GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF EXPENDITURE
CENTRAL PENSION ACCOUNTING OFFICE
TRIKOOT-II, BHIKAJI CAMA PLACE,
NEW DELHI -110066

CPAO/IT&Tech/ Misc.Corres/35 (Vol-II) (PF)/10370/ 2023-24/ 109

22.08.2023

OFFICE MEMORANDUM

Attention is invited to this office OM No. CPAO/IT & Tech/ Gallantry Award/26/2020-21/06 dated 12.05.2021 wherein it was stated that all the Pension disbursing banks are required to ensure that Income Tax at source is not be deducted from pension in respect of Gallantry Awardees, as per the Provisions of Section 10 clause 18(i) of the IT Act, CBDT Notification dated 24th November, 2000.

2. It is observed that the banks are not complying with the instructions as this office has been receiving grievances regarding deduction of income tax from pension of Gallantry Awardees.
3. In view of the above, Heads of CPPCs/ GBDs of all Authorized banks are requested to follow the instructions issued by the Income Tax department, on the subject, without fail.

This issues with the approval of the Chief Controller (Pensions).

(Shailesh Bhathagar)
Sr. Accounts Officer (IT Tech)

Source

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CIRCULAR NO : 01/2017

F.No.275/192/2016-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

North Block, New Delhi
Dated the 2nd January, 2017

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2016-17 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.

Reference is invited to Circular No.20/2015 dated 02.12.2015 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 2015-16, 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 2016-17 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, 2016:
As per the Finance Act, 2016, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head “Salaries” for the financial year 2016-17 (i.e. Assessment Year 2017-18) at the following rates:

2.1 Rates of tax

A. Normal Rates of tax:

B. Rates of tax for every individual, 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:

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:

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 of the Income-tax Act, shall, 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, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of fifteen per cent of such income-tax:

Provided that in the case of persons mentioned above having total income 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 one crore rupees by more than the amount of income that exceeds one crore rupees.

2.3.1 Education Cess on Income tax:
The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.
2.3.2 Secondary and Higher Education Cess on Income-tax:
An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the Education Cess on income tax as in 2.3.1.

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Finance Minister Mr.Arun Jaitley recently informed in the Parliament that Section 80E of Income Tax 1961, allows deduction of interest paid in respect of Education Loan availed for completing higher education of self, spouse, children or a student for which the income tax assessee is a guardian, from the income of assessee. This provision therefore provides income tax exemption on the Education Loan Interest for 7 years.

Text of press release issued by Finance Ministry in this regard and extract of Section 80E of Income Tax 1961 are given below

Tax Concession on Interest Paid on Education Loan

Press Information Bureau
Government Of India
Ministry of Finance

05-May, 2015

Section 80E of the Income-tax Act, 1961 provides that in computing the total income of an individual, their shall be allowed a deduction of the amount paid by way of interest on loan taken by him from any financial institution or approved charitable institution for the purpose of pursuing his own higher education or higher education of his spouse, or children, or the student for whom he is the legal guardian. The deduction is available for eight assessment years beginning with the assessment year in which the payment of interest on such loan is first made or until the interest is paid in full, whichever is earlier. This deduction is available to every individual who is liable to income-tax. No specific funds are earmarked for the purposes of extending tax concession against interest paid on education loan.

This was stated by Shri Arun Jaitley, Union Finance Minister in written reply to a question in the Rajya Sabha today.

Extract of Section 80E of Income Tax Act 1961

Under Section 80E of the Act a deduction will be allowed in respect of repayment of interest on loan taken for higher education, subject to the following conditions:

(i)In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan, taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his spouse or children.

(ii) The deduction specified above shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to above is paid in full by the assessee , whichever is earlier. For this purpose –

(a) “approved charitable institution” means an institution established for charitable purposes and approved by the prescribed authority under clause (2C) of section 10, or, an institution referred to in clause (a) of sub-section (2) of Section 80G. Section 80E 35

(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 recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;

(d) “initial assessment year” means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan.

(e) relative”, in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian

Source: PIB

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CIRCULAR NO : 17/2014

F.No. 275/192/2014-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
******

North Block, New Delhi
Dated 10th December, 2014

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2014-15 UNDER SECTION 192 OF THE INCOME TAX ACT, 1961.

*****

Reference is invited to Circular No.08/2013 dated 25.10.2013 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 2013-14, 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 2014-15 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.

INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2014-15

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Income Tax exemption limit raised to Rs.2.5 lakh and also raised to Rs 1.5 lakh under Section 80C

Some relief to individual and salary tax payers, Finance Minister Arun Jaitley presenting Union Budget 2014-15 today in Parliament, raised individual tax exemption limit to Rs.2.5.lakh from current Rs.2 lakh.

