COMPUTING TDS ON SALARY
Report all eligible exemptions & deductions to your employer to ensure non-deduction of excess TDS from your salary!
Section 192 of the Income-tax Act prescribes for tax deduction at source out of payments representing any income chargeable to tax under the head ‘Salaries’. The provisions for tax deduction at source from Salaries during each Financial Year are explained by the Central Board of Direct Taxes (CBDT) under a special Circular.
TDS under Section 192 is required to be calculated on the basis of the prevalent rates of income-tax on the estimated salary income and is required to be deducted on a proportionate basis at the time of each payment. For the said purpose the employer is required to consider various exemptions and deductions as prescribed under the Circular while computing the actual amount of income-tax to be deducted. (more…)
MERE DECLARATION CAN ENTITLE EXEMPTION!
SC holds that for TDS purposes Employer can grant exemption to Employee without supporting evidence
Section 10 of the Income-tax Act grants tax exemption in the case of salaried employees, in respect of various allowances such as leave travel concession (LTC) under Section 10(5), conveyance allowance under Section 10(14) and the like, within the scope of prescribed conditions and monetary limits. Similarly, Section 17(2) provides that reimbursement of medical expenses within prescribed limits shall also enjoy tax exemption in the hands of employees.
In the above regard, one of the moot questions that has always been a matter of debate is whether an employer, for purposes of tax deduction at source (TDS), can grant exemption to such an allowance or reimbursement claimed exempt by the employee, on the basis of a declaration made by him in the matter or whether the employer is required under law to collect and examine supporting evidence in this regard before entertaining the employee’s claim. (more…)
TAX HOLIDAY FOR LEAVE TRAVEL CONCESSION
Get LTC from your Employer and Enjoy Family Vacation with Tax Exemption
One of the important tax free perquisites available to salaried employees is ‘Leave Travel Concession’ (LTC) or ‘Leave Travel Assistance’ (LTA) which is treated as exempt under Section 10(5) of the Income-tax Act read with Rule 2B of the Income-tax Rules.
HOW TO PLAN ZERO TAX ON ANNUAL PAY OF RS.4.50 LAKHS?
Minimize Tax on even Higher Incomes
Through Intelligent Pay Packet Planning!
Are you aware that as a salaried taxpayer you can conveniently structure your annual pay package of up to Rs.4,50,000 on a Zero Tax Basis? (more…)
IS YOUR PAY PACKAGE REALLY TAX FRIENDLY?
IS YOUR PAY PACKAGE
REALLY TAX FRIENDLY?
Enjoy Zero Tax on Rs.4.20 lakhs to just 7.77% on Rs.13.5 lakhs
By Smart Planning of your Annual Pay Package & Deductions!
The Income-tax Act provides for a number of allowances and perquisites which have been notified as tax free and every salaried taxpayer must endeavour to negotiate his pay package in a manner that the same can include such tax free allowances and perquisites. This would ensure that he is able to take maximum take-home pay per month with the minimum deduction of tax.
TAX FREE RETIREMENT BENEFITS!
Retirement Benefits that can be claimed as fully tax exempt:
- Gratuity upto Rs.10,00,000
- Leave Encashment upto Rs.3,00,000
- VRS Compensation upto Rs.5,00,000
- Entire PF Balance, without any ceiling (more…)
TAX FREE DIWALI GIFT FOR YOUR EMPLOYEES!
Gift Below Rs.5,000 on any Ceremonial Occasion
Treated as a Tax Free Perk for the Salaried
EMPLOYEE OR CONSULTANT? MAKE YOUR SMART CHOICE!
Opting to be a Consultant gives the Privilege of claiming
Many Deductions not available from Employee Remuneration!
Anand Roy is offered a marketing work assignment by a company with an annual package of Rs.8,80,000 during FY 2010-11 and he is given the choice to either join the company as an employee or offer his services as a consultant. Weighing the income-tax implications in respect of the same, he is wondering what should be his best choice.
If Anand decides to accept the status of an employee, he needs to be aware of the fact that he would have a comparatively limited choice of exemptions that he can claim from his taxable salary income of Rs.8,80,000. These could possibly be structured in the form of Transport Allowance of Rs.9,600, Children’s Education Allowance of Rs.2,400, Reimbursement of Medical Expenses of Rs.15,000, Attire Allowance of Rs.18,000 and Food Coupons for a value of Rs.15,000, in all amounting to Rs.60,000. This would still leave his taxable salary at Rs.8,20,000 and even after deducting Rs.1,20,000 as the eligible deduction under Section 80C and 80CCF, income-tax of Rs.76,220 would be deducted at source by his employer on his Total Income of Rs.7,00,000.
However, if Anand goes for the choice of becoming a consultant to the company and accepts the consideration of Rs.8,80,000 as professional fees, he would enjoy distinct tax advantages as explained hereinafter.
Perks & Jerks for Employees!
Perquisite Rules Mere ‘Old Wine In New Bottle’
Salaried Get No Relief From Anomalies & Inequities
With virtually no reprieve from the tax burden on their pay packages and continuing anomalies and inequities, the new rules for valuation of perquisites announced by the Central Board of Direct Taxes (CBDT) on December 18, 2008 have hugely disappointed millions of salaried employees. (more…)
Perk up your Employee’s Diwali with a Tax-free Gift!
Gift Below Rs.5,000 On Ceremonial Occasion
Treated As Tax Free Perk Under I.T. Rules
“If you give what can be taken, you are not really giving,” quoted the noted Sufi author Idries. Trying to think of giving something to your employees during the coming festive season, out of which even the Taxman cannot take anything? Here is a smart idea!
