The end of FY 2016-17 is fast approaching and the Income Tax (IT) on salaries shall be calculated accordingly before end of March 2017 and remitted before the due date. Any excess or shortfall in taxes deducted can be adjusted during the financial year 2016-17, that is before 31.3.2017.
The Income Tax is deductible annually for each financial year commencing from 1st of April and ending on the 31st March. Income Tax Department has fixed the responsibility on the employer to deduct income tax from the salary of employees monthly on proportionate basis and deposit before the due date as prescribed and report same to Income Tax Department (quarterly as well as annually).
DDOs/Employers have been authorised to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purpose of estimating the income of the employee or computing the amount of tax deductible.
DDOs/Employers shall obtain from the employee evidence or proof of savings or investments made during the FY 2016-17 in FORM 12BB prescribed by the Income Tax Department, before allowing such deductions/exemption. The responsibility of collecting the proper evidences lies on the employer/DDO.
TDS on Income from Pension
In the case of pensioners who are paid pension (not being family pension paid to a spouse) from a Nationalised Bank, shall apply conditions in the same manner as they apply to salary-income of the staff.
The deductions from the amount of pension on account of contribution to Life Insurance, Provident Fund, NSC etc., shall be allowed by the Bank, if the pensioner furnishes the relevant details to the banks in prescribed FORM 12BB.
Necessary instructions in this regard were issued by the Reserve Bank of India. These instructions should be followed by all the branches of the Banks, which have been entrusted with the task of payment of pensions.
Further all branches of the banks are bound to issue certificate of tax deducted in Form 16 to the pensioners also.
NO tax shall be deducted on family pension paid to a widow or widower, which is an Income from other sources but not as pension in the hands of the recipient.
Rebate of Income Tax Rs.5000: Tax Rebate of Rs.5000 U/s 87A is available to Resident Individuals for AY 2017-18, that is, Financial Year 2016-17, whose income, after all deductions, does not exceed Five Lakh rupees in Financial Year 2016-17. Further, the rebate is available on certain conditions unless specifically withdrawn.
- a) Section 87A is also applicable from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2017-18.
- b) Rebate is available only to Resident individuals and not available to Non Residents.
- c) Rebate available to both Male and Female assessees.
- d) If the total tax payable is less than Rs. 5000, rebate is restricted to “total tax payable”.
- e) Rebate is allowed before levy of Education Cess, SHE Cess & Surcharge.
- f) Rebate benefit is available to all categories of Individuals but not to super senior citizen, aged above 80years, since they are already fully exempted up to Rs. 5 lakh.
DDOs/Employers to satisfy themselves about the genuineness of claim in FORM 12BB.
The Drawing and Disbursing Officers or the Employer should satisfy themselves about the actual deposits/ subscriptions / payments made by the employees, by calling for such particulars/ information as they before allowing the deductions. In case they are not satisfied about the genuineness of the employee’s claim regarding any deposit/ subscription/payment made, they should not allow the same. The employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer.
The due date for filing the Quarter 4 TDS statement in FORM 24Q is 31.5.2017
Wherever there is any doubt, reference may be made to the provisions of the Income Tax Act, 1961, the Income Tax Rules, 1962, relevant Finance Act and/or circulars and/or notifications,
—N.D.Shreenivaas, Bhavani Associates
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