 8,40,000 |
| Valuation of perquisites | ||
| 4(a) | Perquisite for flat (Cities having population>25 lakh as per 2000 census) Lower of (15% of salary for 10 months = Rs.1,05,000/-) and (actual rent paid= Rs 3,60,000) i.e. Rs. 1,05,000 | 1,38,600 |
| 4(b) | Perquisite for hotel: Lower of (24% of salary of 2 months = Rs 33,600) and (actual payment= Rs 1,00,000) i.e. Rs 33,600 | |
| 4(c) | Perquisites for furniture @ 10% of cost (10% of Rs. 2,00,000) Rs. 20,000 | |
| 4(c)(i) | Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000)Rs.158,600 Less: rent recovered (-) Rs.60,000 = Rs. 98,600 | |
| 4(d) | Add Perquisite for free gas, electricity, water etc. Rs.40,000(+) Rs 98,600 [4(c)(i)] = Rs 1,38,600 Total perquisites | |
| 5 | Gross Total Income (Rs.8,40,000+ 1,38,600) | 9,78,600 |
| 6 | Gross Total Income 9,78,600 | 9,78,600 |
| 7 | Less: Deduction U/s 80C: (i). Provident Fund (80C): 42,000 (ii). LIC (80C) :10,000 (iii). Subscription to Unit Linked Insurance Plan(80C) :50,000/- Total = 1,02,000 Restricted to Rs 1,02,000 u/s 80C | 1,02,000 |
| 8 | Total Income | 8,76,600 |
| 9 | Tax Payable | 87,820 |
| 10 | Add: Health & Education Cess @ 4%. | 3513 |
| 11 | Total Income Tax payable | 91,333 |
| 12 | Rounded off to | 91,330 |
Example 6
For Assessment Year 2019-20
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer).
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Salary | 4,00,000 |
| 2 | Dearness Allowance | 1,00,000 |
| 3 | House Rent Allowance | 1,80,000 |
| 4 | Special Duties Allowance | 12, 000 |
| 5 | Provident Fund | 60,000 |
| 6 | LIP | 10,000 |
| 7 | Deposit in NSC VIII issue | 30,000 |
| 8 | Rent Paid for house hired by employee 1,20,000 | 1,20,000 |
| 9 | Repayment of House Building Loan (Principal) | 60,000 |
| 10 | Tuition Fees for three children (Rs.10,000 per child) | 30,000 |
Computation of total income and tax payable thereon
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Salary(Basic+DA+HRA+SDA) | 6.92,000 |
Less: House rent allowance exempt U/s 10 (13A) Least of: (a). Actual amount of HRA received. :Rs.1,80,000 (b). Expenditure on rent in excess of 10% of salary (Including D.A.)assuming D.A. is included for retirement benefits (1,20,000- 50,000) :Rs. 70,000 (c). 50% of salary (including D.A) : Rs. 2,50,000 | 70,000 | |
| 2 | Gross Total Income Taxable | 6,22,000 |
| Less: Deduction U/s 80C (i). Provident Fund : 60,000 (ii). LIP: 10,000 (iii). NSC VIII Issue: 30,000 (iv). Repayment of HBA : 60,000 (v). Tuition Fees (Restricted to two children): 20,000 Total: 1,80,000 Restricted to 1,50,000 | 1,50,000 | |
Total Income | 4,72,000 | |
| Income Tax thereon/payble | 11,100 | |
| 10 | Add: Health & Education Cess @ 4%. | 444 |
| 11 | Total Income Tax payable | 11,544 |
| 12 | Rounded off to | 11,540 |
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Computation of total income and tax payable thereon
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B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
Computation of total income and tax payable thereon
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Example 9
1.Mr. A, employed with XYZ Ltd. Up to 31.10.2016, received following emoluments :
Computation of total income and tax payable thereon
Example 7
For Assessment Year 2019-20
A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:
- iv) Rs.4,50,000/-
- v)Rs.8,00,000/-
- vi) Rs. 12,50,000/-.
