Guidelines/Certain clarifications on recovery of income Tax for financial year 2016-17

Guidelines and Certain clarifications on recovery of Income tax for financial year 2016-17, Deduction of Income tax at source financial year 2016-17,payment of salaries to employees and Pensions to Pensioners. Circular Memo No.H6/1164/2017,dated:16/2/17-Guidelines and Certain clarifications on recovery of incometax for financial year 2016-17

GOVERNMENT OF ANDHRA PRADESH: Sub:-Treasuries & Accounts Department-payment of salaries to employees and Pensions to Pensioners - Deduction of Income tax at source financial year 2016-17- Reiterating uniform observance in all the sub treasuries - Regarding.

SECTION 192: Tax has to be deducted from the salary paid as per Section 192 of Income Tax Act. As per Section 192 the
  1.  TDS has to be made
  1. By any person Responsible for paying salary "i." ODO
  1. At the time of payment.
  1. At rates applicable for the financial year.
  1. At average rate of Income Tax at each payment. (IMP)
  1. On estimated income of assessee I payee.
  1. If a person is employed under more than one employer during the year he has to file form 128 with new employer I ODO giving details of the other salary (see rule 26A)
  1. W.e.f. 01.06.2016, the employee shall furnish to the ODO the evidence or the particulars for the claims towards HRA, LTC, Loss from House property and Deductions in Form No. 1288 (Rule 26C of the IT Act)
  1. 9. If there is income other than salaries such as income from other sources, Income I Loss form property - Statement to be filed under Rule 268. e.f. 01.06.2016, such statement should be accompanied by Form of Verification given in Rule 26C.
  1. Person paying perquisite may himself pay tax on perquisite portion of salary at the average tax.
  1. Salary includes pension. (IMP)
  1. ODO shall insist for proof of savings from the Employees I Pensioners.
Estimation of Salary Income: Salary means any amount paid by employer to employee and it includes:
  1. Wages, 2) Any annuity or Pension, 3) Any gratuity, 4) Any advance of Salary, 5) Any fees, Commission, perquisites or profits in lieu of or in addition to any salary or wages.
  1. 6. Any Payment received by an employee while in service in respect of any period of leave not availed of by him.
  1. 7. a) The portion of the annual accretion in any previous year to the balance at the credit of an employee participating in a recognized provident fund, consisting of employers contribution in excess of 12% of the
  1. b) Interest credited on the balance in so far as it exceeds 9.5%.
  1. Transferred balance in a recognized provident fund to the extent to which it is chargeable to tax under sub - rule (4) of Rule 11 of part A of the 4th Schedule.
  1. Contribution made by the Central Government in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD
  1. Accumulated balance from EPF, if includible in total income, if exceeds Rs. 50,000/- u/s. 192A of the Income Tax Act. Tax ha to be calculated on the estimated income, after giving credit to the TDS already made, the amount of tax to be dividend by the number of months for which employee has rendered the service during the financial year (if whole year, divide by 12). The resultant amount shall be the amount of TDS to be calculated each month. Relief when salary etc. Is paid in arrears or in advance: Where the total income assessed is at higher rate than at the normal rate due to treason of receipts of salary I profits in lieu of salary, the assessee can apply for relief u/s 89 (1) of the l.T. Act. (in prescribed Form No. 1 OE) before ODO. Other income to be included by ODO: The ODO shall take such other income and tax, it any deducted at source from such income, and the loss, if any, under the head "into account for the purpose of computing tax deductible u/s 192 of the l.T. Act.
  1. 1. Office of the Government (pay and Accounts Officer or Treasury Officer or Cheque Drawing and Distributing Officer) responsible for crediting tax deducted at source to the credit of the Central Government by Book - entry are now required to electronically file a monthly statement in a new form No. 24G containing details of credit of TDS to the NSDL I Tin facilitation centres authorized by the Director General of Income - Tax (system)
  1. Due date for furnishing TDS return for the last quarter of the Financial Year has. been modified to 3151 May (from earlier is" June). ·
Tax Deduction at Source from Salaries during the Financial Year 2016-17. Resident Individuals aged Resident Individuals aged Resident Individuals Tax Rate below 60 years between 60 - 80 Years aged 80 Years and above Upto 2,50,000 Upto 3,00,000 Upto 5,00,000 Nil Between 2,50,001 - Between 3,00,000 - - 10% 5,00,000 5,00,000 Between 5,00,001 - Between 5,00,001 - Between 5,00,001 - 20% 10,00,000 10,00,000 10,00,000 Above 10,00,000 Above 10,00,000 . Above 10,00,000 30% Education Cess: 3% of Income Tax. Rs. 5000 rebate on income tax payable as per section 87A of IT Act. If the Taxable income is less than 5 lacs. The deductions available under the income tax act are given below. The chart show outline of the deductions available. The actual allow ability, procedure to be followed; conditions to be adhered to, certificates to be obtained and other details are specific to each individual and are to be worked out by DDOs.
  1. No.
Section Details of deductions Quantum 1 BOC General deduction for investment In PPF, PF, Life Insurance, ULIP Stamp duty on house, Fixed Deposits for 5 years, bonds etc,. Maximum Rs. 1,50,000 is allowed. Investment need not form 2 BO CCC Deduction in case of contribution to pensioner fund. However, it should be noted that surrender value or employer contribution Maximum is Rs. 1,50,000/- 3 BO CCD Deduction in respect to contribution To new pension scheme. Employees of Central and others are eligible. Maximum is sum of employer's and employee's Contribution to the maximum: 10% of salary. Note: - Mandatory deduction from salary for retirement savings upto 1.5 lack is to be classified under BO ccd (i). If the taxpayer contributes more than Rs. 1.5 lac to the NPS in a year, the amount in excess of Rs. 1.5 lac can be treated as voluntary investment and can be claimed as a deduction under the New Section BO CCD (ib). In case of any doubt I dispute, please obtain clarification from local ITO, as there are different opinions on it. 4 BO CCE it should be noted that as per Section BO CCE, the maximum amount Of deduction which can be claimed in aggregate of BOC, BOCCC & BO CCD is Rs. 1,50,000/-. 5 BOC CG Those investors whose annual income is less than Rs. 10 Lacks Can invest in this scheme up to Rs. 50,000/- (Maximum amount Eligible for income tax rebate is Rs. 50,000), you can claim a tax Deduction of Rs. 25,000/- (50% of Rs. 50,000). Full details to be Ascertained before investment.
6 BOD Medical insurance of self, Spouse, Rs. 30,000 for self, spouse & Children. Extra Rs.
Children or parents 15,000 For insurance on parents. If parents are
above 65 years Extra sum should be read as Rs. 20,000/-. The maximum Is Rs. 60,000 per
7 BODD Medical treatment of dependent Upto Rs. 75,000/- (Rs. 1,25,000 in case of person with disability (subject to se\(ere disability) production of medical certificate as prescribed) Expenditure on medical treatment of specified ailments (Rule 11 DD) B BOD DB for Medical treatment of self Or relative Actual amount paid to the extent of Rs. 40,000. suffering from Specified disease. In case of Patent being Senior Citizen, Amount is Rs. 60,000/- In case of Super Senior Citizen Amount is Rs. 80,000/-
9 80E for interest payment on loan Taken for Actual amount paid as interest and start form the
higher studies for self Or education of spouse or children financial year in which he I she starts paying Interest is paid in full.
10 BOG Donations to charitable Institution (This concession shall not be allowed by ODO. It should be claimed by assesse from Income Tax department) 100% or 50% of amount of donation made to 19 entities (National defence fund, Prime Minister relief fund etc.,)
11 80 GG for rent paid This is only for people not getting Any House
Rent Allowance. Maximum is Rs. 5,000 per month Rule 11 B is method of computation. Declaration to be obtained from Assesse by the ODO that they don't own a house.
12 80GGA for donation to entities in Scientific research or rural Development. Only those tax payers who have no business income Can claim this deduction. Maximum is equivalent to 100% Of donation. 13 80 GGC for contribution to political Parties 100% of donations provided the payment is through cheque. 14 80 QQB Allowed only to resident authors For Royalty income or Rs. 3,00,000 whichever is royalty income for books Other than less. text book. 15 80 RRB for income receipt as royalty on actual royalty or Rs. 3, 00, 000 whichever is less. Patents or resident individuals 16 80TTA Deduction from gross total income in respect of any Income by way of interest on Savings account Deduction from gross total income of an individual, upto a maximum of Rs. 10,000/-, in respect of interest on deposits in Savings account (not time deposits) with a bank, co-operative society or post office, is allowable w.e.f. 01.04.2012 (Assessment year 2013-14). 17 80 u deduction in respect of permanent Physical disability including blindness To taxpayer Rs. 75,000 which goes to Rs. 1,25,000 in case tax payer is suffering form Severe disability.
Guidelines/Certain clarifications on recovery of income Tax for financial year 2016-17

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