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All Deductions under Chapter VI-A for Salaried Employee in Asstt. Year 2013-14

I would like to inform to all Salaried Employee about Income Tax Deduction sections under Chapter VI-A for the Assessment Year 2013-14 which help us to get exemption fromIncome Tax and remit your tax liability in thefinancial year 2012-13.

 

In computing the taxable income of the employee, the following deductions under Chapter VI-A of the Act are to be allowed from his gross total income:

 

Deduction U/s. 80C:

Deduction in respect of Life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. (section 80C)

 

Section 80C, entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs. 1,00,000/-:

(1)         Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.

(2)         Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

(3)         Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum deducted does not exceed 1/5th of the salary;

(4)         Any contribution made :

·               by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies;

·                to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children; [The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E), dated 3-11-2005]

·               by an employee to a Recognized Provident Fund;

·               by an employee to an approved superannuation fund; It may be noted that “contribution” to any Fund shall not include any sums in repayment of loan;

(5)         Any subscription :-

·               to any such security of the Central Government or any such deposit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;

·               to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by notification in the Official Gazette, specify in this behalf. [Central Government has since notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E), dated 3-11-2005 and National Saving Certificate (IXth Issue) vide Notification S.O. No. (E), dated 29-11-2011 F. No. l-13/2011-NS-II]

(6)         Any sum paid as contribution in the case of an individual, for himself, spouse or any child,

·               for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust of India;

·               for participation in any unit-linked insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as notified by the Central Government. [The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No. 1561(E), dated 3-11-2005.]

(7)         Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notificationin the Official Gazette, specify; [The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I New Jeevan Akshay, New Jeevan, Akshay-I and New Jeevan Akshay-II vide Notification S.O. No. 1562(E), dated 3-11-2005 and Jeevan Akshay-III vide Notification S.O. No. 847(E), dated 1-6-2006]

(8)         Any subscription made to any units of any Mutual Fund, of section 10(23D), or from the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002 under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf; [The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E), dated 3-11-2005]

The investments made after 1-4-2006 in plans formulated in accordance with Equity Linked Saving Scheme, 1992 or Equity Linked Saving Scheme, 1998 shall also qualify for deduction under section 80C.

(9)         Any contribution made by an individual to any pension fund set up by any Mutual Fund referred to in section 10(23D), or, by the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

[The Central Government has since notified UTI-Retirement Benefit Pension Fund videNotification S.O. No. 1564(E) dated 3-11-2005.]

(10)     Any subscription made to any such deposit scheme of, or, any contribution made to any such pension fund set up by, the National Housing Bank, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(11)     Any subscription made to any such deposit scheme, as the Central Government may, bynotification in the Official Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both.

[The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O. No. 37(E), dated 11-1-2007, for the purposes of Section 80C(2)(xvi)(a)].

(12)           Any sums paid by an assessee for the purpose of purchase or construction of a res dential house property, the income from which is chargeable to tax under the head “Income from house property” (or which would, if it has not been used for assessee’s own residence, have been chargeable to tax under that head) where such payments are made towards or by way of any instalment or part payment of the amount due under any self-financing or other scheme of any Development Authority, Housing Board etc.

The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act.

 

The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out. Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Act will also not be included in payments towards the cost of purchase or construction of a house property.

 

Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly.

(13)           Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee.

 

Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, pre-nursery and nursery classes.

 

It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature.

(14)           Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution.

(15)           Subscription to any units of any mutual fund referred to in clause (23D) of Section 10 and approved by the Board, if the amount of subscription to such units is subscribed only in eligible issue of capital of any company.

(16)           Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes.

[The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28-7-2006]

(17)           Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf.

(18)           Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004.

(19)           Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.

Section 80C(3) & 80C(3A) states that in case of Insurance Policy other than contract for a deferred annuity the amount of any premium or other payment made is restricted to:

Policy issued before 1st April 2012	20% of the actual capital sum assured
Policy issued on or after 1st April 2012	10% of the actual capital sum assured

From 1-4-2013 actual capital sum assured in relation to a life insurance policy means the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account –

i.                    the value of any premiums agreed to be returned, or

ii.                  any benefit by way of bonus or otherwise over and above the sum actually assured which may be received under the policy by any person.