B. What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
| Particulars | Rupees(i) | Rupees(ii) | Rupees(iii) | ||
| 4,50,000 | 8,00,000 | 12,50,000 | ||
| Contribution of P.P.F. | 70,000 | 1,00,000 | 1,50,000 |
Computation of total income and tax payable thereon
| Particulars | Rupees(i) | Rupees(ii) | Rupees(iii) |
| Gross Pension | 4,50,000 | 8,00,000 | 12,50,000 |
| Less: Deduction U/s 80C | 70,000 | 1,00,000 | 1,50,000 |
| Taxable Income | 3,80,000 | 7,00,000 | 11,00,000 |
| Tax thereon | 4,000 | 50,000 | 1,40,000 |
| Add: Health & Education Cess @ 4%. | 160 | 2000 | 5600 |
| Total tax payable | 4,160 | 52,000 | 1,45,600 |
Example 8
For Assessment Year 2019-20
A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:
- iv) Rs.5,00,000/-
- v)Rs.8,00,000/-
- vi) Rs. 12,50,000/-.
| Particulars | Rupees(i) | Rupees(ii) | Rupees(iii) |
| Gross Pension | 5,00,000 | 8,00,000 | 12,50,000 |
| Contribution of P.P.F. | 80,000 | 1,12,000 | 1,50,000 |
Computation of total income and tax payable thereon
| Particulars | Rupees(i) | Rupees(ii) | Rupees(iii) |
| Gross Pension | 5,00,000 | 8,00,000 | 12,50,000 |
| Less: Deduction U/s 80C | 80,000 | 1,20,000 | 1,50,000 |
| Taxable Income | 4,20,000 | 6,80,000 | 11,00,000 |
| Tax thereon | Nill | 36,000 | 1,30,000 |
| Add: Health & Education Cess @ 4%. | Nill | 1,440 | 5,200 |
| Total tax payable | Nill | 37,440 | 1,35,200 |
Example 9
For Assessment Year 2019-20
1.Mr. A, employed with XYZ Ltd. Up to 31.10.2016, received following emoluments :
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Basic pay p.m. | 13,000 |
| 2 | Bonus for the year received in July, 2015 | 7,200 |
| 3 | Club facility (for private use only) Expenditure by employer p.m. | 700 |
| 4 | House Rent Allowance p.m.2,800 | 2800 |
| 5 | Employer‘s contribution to URPF p.m. (Mr. A also made equal contribution)1,000 | 1000 |
W.e.f. 01.11.2015, Mr. A joined PQR Ltd., with following pay package : | ||
| 1 | Basic pay p.m.18,000 | 18,000 |
| 2 | House Rent Allowance p.m.1,600. | 1,600 |
| 3 | Club Facility (for private use only) Expenditure by employer p.m. | 1,100 |
| 4 | Use of car for journey between office and residence – Employer‘s expenditure p.m. | 600 |
| 5 | Employer‘s contribution to RPF p.m. (Mr. A also made equal contribution) | 2000 |
Other particulars of Mr. A are as under : | ||
| 1 | 1. Mr. A resides at Amritsar paying a monthly rent of | 3,500 |
| 2 | 2 Mr. A‘s income from other sources | 95,000 |
| 3 | Mr. A contributed to LIC/PPR/NSC etc. | 20,000 |
| Compute Mr. A‘s taxable income and tax liability for A.Y. 2017-18. | ||
Computation of total income and tax payable thereon
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Income from Salary | |
a) From XYZ Ltd. | 4,89,600 | |
| Basic pay (Rs.13,000 x 7) | 91,000 | |
| Bonus | 7,200 | |
| Club facility (Rs.700 x 7) Rupees | 4,900 | |
H.R.A. (Rs.2,800 x 7) = 19,600 | ||
Less : Exempt u/s 10(13A) = 15,400 | 4,200 | |
Employer‘s Contribution to U.R.P.F. | 1,07,300 | |
| ||
Employer‘s Contribution to R.P.F. | 95,500 | |
Gross Salary | 2,02,800 | |
| Less Deduction | ----- | |
Net Salary | 2,02,800 | |
| 2 | Income from Others Sources | 95,000 |
Gross Total Income | 2,97,800 | |
| Less : Deduction u/s 80C : Contribution to LIC/PPF/NSC = Rs. 20,000 : Contribution to RPF ( Rs.2000 x 5) = Rs. 10,000 | 30,000 | |
Total Income | 2,67,800 | |
Computation of Tax Liability | ||
| Tax payable on Rs.2,67,800 | 8,90 | |
| Less : Rebate u/s 87A | 8,90 | |
| Net Income-tax payable | Nil | |
| Add : Surcharge | Nil | |
Add : Health & Education Cess @ 4%. | ------------ | |
Total Tax Payable | Nil |
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2. One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C.Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs. 40,000, DA at prescribed rates, transport allowances @ Rs.3600+DA thereon, and HRA (existing-from 1st July 2017 @24% of basic pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2019 -20.
