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Claim relief if you feel deduction is wrong
B S Jindal & Akhil Jindal
The announcement of the Fifth Pay Commission and the provisions of the arrears to the employees along with the normal emoluments has brought the tedious job of deducting Tax Deducted at Source(TDS), from their salaries. The frequent changes and the Board's instructions have further complicated the matters for the employers. It is advised that in case the employee feels that his income has been assessed at a rate higher than that at which it would otherwise have been assessed in earlier years for which arrear has been received, he can claim relief under section 89(1)The Board, in a circular dated Oct 29, 1997, specified the rates of tax deduction from the payments on the income chargeable to tax under the head salaries' during the Financial Year - 1997-98.(see table) The basic important features of the circular are reproduced below: Every person who is responsible for paying Income Tax on income chargeable to tax under the head "Salaries" shall deduct Income Tax on the estimated income of the assessee
under the head "Salaries" for the Financial Year - 1997-98. The Income Tax has to be deducted on average at the time of each payment.
Where an individual is working under more than one employer or has changed from one employer to another, it provides for deduction of tax at source by such employer (as the tax payer may choose) from the aggregate salary of the employee who is or has been in receipt of 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 "Salary" due or received from the former/other employer and also tax deducted at source there, from the former/other employer and also tax deducted at source there, 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. The present employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former of other
employer). Sub-section (2B) enables a tax payer to furnish particulars of income under any head other than "Salaries" and of any tax deducted at source thereon in the prescribed form (No. 12C). Such income under any other head should not be a loss. The employer shall take such other income and tax, if any, deducted at source from such income, into account for the purpose of computing tax deductible under section 192 of the Income Tax Act.
The assessee can now file return on floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media it shall be deemed to be a return for the purposes of section 206 and the rules made there under, and shall be admissible in any proceeding there under, without further proof of production of the original, as evidenced of any contents of the original or of any fact stated therein.
This return has to be furnished in Form No. 24. If a person fails to furnish in due time the annual return, he shall be liable to pay by way of penalty under section
272A, a sum which shall not be less than Rs 100 but which may extend to Rs 200 for every day during which the failure continues. However, this sum shall not exceed the amount of tax which was deductible at source.
The relevant challan for making the payment of tax deducted at source from salary is No. 9 with blue colour band. While making the payment of tax to the Credit of Central Government the correct amount of Income Tax should be filled in the challan.
In the case of pensioners who receive their pension from a nationalised bank, the instructions contained in this circular shall apply in the same manner as they apply to salary income. The deductions from the amount of pension on account of standard deduction under section 16 and the tax rebate under section 88B (in the case of pensioners, resident in India, who are 65 years of age or more) will be allowed by the concerned bank at the time of deduction of tax at source from the pension, before making payment to the concerned
pensioner.
Where non-residents are deducted to work in India and taxes are borne by the employer, if any refund becomes due to the employee after he has left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it : (Circular No 707, dated 11.7.1995) (The computation of salary will be discussed in the next article) The Jindals are Delhi-based chartered accountants
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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