 

Deduction U/s. 80CCC:

 

Section 80CCC allows an employee deduction of an amount paid or deposited out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the Fund referred to in section 10(23AAB). However, the deduction shall exclude interest or bonus accrued or credited to the employee’s account, if any and shall not exceed Rs. 1 lakh.

 

However, if any amount is standing to the credit of the employee in the fund referred above and deduction has been allowed as stated above and the employee or his nominee receives this amount together with the interest or bonus accrued or credited to this account due to the reason of :

·         Due to surrender annuity plan whether in whole or part

·         Pension received from the annuity plan

then the amount so received during the Financial Years shall be the income to the employee or his nominee for that Financial Year and accordingly will be charged to tax.

Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

 

Deduction U/s. 80CCD :

 

Section 80CCD allows an employee, being an individual employed by the Central Government or any other employer, on or after the 1-1-2004, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified or as may be notifed by the Central Government, vide Notification F. N. 5/7/2003- ECB&PR, dated 22-12-2003. However, the deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites).

 

Further where in the case of an employee receives any contribution in the said pension scheme from the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year.

 

However, if any amount is standing to the credit of the employee in the pension scheme referred above and deduction has been allowed as stated above and the employee or his nominee receives this amount together with the amount accrued thereon, due to the reason of

·         Closure or opting out of the pension scheme or

·         Pension received from the annuity plan purchased and taken on such closure or opting out

then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax.

 

Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

 

Further it has been specified that w.r.e.f 1-4-2009 any amount received by the employee from the new pension scheme shall be deemed not to have received in the previous year if such amount is used for purchasing an annuity plan in the previous year.

 

It is emphasized that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs. 1,00,000/-. However the contribution made by the Central Government or any other employee to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs.1,00,000/- provided under this Section.

 

Deduction U/s. 80CCF :

Section 80CCF has been withdrawn from FY 2012-13. Hence no deduction is allowable under this section for the current FY onwards.

 

Deduction U/s. 80 CCG:

 

Newly inserted Section 80CCG provides deduction w.e.f. assessment year 2013-14 in respect of investment made under notified equity saving scheme. The deduction under this section is available if following conditions are satisfied:

(a)    The assessee is a resident individual (may be ordinarily resident or not ordinarily resident)

(b)    His gross total income does not exceed Rs. 10 lakhs;

(c)     He has acquired listed shares in accordance with a notified scheme;

(d)    The assessee is a new retail investor as specified in the above notified scheme;

(e)     The investment is locked-in for a period of 3 years from the date of acquisition in accordance with the above scheme;

(f)      The assessee satisfies any other condition as may be prescribed.

Amount of deduction -The amount of deduction is at 50% of amount invested in equity shares. However, the amount of deduction under this provision cannot exceed Rs. 25,000. If any deduction is claimed by a taxpayer under this section in any year, he shall not be entitled to any deduction under this section for any subsequent year.

 

Withdrawal of deduction – If the assessee, after claiming the aforesaid deduction, fails to satisfy the above conditions, the deduction originally allowed shall be deemed to be the income of the assessee of the year in which default is committed.

 

A scheme named “Rajiv Gandhi Equity Savings Scheme (RGESS)” is being notified for the purpose of this deduction.

 

Deduction U/s. 80D :

Section 80D provides for deduction available for health insurance premia paid, etc. which is calculated as under:

Sl. No.	Persons for whom payment made	Nature of payment	Mode of payment	Allowable Deduction (in Rs.)
1	Employee or his family	♦  the whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family or  ♦  any contribution made to the CGHS or  ♦  any payment on account of preventive health check-up of the employee or family, [restricted to Rs. 5000/-; cash payment allowed here]	any mode other than cash	Aggregate allowable is Rs. 15,000/{For Senior Citizens it is Rs. 20000/-}.
2	Parent or Parents of employee	♦  the whole of the amount paid to effect or keep in force an insurance on the health of the parent or parents of the employee or   ♦  any payment made on account of preventive health check-up of the parent or parents of the employee [restricted to Rs. 5000/-; cash payment allowed here]	any mode other than cash	Aggregate allowable is Rs. 15,000/ than {For Senior cash Citizens it is Rs. 20000/-}

Here

(i)                 “family” means the spouse and dependent children of the employee.

(ii)               Senior citizen” means an individual resident in India who is of the age of sixty years {For AY 2013-14 onwards] or more at any time during the relevant previous year.

The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by-

(a)   the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalization) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or

(b)   any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999(41 of 1999).

Deductions in respect of expenditure on persons or dependants with disability

Deduction U/s. 80DD :

Under section 80DD, where an employee, who is a resident in India, has, during the previous year-

(a)   incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or

(b)    paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in this regard and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the employee shall be allowed a deduction of a sum of fifty thousand rupees from his gross total income of that year.

However, where such dependant is a person with severe disability, an amount of one hundred thousand rupees shall be allowed as deduction subject to the specified conditions.

The deduction under (b) above shall be allowed only if the following conditions are fulfilled:-

(i)                 the scheme referred to in (b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made;

(ii)               the employee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.

However, if the dependant, being a person with disability, predeceases the employee, an amount equal to the amount paid or deposited under sub-para (b) above shall be deemed to be the income of the employee of the previous year in which such amount is received by the employee and shall accordingly be chargeable to tax as the income of that previous year.

 

Deduction U/s. 80U :

Under section 80U, in computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of fifty thousand rupees. However, where such individual is a person with severe disability, a higher deduction of one lakh rupees shall be allowable.

 

DDOs should note that section 80DD deduction is in case of the dependent of the employee whereas section 80U deduction is in case of the employee himself. However under both the Sections the employee shall furnish to the DDO following:

1.      A copy of the certificate issued by the medical authority as defined in Rule 11A(1) in the prescribed form as per Rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein.

2.      Further In cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority as in 1 above and furnished before the DDO.

3.      For the purposes of section 80DD and 80 U some of the terms defined are as under:-

(a)   “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) ;

(b)   “dependant” means—

(i)                 in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;

(ii)               in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;

(c)    “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and includes “autism”, “cerebral palsy” and “multiple disability” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(d)   “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8) of section 88;

(e)    “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or such other medical authority as may, by notification, be specified by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(f)     “person with disability” means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

                        “person with severe disability” means—

(i)                 a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996); or

(ii)               a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999);

(iii)             “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002).

Deduction U/s. 80DDB :

Section 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, actually paid any amount for the medical treatment of such disease or ailment as may be specified in the rules HDD (1) (see Annexure) for himself or a dependant. The deduction allowed is equal to the amount actually paid or Rs. 40,000 whichever is less. Further the amount paid should also be reduced by the amount received if any under insurance from an insurerer or reimbursed by an employer. In case of a senior citizen (an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year) the amount of deduction allowed is Rs. 60,000/-.

 

DDO must ensure that the employee furnishes a certificate in Form 10-I from a neurologist, an oncologist, a urologist, nephrologist, a haematologist, an immunologist or such other specialist, as mentioned in proviso rule 11(2) of the Rules.

For the purpose of this section in the case of an employee “dependant” means individual, the spouse, children, parents, brothers and sisters of the individual or any of them,

 

Deduction U/s. 80E :

Section 80E allows deduction in respect of repayment of interest on loan taken from any financial institution or any approved charitable institution for higher education for the purpose of pursuing his higher education or for the purpose of higher education of his spouse or his children or the student for whom he is the legal guardian.

 

The deduction shall be allowed in computing the total income for the Financial year in which the employee starts repaying the interest on the loan was taken and immediately succeeding seven Financial years or until the Financial year the interest is paid in full by the taxpayer, whichever is earlier.

 

For the purpose of this section –

(a)                  “approved charitable institution” means an institution established for charitable purposes and approved by the prescribed authority section 10(23C), or an institution referred to in Section 80G(2)(a);

(b)                  “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;

(c)                   “higher education” means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognized by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so;

Deduction U/s. 80G :

Section 80G provides for deductions on account of donation made to various funds , charitable organizations etc. In cases where employees make donations to the Prime Minister’s National Relief Fund, the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund through their respective employers, it is not possible for such funds to issue separate certificate to every such employee in respect of donations made to such funds as contributions made to these funds are in the form of a consolidated cheque. An employee who makes donations towards these funds is eligible to claim deduction under section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G on the basis of the certificate issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf- Circular No. 2/2005, dated 12-1-2005.

 

No deduction under this section is allowable in case of amount of donation if exceeds Rs. 10000/- unless the amount is paid by any mode other than cash.

 

Deductions U/s. 80GG :

Section 80GG allows the employee to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions :-

(a)               the employee has not been in receipt of any House Rent Allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act;

(b)               the employee files the declaration in Form No. 10BA. (Annexure VIII)

(c)                He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG.

(d)               The employee does not own:

(i)     any residential accommodation himself or by his spouse or minor child or where such employee is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

(ii)   at any other place, any residential accommodation being accommodation in the occupation of the employee, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of rent.

 

Deductions U/s. 80 GGA :

Section 80GGA allows deduction from total income of employee in respect of donations of any sum as given in the Table below:

Sl. No.	Donations made to persons	Approval /Notification under Section	Authority granting approval/ Notification
1	To a research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research	u/s 35(l)(ii)	Central Government
2	To a research association which has as its object the undertaking of research in social science or statistical research or to a University, college or other institution to be used for research in social science or statistical research	u/s35(l)(iii)	Central Government
3	To an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA	furnishes the certificate u/s 35CCA (2)	Prescribed Authority under Rule 6AAA
4	an association or institution which has as its object the training of persons for implementing programmes of rural development.	furnishes the certificate u/s 35CCA (2)	Prescribed Authority under Rule 6AAA
5	To a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme.	furnishes the certificate u/s 35AC(2)(a)	National Committee for Promotion of Social & Economic Welfare
7	To a rural development fund	notified u/s 35CCA (1)(c)	set up and notified by the Central Government
8	To National Urban Poverty Eradication Fund	notified u/s 35CCA(l)(d)	set up and notified by the Central Government

No deduction under this section is allowable in case:

(i)                 The employee has gross total income which includes income which is chargeable under the head “Profits and gains of business or profession”.

(ii)               The amount of donation exceeds Rs. 10000 and is paid in cash.

The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of donation and a receipt from the person to whom donation has been made and ensure that the approval/notification has been issued by the right authority. DDO must ensure a self-declaration from the employee that he has no income from “Profits and gains of business or profession”.

 

Deduction U/s. 80TTA :

Section 80TTA has been introduced from this Financial Year [2012-13] and it allows to an employee from his gross total income if it includes any income by way of interest on deposits (not being time deposits) in a savings account a deduction amounting to :

(i)                 in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and

(ii)                in any other case, ten thousand rupees.

If such savings account is maintained in a

(a)   banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);

(b)   co-operative society engaged in carrying on the business of banking (including a cooperative land mortgage bank or a co-operative land development bank); or

(c)    Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),

For this section, “time deposits” means the deposits repayable on expiry of fixed periods.

Enhancement in the rate of used Medical Allowance from Rs. 1200/- to Rs. 2000/- p.m. w.e.f 01.03.2013

EPFO has enhanced the rate of medical allowancefrom Rs. 1200/- to Rs. 2000/- Per month w.e.f. 01.03.2013, payable to the serving as well as retired employees of the EPFO for outdoor medical treatment.  The full notification is as follows:

 

Employees’ Provident Fund Organisation
(Ministry of Labour and Employment, Government of India)

No, HRM-8/V/12/1/2003/FMA/Vol-117/6160

Dated 13 JUN 2013

To,
All Addl. Central P F. Commissioner (Zones)
Director (NATRSS)
All RPFCs-In-Charge of the Region/ZTIs
RPFC (ASDL), Head Office
All Officer-in-charge of SROs

Sub:. Enhancement in the rate of used Medical Allowance from Rs. 1200/- to Rs. 2000/- p.m. w.e.f 01.03.2013, payable to the serving as well as retired employees of the EPFO for outdoor medical treatment – regarding.

Sir, 
I am directed to convey the approval of the 76th Executive Committee, CBT, EPF held 25/02/2013 and Hon’ble Labour & Employment Minister, Government of India for enhancement of the Fixed Medical Allowance (FMA) forpensioners and employees of EPFO from Rs. 1200/- p.m. to Rs 2000/- p.m w.e.f. 1st March, 2013, subject to the following conditions :-

(i) The enhancement of fixed medical allowance will be available to serving employees and pensioners (including family pensioners) of the Employees Provident Fund Organization. The serving employees of the Organization who are in the Head Office at New Delhi and Regional/Sub Regional Office at Delhi and at stations which are covered by the Central Government Health Scheme will not be eligible for Fixed Medical Allowance.  As soon as any employee is covered by Central Government Health Scheme, the fixed medical allowance admissible to him/her shall be stopped.

(ii) If two or more members of family are working in the EPF Organization, only one of them will be eligible for the facility of fixed medical allowance.

(iii) In the case of an employee whose wife/husband spouse is an employee of a Government or any other organization (including private firm/office) he/she will be required to give an undertaking that his/her spouse is not availing of medical facilities in case, lf any granted by their respective employers.

(iv) The Fixed Medical Allowance will be in lieu of the medical facility available for outdoor treatment under the Central Services (Medical Attendance) Ruler 1944 as adopted by the FPF Organization for its own employees andpensioners.

(Authority: Ministry of Labour & Employment, Govt. of India letter no.G-25012/2/2011-SS-I dated 07.06.2013)

 

You faithfully,
sd/-
(V.N. SHARMA)

ADDL. CENTRAL P.F. COMMISSIONER (HR)

Penalty Chart under the Income Tax Act, 1961

Given below is the chart which shows section under which penalty can be imposed, nature of default and quantum of penalty.

PENALTIES UNDER INCOME TAX ACT
Section	Nature of Default	Quantum of penalty
Non Payment
221(1)	Tax payments including  Self Assessment Tax	Amount of tax in arrears
Failure to comply
271(1)(b)	with the notice u/S 115WD(2)/ 115WE(2)/ 143(1)/ 142(2)	Rs. 10,000 of each failure
271(1)(b)	with direction u/s 142(2A) to get audited	Rs. 10,000 of each failure
272A (1)	Failure to answer questions or sign statements	Rs. 10,000 of each failure
Concealment
271(1)(c)	Concealment of income or inaccurate particulars	100 % to 300 % of tax sought to be evaded
271AAA	Undisclosed income found during search intimation u/s 132	10% of undisclosed income
Book, Audit, loans
271A	Failure to maintain books or documents u/s. 44AA.	Rs. 25,000
271B	Failure to get accounts audited  u/s. 44AB.	0.5% of total sales, or Rs.1,50,000 whichever is less
271D	Taking loan in contravention of Sec. 269SS	Equal to amount of loan  taken
271E	Repayment of loan in contravention of Sec. 269T	Amount of deposit or repaid
271F	Failure to furnish Return of Income	Rs. 5,000
International transactions
271AA	Failure to keep and maintain information and documents u/s. 92D.	2%  of value
271BA	Failure to furnish a report as required u/s. 92E.	Rs. 1,00,000
TDS
271C	Failure to deduct TDS in full and part	Equal to the amount failed to be deducted
271CA	Failure to collect TDS in full and part	Equal to the amount failed to be collected
272BB(1A)	Quoting false TAN in challan/ statements	Rs. 10,000
272BB(1)	Failure to apply for TAN	Rs. 10,000
271H	Failure to furnish e TDS statement	Rs 10,000 to 1 lacks
272A(2) (g)	Failure to furnish TDS certificate	Rs 100 per day .
272A(2)	Failure to comply with department letter	Rs. 100 for every day during which the failure continues.
272AA(1)	Failure to furnish information required u/s. 133B	Rs. 1,000
272B	Failure to apply for Permanent Account Number (PAN)	Rs. 10,000
272BBB	Failure to apply for Tax Collection Account No. (TCN)	Rs. 10,000

