CIRCULAR NO : 20/2015

F.No. 275/192/2015-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
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North Block, New Delhi
Dated the 2nd December, 2015

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2015-16 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.

Reference is invited to Circular No.17/2014 dated 10.12.2014 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 2014-15, 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 2015-16 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, 2015:
2.1 Rates of tax
2.2 Surcharge on Income tax
2.3.1 Education Cess on Income tax
2.3.2 Secondary and Higher Education Cess on Income-tax

3. SECTION 192 OF THE INCOME-TAX ACT, 1961: 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”
3.6.1 Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property [Section 24(b)]
3.7 Adjustment for Excess or Shortfall of Deduction
3.8 Salary Paid in Foreign Currency

4. PERSONS RESPONSIBLE FOR DEDUCTING TAX AND THEIR DUTIES
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
4.4.2.1 Compulsory filing of Statement by PAO, Treasury Officer, etc in case of payment of TDS by Book Entry u/ s 200 (2A)
4.4.2.2 Payment by an Income Tax Challan
4.5 Interest, Penalty& Prosecution for Failure to Deposit Tax Deducted
4.6 Furnishing of Certificate for Tax Deducted (Section 203)
4.6.3. Authentication by Digital Signatures
4.6.4. Furnishing of particulars pertaining to perquisites, etc (Section 192(2C)
4.6.5 DDOs empowered to obtain evidence of proof or particulars of the prescribed claim (including claim for set-off of loss) under the section 192(2D)
4.7 Mandatory Quoting of PAN and TAN
4.8 Compulsory Requirement to furnish PAN by employee (Section 206AA)
4.9.4 Fee for default in furnishing statements (Section 234E)
4.9.5 Rectification of mistake in filing TDS Statement
4.9.6 Penalty for failure in furnishing statements or furnishing incorrect information (section 271H)
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)
5.2.2 Perquisite includes
5.2.2A Rules for valuation of such benefit or amenity
5.3 INCOMES NOT INCLUDED UNDER THE HEAD "SALARIES" (EXEMPTIONS)
5.3.2 Death-cum-retirement gratuity
5.3.3 Any payment in commutation of pension
5.3.7 Any sum received under a Life Insurance Policy (Sec 10(10D)
5.3.8 Any payment from a Provident Fund t
5.4 DEDUCTIONS U/S 16 OF THE ACT FROM THE INCOME FROM SALARIES
5.4.1 Entertainment Allowance [Section 16(ii)]:
5.4.2 Tax on Employment [Section 16(iii)]:
5.5 DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT

6. REBATE OF Rs 2000 FOR INDIVIDUALS HAVING TOTAL INCOME UPTO Rs 5 LAKH [SECTION 87A]

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

8. DDOS TO SATISFY THEMSELVES ABOUT THE GENUINENESS OF CLAIM

9. CALCULATION OF INCOME-TAX TO BE DEDUCTED

10. MISCELLANEOUS:

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