Income Tax Circular No. 04/2020 – Income Tax Deduction from Salaries U/S 192 of IT Act, 1961 – view/download full Circular

Income Tax Circular No. 04/2020 – Income Tax Deduction from Salaries U/S 192 of IT Act, 1961 – view/download full Circular

Income Tax Circular No. 04/2020 – Income Tax Deduction from Salaries U/S 192 of IT Act, 1961 – view/download full Circular

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
CENTRAL BOARD OF DIRECT TAXES

DEDUCTION OF TAX AT SOURCE-
INCOME-TAX DEDUCTION FROM SALARIES
UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961

DURING THE FINANCIAL YEAR 2019-20

 CIRCULAR NO 4/2020

  NEW DELHI, the 16 January, 2020

 Index

Para No.

1.

General

2.

RATES OF INCOME-TAX AS PER FINANCE ACT, 2018

2.1 Rates of tax

2.2 Surcharge of Income tax

2.3.1 Health and Education Cess

3

BROAD SCHEME OF TAX DEDUCTION AT SOURCE FROM SALARIES

 3.1 Method of Tax Calculation

 3.2 Payment of Tax on Perquisites by Employer

 3.2.1 Computation of Average Income Tax

 3.3 Salary From More Than One Employer

 3.4 Relief When Salary Paid in Arrear or Advance

 3.5 Information regarding Income under any Other head

 3.6 Computation of Income under the head ―  “Income from house Property”

 3.7 Adjustment for Excess or Shortfall of Deduction

 3.8 Salary Paid in Foreign Currency

 4.

PERSONS RESPONSIBLE FOR DEDUCTION OF TAX AND THEIR DUTIES

 4.1 Stipulation of section 204 of the Act

 4.2 Tax determined to be deducted from Salary u/s 192

 4.3 Deduction of Tax at Lower Rate

 4.4 Deposit of Tax Deducted

 4.4.1 Due dates for payment of TDS

 4.4.2 Mode of payment of TDS

 4.5 Interest, Fee, Penalty& Prosecution for Failure to Deposit Tax Deducted

 4.6 Furnishing of Certificate for Tax Deducted (Section 203)

 4.7 Mandatory Quoting of Permanent Account Number or Aadhaar number, as the case may be, and TAN

 4.8 Compulsory Requirement to furnish PAN or Aadhaar number, as the case may be, by employee (Section 206 AA)

 4.9 Statement of Deduction of tax under of section 200 (3) [Quarterly Statement of TDS]

 4.10 TDS on Income from Pension

 4.11 Matters pertaining to the TDS made in case of Non Resident

 5

COMPUTATION OF INCOME UNDER THE HEAD ― “SALARIES”

  5.1 Income chargeable under the head ―”Salaries”

 5.2 Definition of – “Salary”, – “perquisite” and – “profit in lieu of salary” (Section 17)

 5.3 Income not included under the Head ―‖Salaries‖ (Exemptions)

 5.4 Deduction u/s 16 of the Act

 5.5 Deductions under Chapter VI-A of the Act

 6.

REBATE OF RS.12500 FOR INDIVIDUAL HAVING TOTAL INCOME UPTO RS. 5 LAKH (SECTON 87A)

7.

TDS ON PAYMENT OF ACCUMULATED BALANCE UNDER RECOGNISED PROVIDENT FUND AND CONTRIBUTION FROM APPROVED SUPERANNUATION FUND

8.

DDOs TO OBTAIN EVIDENCE /PROOF OF CLAIMS

9

CALCULATION OF INCOME-TAX TO BE DEDUCTED

10

MISCELLANEOUS

ANNEXURE 

I.

SOME ILLUTRATIONS

II.

FORM NO 12BA

IIa

FORM NO 12BB

III

REVISED PROCEDURE FOR FURNISHING QTLY E-TDS/TCS STATEMENT BY DEDUCTORS/COLLECTORS

IV

THE PROCEDURE OF FURNISHING FORM 24G

V

PERSON RESPONSIBLE FOR FILING FORM 24G IN CASE OF STATE GOVT DEPARTMENTS/CENTRAL GOVT DEPARTMENTS

VI

PROCEDURE OF PREPARATION OF QUARTERLY STATEMENT OF DEDUCTION OF TAX u/s 200 (3)

VII

DEPTT. OF ECO. AFFAIRS NOTIFICATION DATED 22.12.2013

VIII

BOARD’S NOTIFICATION DATED 24.11.2000

IX

BOARD’S NOTIFICATION DATED

X

FORM 10 BA

income-tax-circular-no-04-2020-income-tax-deduction-from-salaries-u-s-192-of-it-act-1961-view-download-full-circular

CIRCULAR NO. 4/2020

F.No. 275/192/2019-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
******

North Block, New Delhi
Dated the 16 January, 2020

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2019-20 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.

*****

Reference is invited to Circular No. 1/2019 dated 01.01.2019 whereby the rates of deduction of income-tax from the payment of income under the head “Salaries” under Section 192 of the Income- tax Act, 1961(hereinafter ‘the Act’), during the financial year 2018-19, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head “Salaries” during the financial year 2019-20 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in.

2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2019:

As per the Finance (No.2) Act, 2019, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head “Salaries” for the financial year 2019- 20 (i.e. Assessment Year 2020-21) at the following rates:

2.1 Rates of tax

A.  Normal Rates of tax:

Sl No

Total Income

Rate of tax

1

Where the total income does not exceed Rs. 2,50,000/-.

Nil

2

Where the total income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.

5 per cent of the amount by which the total income exceeds Rs. 2,50,000/-

3

Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.

Rs. 12,500/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.

4

Where the total income exceeds Rs. 10,00,000/-.

Rs. 1,12,500/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

B. Rates of tax for every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:

Sl No

Total Income

Rate of tax

1

Where the total income does not exceed Rs. 3,00,000/-

Nil

2

Where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000/- 5 per cent of the amount by which the total income exceeds Rs. 3,00,000/-

3

Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/- Rs. 10,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.

4

Where the total income exceeds Rs. 10,00,000/- Rs. 1,10,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

 C. In case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the financial year:

Sl No Total Income

Rate of tax

1 Where the total income does not exceed Rs. 5,00,000/-

Nil

2 Where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000/- 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-
4 Where the total income exceeds Rs. 10,00,000/- Rs. 1,00,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

 2.2. Surcharge on Income tax:

.The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—

  1. “having a total income” ―(including the income under the provisions of section 111A and section 112A)‖exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax;

  2. “having a total income income” ―(including the income under the provisions of section 111A and section 112A)‖exceeding one crore rupees but not exceeding two crore rupees, at the rate of fifteen per cent. of such income-tax;

  3. “having a total income” ―( excluding the income under the provisions of section 111A and 112 A)‖exceeding two crore rupees but not exceeding five crore rupees, at the rate of twenty-five per of such income-tax; and

  4.  “having a total income” ―( excluding the income under the provisions of section 111A and 112 A)‖exceeding five crore rupees, at the rate of thirty-seven per cent of such income-tax:

  5. having a total income (including income under the provisions of section 111A and 112 A) exceeding two crores rupees,but is not covered under clauses (c) and (d), shall be applicable at the rate of fifteen percent of such income tax:

Provided that in case where total income includes any income chargeable under section 111A and 112 A of the Income Tax Act, the rate of surcharge on the amount of income tax computed in respect of that part of income shall not exceed fifteen percent.

Provided that in the case of persons mentioned above having total income exceeding,—

  1.  fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees;

  2. one crore rupees but does not exceed two crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees;

  3.  two crore rupees but does not exceed five crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of two crore rupees by more than the amount of income that exceeds two crore rupees;

  4. five crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of five crore rupees by more than the amount of income that exceeds five crore rupees.

2.3.1 Health and Education Cess

“Health and Education Cess” shall be levied at the rate of four percent of income tax including surcharge wherever applicable, No marginal relief shall be available in respect of such cess.

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