CIRCULAR NO 29 /2017
Deduction of Tax at Source from Salaries u/s 192 of the Income Tax Act, 1961 for FY 2017-18-CBDT Circular
Under section 192 of the Income Tax Act, 1961, every person responsible for paying any income chargeable under the head “Salaries” is liable to deduct income-tax on the estimated income of the assessee under the head “Salaries” for the financial year 2017-18.
The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to requirement to furnish PAN as per sec 206AA of the Act, and shall be deducted at the time of each payment. No tax, however, will be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 2,50,000/- or Rs.3,00,000/- or Rs. 5,00,000/-, as the case may be, depending upon the age of the employee.
CBDT Circular on TDS from Salaries for FY 2017-18
Few important aspects covered by the CBDT circular are as under:
1. Rates of tax and surcharge
2. Method of Tax Calculation:
3. Payment of Tax on Perquisites by Employer
4. Computation of Average Income Tax
5. Salary From More Than One Employer- The employee is now required to furnish to the present/chosen employer details of the income under the head “Salaries” due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer.
6. Relief u/s 89(1) when Salary Paid in Arrear or Advance-Employee may furnish to the employer particulars in Form No. 10E duly verified by him.
7. Information regarding Income under any other head- The particulars may now be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under Rule 26B(2) and shall be annexed to the simple statement. The form of verification is reproduced as under:
I, …………………. (name of the assessee), do declare that what is stated above is true to the best of my information and belief.
8. Computation of income under the head Income from house property-The DDO shall also ensure furnishing of the evidence or particulars in Form No. 12BB
9. Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property
10. Adjustment for Excess or Shortfall of Deduction
11. Salary Paid in Foreign Currency:
12. Deduction of Tax at Lower Rate on the basis of certificate from jurisdictional TDS officer of the Taxpayer
13. Due dates for payment of TDS
14. Compulsory filing of Statement by PAO, Treasury Officer, etc in case of payment of TDS by Book Entry u/ s 200 (2A):
15. Payment by an Income Tax Challan
16. Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted
17. Furnishing of Certificate for Tax Deducted in Form-16-Essential points regarding the filing of the Statement and obtaining TDS certificates.
18. Authentication by Digital Signatures
19. Furnishing of particulars pertaining to perquisites, etc in Form 12BA
20. Rectification of mistake in filing TDS Statement
21. TDS on Income from Pension
The circular contains detailed working and illustrations on computation of income under the head “Salaries” with valuation of any benefit or amenity given to the employee, deductions under Chapter VIA and rebate u/s 87A. Regarding deductions claimed by the employees, the Drawing and Disbursing Officers should satisfy themselves about the actual deposits/ subscriptions / payments made by the employees, by calling for such particulars/ information as they deem necessary before allowing the aforesaid deductions. In case the DDO is not satisfied about the genuineness of the employee’s claim regarding any deposit/ subscription/ payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer.