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Rate of deduction
| Rates for Individuals below 60 years | |
| Income slabs | Income tax rate |
| Income up to Rs. 2.50 lakhs | Nil |
| Rs. 2.50* to Rs. 5 lakhs | 5% |
| Rs.5 Lakhs to Rs. 10 Lakhs | 20% |
| Rs. 10 lakhs above | 30% |
| Rates for Individuals below 60 years below 80 Years | |
| Income slabs | Income tax rate |
| Income up to Rs. 3 lakhs | Nil |
| Rs. 3* to Rs. 5 lakhs | 5% |
| Rs.5 Lakhs to Rs. 10 Lakhs | 20% |
| Rs. 10 lakhs above | 30% |
| Rates for Individuals 80 years & above | |
| Income slabs | Income tax rate |
| Income up to Rs. 3 lakhs | Nil |
| Rs. 3 to Rs. 5 lakhs | Nil |
| Rs.5 Lakhs to Rs. 10 Lakhs | 20% |
| Rs. 10 lakhs above | 30% |
| *Provide a tax credit of Rs. 12500/- to every person who has a total income upto Rs. 5 Lakh. Surcharge of 10% on Income tax those taxable income exceeds Rs. 50 Lakhs and less than 1 crore will apply. Surcharge of 15% on Income tax those taxable income exceeds Rs.1.00 crore will but less than Rs. 2.00 crore. Surcharge of 25% on Income tax those taxable income exceeds Rs.2.00 crore will but less than Rs. 5.00 crore. Surcharge of 37% on Income tax those taxable income exceeds Rs.5.00 crore. |
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| Education cess will apply 4% on the Income tax & Surcharge will apply for all. | |
Income Tax Act, 1961
OVER VIEW OF THE TDS PROVISIONS
Introduction: Section 192 of the I.T.Act, 1961 provides that every person responsible for paying any income which is chargeable under the head ‘salary’, shall deduct income tax on the estimated income of the assessee under the head salaries.
The tax is required to be calculated at the average rate of income tax as computed on the basis of the rates in force. The deduction is to be made at the time of the actual payment. However, no tax is required to be deducted at source, unless the estimated salary income exceeds the maximum amount not chargeable to tax applicable in case of an individual during the relevant financial year.
The tax once deducted is required to be deposited in government account and a certificate of deduction of tax at source (also referred as Form No.16) is to be issued to the employee. This certificate is to be furnished by the employee with his income tax return after which he gets the credit of the TDS in his personal income tax assessment. Finally, the employer/deductor is required to prepare and file quarterly statements in form No.24Q with the Income-tax Department.
When is tax to be deducted: Section 192 casts the responsibility on the employer, of tax deduction at source, at the time of actual payment of salary to the employee. Unlike the provisions of TDS, pertaining to payments other than salary where the obligation to deduct tax arises at the time of credit or payment, which ever is earlier, the responsibility to deduct tax from salaries arises only at the time of payment. Thus, when advance salary and arrears of salary has been paid, the employer has to take the same into account while computing the tax deductible.
Time limit for deposit:
1. Where deduction is made by or on behalf of the Government, without the production of challan, the payment has to be made on the day of tax deduction itself.
2. In other cases of deposition by the Government vide a challan, the payment has to be made within seven days (7
days) of the last day of the month in which the deduction is made or income-tax is due under section 192(1A).
3. In case of a deductor other than Government, the payment is to be made before 30th day of April where income or amount is credited or paid in the month of March.
4. In other cases of deduction by non-government deductors, payment has to be made within seven days from the end of month in which deduction is made or Income-tax is due under sub-section 1-A of Sec. 192.
5. However, vide Rule 30(B), the Assessing Officer can, in special cases with the prior approval of joint Commissioner of Income Tax, allow payment of TDS quarterly, i.e. by 7th of July for the quarter ending 30th of June, by 7th of October for the quarter ending 30th September, by 7th of January for the quarter ending 30th of December and by 30th of April for the quarter ending 31st of March.
Who is to deduct tax:
The statute requires deduction of tax at source from the income under the head salary. As such the existence of “employer-employee” relationship is the “sine-qua-non” for taxing a particular receipt under the head salaries. Such a relationship is said to exist when the employee not only works under the direct control and supervision of his employer but also is subject to the right of the employer to control the manner in which he carries out the instructions. Thus the law essentially requires the deduction of tax when;
(a) Payment is made by the employer to the employee.
(b) The payment is in the nature of salary and
(c) The income under the head salaries is above the maximum amount not chargeable to tax.
For the various categories of employers, the persons responsible for making payment under the head salaries and for
deduction of tax are as below:
In the case of,
1. Central/State Government/P.S.U = The designated drawing & disbursing officers.
2. Private & Public Companies = The company itself as also the principal officer thereof.
3. Firm = The managing partners/partner of the firm.
4. HUF = Karta of the HUF
5. Proprietorship concern = The proprietor of the said concern.
6. Trusts = Managing trustees thereof.
In case of a company, it is to be noted, that though the company may designate an officer /employee to make payments on the behalf of the company, still the statutory responsibility to deduct tax at source rests with the company and its principal officer thereof. In respect of companies, the I.T.Act Section 2(35) has specified principal officer to mean:
(a) Secretary, Treasurer, Manager or agent of the company.
(b) Any person connected with the management or administration of the company or upon whom the assessing officer has served the notice of his intention to treat him as a principal officer.
To know more…. Please refer Income Tax Act, 1961 and rules (latest notifications and circulars – CBEC)