DIRECT & INDIRECT TAXES TAXES – TDS &TCS TDS &TCStraining.bsnl.co.in/digital_library_source/upgradation/e3e4/E3-E4... · Taxes –TDS &TCS . Eligibility: Those who have got the

For Internal Circulation of BSNL Only

E3E3--E4 FINANCEE4 FINANCE

Mandatory Training ProgramMandatory Training Program

DIRECT & INDIRECT DIRECT & INDIRECT

TAXES TAXES –– TDS &TCSTDS &TCS

25 March 2011

WELCOME

This is a presentation for the E3-E4 (Finance)

Core Module for the Topic: Direct & Indirect

Taxes –TDS &TCS .

Eligibility: Those who have got the Up gradation

from E3 to E4.

This presentation is last updated on 21-3-2011.

You can also visit the Digital library of BSNL to

see this topic.

25 March 2011 For BSNL Internal Circulation Only

AGENDA

Income Tax on salaries

Various items under salary

Important Perquisites

TDS &TCS


TDS &TCS

Salaries - Section 192

Payment of rent - Section 194-I

Payment to contractors - Section 194-C

Fees for professional and Technical services - Section 194-J

Commission or Brokerage - Section 194 H

Sale of scrap - Section 206-C

For BSNL internal circulation only25 March 2011

MEANING OF CERTAIN EXPRESSIONS

Previous Year (Sec 3): The year in which the

income is received or otherwise earned.

Assessment Year [Sec 2(9)]: The income is

assessed to tax in the year commencing on

1st April next following the close of previous

year.

For BSNL internal circulation only25 March 2011


Assessee [sec 2(7)]: a person by whom

Income Tax is payable under Income Tax

Act.

Person includes [Sec 2(31)]- an individual, a

HUF, a company, a firm, an AOP/BOI, a local

authority and every artificial juridical person.



Tax Deduction Account Number (TAN)

49 B

Permanent Account Number (PAN)

49 A


HEADS OF INCOME

Income of a person falls under

1. Salaries

2. Income from house property

3. Profits and gains from business or profession

4. Capital gains

5. Income from other sources


INCOME TAX ON SALARIES (SEC 192)

I. Salaries [Sec 17(1)]:BP, SP, PP, DA, DP, IR, OTA,

Leave encashment while in service,

Leave salary while on leave,

Tuition fees, Honoraria,

Other allowances,

Bonus etc.


EXEMPTED INCOME

(i) HRA - Least of (a) rent paid in excess of

10% salary

(b) HRA received

(c) 50%/40% salary

(ii) Death/Retirement Gratuity

(iii) Commuted value of pension

(iv) Cash equivalent of leave salary


EXEMPTED INCOME

(v) Leave travel concession

(vi) Traveling allowance including DA

(vii) Conveyance allowance

(viii) Uniform allowance

(ix) CEA, Hostel expenditure for children

(x) Transport allowance


INCOME TAX ON SALARIES

II. Total salary income

Less: Profession tax Paid

III. Gross total income

Add: Add Taxable perquisites


TAXABLE PERQUISITES

Major Perquisites which are

taxable:A. Medical

B. Accommodation

C. Interest free or concessional loans


A. MEDICAL

Medical facilities:

1. Fixed medical allowances - fully taxable

2. Treatment in hospital:

(i) Maintained by employer -Not taxable

(ii) Maintained by Central, State Govt.,

local authority - Not taxable

(iii) Approved by Chief

Commissioner of IT - Not taxable


A. MEDICAL

(iii) Maintained by any other person but

approved by the Govt. for the treatment of

its employees - Not taxable

(iv) Health insurance policy (i.e. group medical

insurance premium) - Not taxable

(iv) Maintained by other persons – Up to

Rs.15,000 - Not taxable


B. ACCOMMODATION (AY 2006-07

ONWARDS)

1. Rent free unfurnished accommodation provided by any employer other than

Central or State Government.

City Accommodatio

n owned by the

employer

Accommodation is

taken on lease or rent

by the employer

Population exceeding

25 L as per 2001 census

15% of salary Lease rent or 15% of

salary whichever is

lower

Population exceeding

10 L but not exceeding

25 L

as per 2001 census

10% of salary Same as above

Any other city 7.5% of salary Same as above


B. ACCOMMODATION

2.Accommodation provided at

concessional rent:Un furnished accommodation provided by any

employer other than Central and State Governments-

difference between the amount at B.1 and the rent

recoverable or payable by the assessee


B. ACCOMMODATION

3. Rent free furnished accommodation (not being in

hotel) -

The charges at B.1 + 10% of cost of furniture or

actual hire charges of furniture, if hired.

Rent free furnished accommodation in a Hotel

(includes Guest house) - 24 % of salary or actual

charges paid by the employer whichever is lower


B. ACCOMMODATION

Salary includes all monetary

payments except exempted allowance

& perquisites, DA if not considered for

retirement benefits.


C. INTEREST FREE & CONCESSIONAL

LOAN FROM EMPLOYER

Loans above Rs.20,000/-

Perquisite = Lending rate of SBIs - Interest

actually recovered for the year

Calculation is based on the maximum

outstanding balance on the last day of each

month

Loans for medical purpose are out of

purview of this section


SBI LENDING RATES

(AY 2010-11)

Housing

loan

Up to 5 years

Above 5 years but up to 15 years

Above 15 years but up to 20 years

09.75%

10.00%

10.25%

Car loan Up to 3 years (Rs.7.5 lakhs & above

Up to 3 years (below 7.5 lakhs)

Above 3 years and up to 5 years

Above 5 years and up to 7 years

11.50%

11.75%

11.75%

12.00%

Two Wheeler

loan

16.25%


INCOME FROM HOUSE PROPERTY (SEC 22)

1. Let out house propertyGross annual Value xxxx

(Municipal valuation or Fair rent whichever

is higher subject to max. of Standard Rent.