For Senior Citizen tax exemption limit also increased to 3 lakh.

The Central Government today hiked the exemption limit for investments by individuals in financial instruments to Rs 1.5 lakh under section 80C.

And one more relief to the depositors of Public Provident Fund, the ceiling limit will raised to Rs.1.5. lakh form current level of Rs.1 lakh.

Source: CGEN.in
[http://centralgovernmentemployeesnews.in/2014/07/income-tax-exemption-limit-raised-rs-2-5-lakh-also-raised-rs-1-5-lakh-section-80c/]

The post Union Budget 2014-15 : Income Tax exemption limit raised to Rs.2.5 lakh and also raised to Rs 1.5 lakh under Section 80C appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

The post Central Government is planning to raise the Income Tax exemption slab to Rs. 5 Lakhs appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

NFIR has made a list of all the proposals that Central Government employees expect in the 2014-15 General Budget.

On the 11th of this month, Mr. Raghavaiah, the General Secretary of NFIR, sent a letter to the Finance Ministry, containing certain proposals that are worth considering.

The letter contains nine points that deserve serious consideration from the Ministry. These points were formulated based on the needs and demands of about 34 lakh Central Government employees, including 14 lakh Railway workers.

Income tax exemption should be raised to Rs. 5 lakhs for individuals and Rs. 7 Lakhs for senior citizens.

The 7th CPC should be instructed to submit an Interim Report on the DA Merger.

Maximum bonus limits should be raised to Rs. 10,000.

The New Pension Scheme must be discarded in accordance to the request by the Railway Ministry.

Additional pension must be granted to pensioners over the age of 70.

The longstanding demand, for exempting Transport Allowance from Income Tax calculations, must be granted.

MACP Scheme should also be extended to teachers and lecturers working in Central Government institutions.

Earned Leave and LAHP should be granted to teachers and lecturers working in Central Government institutions.

All allowances should be exempted from income tax calculations.

Source: http://90paisa.blogspot.in/
[http://90paisa.blogspot.in/2014/06/general-budget-2014-15-nfir-presents.html]

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A letter has been written to the Finance Minister presenting the demand to raise the income tax exemption slab.

Mr. Siva Gopal Mishra, the Secretary of the National Council JCM Staff Side, has sent a letter regarding income tax exemption. In the letter to the Finance Minister Arun Jaitley, it was suggested that the income tax limits be raised to Rs. 5 Lakhs for individuals, Rs. 7 Lakhs for senior citizens, and Rs. 10 Lakhs for super-senior citizens. A request has also been presented to exempt all the allowances from income tax. The letter refers to the recommendations made by the 5th Pay Commission in order to explain its demands.

The letter specially stresses for the exemption of Fixed Medical Allowance granted to pensioners, from the income tax calculations.

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Arun Jaitley, one of BJP’s prominent leaders says that raising income tax slab to Rs 5 lakh will benefit more than thirty million people in the country. He also added that direct tax should be reduced, If the Income Tax limit is raised from Rs. 2 lakh to Rs. 5 lakh, 3 crore people will save Rs. 24 crore which will lead to a small impact of 1 to 1.5 per cent of the National Tax Fund.

All 100% of the Government employees pay taxes without fail, all the time. There is no doubt about it.

Each year, with Government employees losing about a month’s pay as taxes, the suggestion to raise tax slab to Rs. 5 lakh is a welcome move. But, since such ideas are being aired only around election time, they lose credibility.

It has almost become a routine for the Government employees to eagerly hope for a tax slab raise during each annual budget presentation, and be disappointed. There haven’t been any alternative savings options to avoid income tax this time also.

Those who had got employed after 2004 have no options to save and are paying income tax even for comparatively lower incomes.

Will this situation continue?
Only the new Government at the Centre will have the answer to this question.

Source: 90paisa.blogspot.in
[http://90paisa.blogspot.in/2014/04/income-tax-exemption-limit-should-be.html]

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Save Income Tax on the Contribution made by Government in pension fund of NPS Subscriber, Refer 5.5.3 Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD).

5.5.3 Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD):

Section 80CCD(1) allows an employee, being an individual employed by the Central Government or any other employer, on or after the 01.01.2004, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 or as may be notifed by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary(includes Dearness Allowance but excludes all other allowance and perquisites).

As per Section 80CCD(2), where 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

(i) Closure or opting out of the pension scheme or
(ii) 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.e.f 01.04.09 that 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 employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs.1,00,000/- provided under this Section.

Source: AIRF

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