e-Payment complete procedure of TDS on Sale of Immovable Property.

What is the procedure for paying the TDS amount into the Bank subsequently, i.e. not immediately after furnishing the purchase transaction details online?
 

Using this facility deductor (Buyer) can furnish the details online and make the payment of taxes subsequently either through net-banking account or by visiting any of the authorized bank branches. Following are the steps to avail this facility:

Step 1

• Log on to NSDL-TIN website (www.tin-nsdl.com).
• Click on the option “Furnish TDS on property”.
• Select Form for Payment of TDS on purchase of Property.

Step 2
After selecting the form you will be directed to the screen for entering certain information.
Example:-

• Permanent Account Number (PAN) of Property Purchaser and Seller.
• Address of the Purchaser, Seller as well as the Property being purchased
• Financial Year during which the Purchase has been made
• Major Head Code – To indicate the type of tax applicable viz; Tax on companies/Tax on other than companies
• Value of Property
• Date of agreement/booking
• Amount Paid/credited (Transaction amount)
• Rate of TDS
• TDS Amount
• Dates of payment/credit, deduction
• Select the option for “Payment of taxes immediately”

It is important to ensure that PAN of Buyer and Seller are correctly mentioned in the form. There is no online mechanism for subsequent rectification. Deductor will have to approach the Assessing Officer or CPC-TDS for rectification of errors.

Step 3

After entering all the above detail, click on PROCEED button. The system will check the validity of PAN. In case PAN is not available in the database of the Income Tax Department then you cannot proceed with the payment of tax.

If PAN is available then TIN system will display the contents you have entered along with the “Name” appearing in the ITD database with respect the PAN entered by you.

Step 4

You can now verify the details entered by you. In case you have made a mistake in data entry, click on “EDIT” to correct the same. If all the detail and name as per ITD is correct, click on “SUBMIT” button. Nine digit alpha numeric ACK no. will be generated and you will be provided with an option to print an Acknowledgment slip.

Please be informed that the name and status of PAN is as per the ITD PAN Master. You are required to verify the name before making payment. In case any discrepancy is observed, please confirm the PAN entered by you. Any change required in the name displayed as per the PAN Master can be updated by filling up the relevant change request forms for PAN. If the name is correct, then click on “Confirm”.

Step 5

With the printout of the Acknowledgment slip, you may visit any of the authorized Bank branches to make the payment of TDS subsequently. The Bank will make the payment through its netbanking facility and provide you the Challan counterfoil as acknowledgment for payment of taxes. Based on the information in the Acknowledgment slip, the bank will make the payment only through net-banking facility by visiting tin-nsdl.com and entering the acknowledgement number duly generated by TIN for the statement already filled by the buyer in respect of that transaction.

In case you desire to make the payment through e-tax payment (netbanking account) subsequently, you may access the link ‘View/Payment of TDS on property” on the TIN website. On entering the details as per the acknowledgment slip, you will be provided an option to submit to the bank wherein you have to select the Bank through which you desire to make the payment. You will be taken to the netbanking login screen wherein you can make the payment online.
 

What do I do if I have misplaced the Acknowledgment slip for payment through the Bank branches?

You may access the access the link ‘View/Payment of TDS on property” on the TIN website. On entering the details as per the acknowledgment slip, you will be provided options to either Print the Acknowledgment Slip.

In case you desire to make an online payment, on the same screen option for Submit to the bank is provided wherein you have to select the Bank for payment. You will be taken to the netbanking login screen wherein you can make the payment online.