Computation of total income and tax payable thereon
Example 10
For Assessment Year 2019-20
2. One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C.Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs. 40,000, DA at prescribed rates, transport allowances @ Rs.3600+DA thereon, and HRA (existing-from 1st July 2017 @24% of basic pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2019 -20.
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Honorarium for valuation of answer books of a departmental examination | 3,000 |
| 2 | Fee for work done for a private body (1/3rd of fees has been retained by Govt.) | 6,000 |
| 3 | Contributions to G.P.F. p.m. | 4,700 |
| 4 | Postal Life Insurance Premium financed from G.P.F. p.m. | 280 |
| 5 | Contribution to Central Govt. Employees Group Insurance Scheme p.m. | 500 |
| 6 | Life Insurance Premium (being a Life Insurance Policy of Rs.1,00,000 taken in name of his wife before 1.04.2012) | 10,500. |
| 7 | Contribution to Public Provident Fund | 10,000 |
| 8 | Repayment of HDFC loan borrowed after 1.04.1999 EMI Rs.25,000 (Towards loan Rs.95,000, towards interest Rs.2,05,000) | 3,00,000 |
Computation of total income and tax payable thereon
| S. No | Particulars | Rupees |
|---|---|---|
| 1 | Income from Salary Basic Pay @ Rs 40,000 p.m | |
(March to June ‘18) = 1,60,000 @ Rs 41,200 p.m * (July 2017 to Feb 2018) = 3,29,600 | 4,89,600 | |
| Dearness Allowance 1.3.2018 to 30.06.2018 @ 7% i.e., Rs 40,000 p.m = 11,200 1.7.2018 to 31.12.2018 @ 9% i.e. Rs 41,200 p.m = 22,248 1.1.2019 to 28.02.2019 @ 11% (assumed) i.e.,Rs. 41,200 p.m =9,064 | 5,32,112 | |
| House Rent Allowance = 1,17,504 | 6,49,616 | |
| Transport Allowance 1.3.2018 to 30.6.2018 @ Rs 3200 p.m = 12,800 1.7.2018 to 31.12.2018 @ Rs 3780 p.m = 22,680 1.1.2019 to 28.2.2019 @ Rs 3852 p.m = 7704 | 43,184 | |
Less: Exempt u/s 10(14) @ 800 p.m = 19200 | 23984 | |
| 6,73,600 | ||
Honorarium | 3,000 | |
Fees (2/3 retained by him) | 4,000 | |
| Total Salary | 6,80,600 | |
Less: Standard Deduction | - | |
Net Salary | 6,80,600 | |
| 2 | Income from House Property | |
| Self-occupied u/s 23(2)(a) where property is acquired/constructed with borrowed capital on or after 1.4.1999 and such acquisition/construction computed within five years from the end of FY in which capital was borrowed. | Nil | |
| Less: Interest on HDFC Loan (upto Rs. 2,00,000) 2,00,000(-) | 2,00,000 | |
Gross Total Income | 4,80,600 | |
| Less:Deduction u/s 80 C- | ||
| GPF @ Rs 4,700/-p.m = 56,400- | ||
| CGEGIS @ Rs 500/-p.m = 6,000- | ||
| Life Insurance Premium = 10, 500- | ||
| Repayment of HDFC Loan = 95,000- | ||
| Deposit in Public Provident Fund = 10,000 | ||
1,77,900 | ||
| 1,50,000 | ||
| Restricted to a maximum of Taxable Income | 3,30,600 | |
| Computation of Tax Liability | 4030 | |
| Tax payable | ||
Add: Surcharge - | ||
Add: Health & Education Cess @4% | 161 | |
Total Tax Liability | 1691* |
*After rebate of Rs 2500 u/s 87A
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