If the actual rent received/receivable is

higher then that is the gross annual value)

Less Municipal taxes xxxx

Net annual value xxxx


INCOME FROM HOUSE PROPERTY

Less deduction under sec 24:

1.Standard deduction 30% of net

annual value xxxx

2. Interest on borrowed capital xxxx

(Accrual Basis, No max. limit)

Interest on pre-construction period in 5 equal

instalments from the construction year

Income from house property xxxx



2. Self Occupied Property

Gross annual value Nil

Less Municipal taxes Nil

Net annual value Nil



Less deduction under sec 24:

1. Standard deduction 30% Nil

2. Interest on borrowed capital xxxx

Capital is borrowed before 1-4-1999 - Max Rs.30,000.

Capital is borrowed on or after 1-4-1999 & the house

is acquired/constructed within 3 years from the end of

F.Y in which the capital is borrowed – Max.

Rs.1,50,000 (Accrual basis).

Interest on pre-construction period in 5 equal

instalments from the construction year

Income from house property xxxx



Total Salary incomeLess deductions: Deductions under

(i) 80C/80CCC/80CCD - Restricted to Rs.1,00,000

(ii) 80CCF Investment in notified infrastructure bonds

Rs.20,000 (from F.Y. 2010-11)

(ii) 80D - Med Insurance - Rs.15,000.

For Sr. citizen - Rs.20,000/-



(iii) 80DD Med treatment for

handicapped Rs.50,000/-

(iv) 80 DDB Med treatment for specified

illness-Rs.40,000

(v) 80E Interest on education loan

(vi) 80G Donation to National Fund

( limited extent. No deduction by DDO, but can claim

for refund)

(vii) 80 U Individual with disability

Rs.50,000/-



5. Surcharge - 10% on IT if net income exceeds

Rs.10 Lakhs

(Withdrawn from the year 2009-10 onwards)

Surcharge for Domestic Company:

7.5% if net income exceeds Rs. 1 Crore.

6. Education cess - 2%

7. Secondary & Higher

education cess - 1%

8. Computation of average IT


TDS ON PAYMENT OF RENT OF LAND/BUILDING/FURNITURE/FITTINGS

Rent Means- any payment for the

use of any land or any building

(including factory) together with

furniture and fittings


TDS ON PAYMENT OF RENT OF

LAND/BUILDING/FURNITURE/FITTINGS

Rent includes- Non-refundable deposit,

Advance rent, rent for space sub-let for

hoardings, rent for hiring of halls/Grounds

for holding seminars/exhibitions, ware

housing charges, hotel room rent if hired

regularly, site sharing expenses, composite

payment for rent and services or amenities.


TDS RATES

When rent exceeds Rs.1,20,000 during a

financial year (Rs.1,80,000 w.e.f. 1-7-

2010 )

1.Rent of Land /Building/ Furniture/

Fittings - 10%

2.Rent of Plant or Machinery or

Equipment - 2%


TDS FOR THE WORKS

DONE BY CONTRACTORS

Tax shall be deducted at

source-On payments for contracts

On payment towards advance

On gross amount including reimbursements and

cost of materials


TDS FOR THE WORKS DONE BY

CONTRACTORS OR SUB CONTRACTORS

If the payment exceeds 20,000 (Rs.30,000

w.e.f 1-72010) in a single payment or Rs.50,000

(Rs,75,000 w,e,f 1-7-2010) in a financial year, TDS

will be

(a) Individual or HUF - 1%

(b) Other than Individual or HUF - 2%

No TDS from the payment to the contractor of

goods carriage service, if he furnishes PAN w.e.f

1-7-2009


TDS ON PROFESSIONAL AND

TECHNICAL SERVICES

If the annual payment exceeds 20,000/-

(Rs.30,000 w.e.f. 1-7-2010)

Tax payable is 10%


TDS ON INTEREST OTHER THAN

INTEREST ON SECURITIES

Exceeding Rs.5,000 (Interest paid by

Banks/PO/Co-operative Society exceeds

Rs.10,000/-)

TDS rate is - 10%


TDS ON COMMISSION OR

BROKERAGE

If the amount of

payment exceeds Rs.2,500/-

( Rs.5,000 w.e.f. 1-7-2010)

Tax payable is 10%


TAX COLLECTION AT SOURCE (SEC 206 C)

Every person, being a seller, shall collect

from the buyer of goods specified in section

206 C tax at source.


If Deductiee fails to furnish

PAN to Deductor,

TDS will be 20%

w.e.f. -01-04-2010


PAYMENT EXCEEDING RS.20,000

BY CHEQUE [SEC-40A(3)]

If a payment exceeding Rs.20,000/- is

made through cash, 100% of the payment

(20% up to F.Y 2006-07) will be disallowed

for the purpose of calculation of profit as

per IT Act, which results in extra burden

of corporate tax to the extent of 33.99% of

the amount for BSNL


E - TD RETURNS

Returns to be filed every quarter, due dates

are 15th July 15th October, 15th January and

30th June


RETURN /ASSESSMENT OF INCOME

When return is to be filedCompany - Any income or loss

A person other than a - If the total income

Company exceeds the

maximum amount

which is not charge-

able to IT


TIME FOR FILING RETURN OF INCOME

Where the assesee is a

company - By 31st October

Other cases (Individual) - By 31st July



Documents

DIRECT & INDIRECT TAXES TAXES – TDS &TCS TDS &TCStraining.bsnl.co.in/digital_library_source/upgradation/e3e4/E3-E4... · Taxes –TDS &TCS . Eligibility: Those who have got the