File TDS on time or be ready to Pay Penalty Rs. 1 lakh

Failure to deposit timely and correct Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) will now attract a penalty ranging from Rs. 200 to Rs. 1,00,000 by theIncome Tax department.

All the TDS range offices of the department across the country have been asked by the Central Board of Direct Taxes (CBDT) to ensure compliance in this area and also inform and make aware the authorised deductors about this new action being initiated by the tax department.

According to the new instructionsissued, a deductor, either government or private, will have to submit a “compulsory” fine of Rs. 200 for delay in filing either TDS or TCS every day beyond the stipulated date of remittance of these category of taxes.

Similarly, the penalty would be between Rs. 10,000 to Rs. 1,00,000 for furnishing incorrectinformation or failure to file the collection statement within the due date.

“The assessing officer of the department will use sections 234E and 271H of the I-T Act to ensure that TDS or TCS collections are not delayed or faltered. The department, in many cases, has found that deductors delay for long the filing of these category of taxes even after deducting it from the salary of their employees,” a senior official said.

The TDS regime has to be strengthened and hence such measures are important, the official said.

A big chunk of 41 per cent, in the total tax collections in the last fiscal, came from the TDS category alone.
    
During financial year 2012-13, Rs. 2,30,188 crore tax was collected under the TDS category, while the total direct taxes collections stood at Rs. 5,58,970 crore.

The department, during its recent deliberations with top Income Tax and CBDT officials here, has also decided to strengthen its regime for obtaining TDS from salaries of employees in order tocollect more revenue under this category.

Procedure for furnishing TDS through the e-tax payment option immediately after providing the transaction details

E-Payment facilitates payment of taxes online by taxpayers. To avail this facility the taxpayer is required to have a net-banking account with any of the authorized banks. Please follow the steps as under to pay tax online:-

Step 1:

a) Log on to NSDL-TIN website (www.tin-nsdl.com).
b) Click on the option “Furnish TDS on property”.
c) Select Form for Payment of TDS on purchase of Property.

Step 2:

After selecting the form you will be directed to the screen for entering certain information.

Example:-

a) Permanent Account Number (PAN) of Property Purchaser and Seller.
b) Address of the Purchaser, Seller as well as the Property being purchased
c) Financial Year during which the Purchase has been made
d) Major Head Code – To indicate the type of tax applicable viz; Tax on companies/Tax on other than companies
e) Value of Property
f) Date of agreement/booking
g) Amount Paid/credited (Transaction amount)
h) Rate of TDS
i) TDS Amount
j) Dates of payment/credit, deduction
k) Select the option for “Payment of taxes immediately”

It is important to ensure that PAN of Buyer and Seller are correctly mentioned in the form. There is no online mechanism for subsequent rectification. Deductor will have to approach the Assessing Officer or CPC-TDS for rectification of errors.

Step 3:

After entering all the above detail, click on PROCEED button. The system will check the validity of PAN. In case PAN is not available in the database of the Income Tax Department then you cannot proceed with the payment of tax.

If PAN is available then TIN system will display the contents you have entered along with the “Name” appearing in the ITD database with respect the PAN entered by you.

Step 4:

You can now verify the details entered by you. In case you have made a mistake in data entry, click on “EDIT” to correct the same. If all the detail and name as per ITD is correct, click on “SUBMIT” button. Nine digit alpha numeric ACK no. will be generated and you will be directed to the net-banking site provided by you.

Please be informed that the name and status of PAN is as per the ITD PAN Master. You are required to verify the name before making payment. In case any discrepancy is observed, please confirm the PAN entered by you. Any change required in the name displayed as per the PAN Master can be updated by filling up the relevant change request forms for PAN. If the name is correct, then click on “Confirm”

Step 5:

After confirmation an option will be provided for submitting to Bank. On clicking on Submit to Bank deductor will have to login to the net-banking site with the user ID/ password provided by the bank for net-banking purpose and enter payment details at the bank site.

On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.