ANDHRA PRAGATHI GRAMEENA BANK

HEAD OFFICE::KADAPA

Circular No.271- 2008-BC-STF Date: 26.12.2008

INCOME TAX – DEDUCTION OF TAX AT SOURCE ON SALARIES –

FINANCIAL YEAR 2008-09 REF.NO. 1) Cir.No.28-2006-BC-STF, dt.14.07.06

2) Cir.No.41-2006-BC-STF, dt.31.07.06 3) Cir.No.90-2006-BC-STF, dt.29.09.06 4) Cir.No.35-2007-BC-STF, dt.02.03.07

5) Cir No.07-2008-BC-STF, dt.10.01.08

All Branches/Offices are aware that the Bank had issued detailed guidelines on various

provisions of Income Tax Act 1961 vide Circulars cited basing on the information available with the Bank at that time.

The further changes made vide Finance Act 2008 and some important provisions of Income Tax Act 1961 are given below for implementation by Branches/Offices of the Bank.

1. Basic Exemption limit& Tax Slabs:

Basic exemption limit is enhanced to Rs.1,50,000/- for Individuals. Further, for women employees, basic exemption limit is Rs.1,80,000/- and for Senior Citizens of 65 years and above it is Rs.2,25,000/-.

Total Taxable Income Range

Rates of Income-tax

Upto Rs.1,50,000/- .. .. ..

.. .. .. .. Nil

Rs.1,50,001/-to

Rs.3,00,000/- ..

@ 10% of the amount by which the total income exceeds

Rs.1,50,000/-. And Rs,1,80,000/- for women

Rs.3,00,001/-to

Rs.5,00,000/- ...

Rs.15000/- + 20% of the amount by which total income

exceeds Rs.3,00,000/- (Rs 12,000/- + 20% for women)

Above Rs.5,00,000/- … Rs.55,000/- + 30% of the amount by which total income

exceeds Rs.5,00,000/- (Rs 52,000/- + 30% for women)

2. SURCHARGE @ 10% is applicable where taxable income exceeds Rs.10.00 lakh in

case of individuals, HUF, Association of Persons and Body of Individuals. Contd…….2

2

3. EDUCATION CESS is to be levied @ 3% (2% Education Cess + 1% Secondary & Higher Education Cess) on Net Tax liability i.e. Income Tax + Surcharge.

4. Professional Tax paid, if any, during the financial year is fully deductible u/s 16(iii).

Valuation of perquisites for TDS purposes: Rule 3 of the Income Tax Rules 1962 prescribes a method of valuation of perquisites

provided by the employer directly or indirectly to the employee or to any member of his house hold by reason of his employment in respect of the following.

a) Rent free/lease, furnished /unfurnished accommodation b) Services of a sweeper, a gardener, a watch man or a personal attendant c) Supply of Gas, Electric Energy or water for house hold consumption

d) Free or concessional educational facilities to the members of household e) Free Meals f) Interest free or concessional loans g) Gifts by employer

h) Expenditure incurred on Credit Card i) Expenditure incurred in a Club j) Transfer of movable assets to the employees

Note: For our employees only perquisites of nature specified above under (f) will arise.

5. Perquisites on Accommodation: A) Where the accommodation is owned by the Bank:

i) 15% of the salary in Cities having population exceeding 25 lacs as per 2001 census. ii) 10% of the salary in Cities having population exceeding 10 lacs but not exceeding 25

lakhs as per 2001 census iii) 7.5% of the salary in other areas

DTQ if any received is to be reduced

B) Where the accommodation is taken on lease or rent by the Bank:

The value of perquisite is calculated as follows: i) actual amount of lease rental paid or payable by the Bank

ii) 15% of salary, in respect of the period during which the said accommodation was occupied.

Least of the above is the prerequisite value which is to be reduced by the DTQ and excess rent paid if any beyond eligible amount by Officers. C) Where furniture is provided by the Bank or furniture is availed under the furniture scheme framed by the Bank, the value of perquisite as arrived above is to be increased by 10% p.a. of the Original Cost of the Furniture provided, less recovery made.

3

D) Where an Officer employee is claiming HRA and furniture is provided by the Bank, perquisite is to be valued at 10% of the original cost of such furniture less recovery made

thereon.

However, Branches/Offices are advised not to value perquisites on accommodation (excluding furniture provided if any) for the Financial year 2008-09 also , in view of the continuation of interim relief /stay granted by Hon’ble Mumbai High Court in the Writ Petition filed by SBOA . However, it is made clear that if the interim relief /stay is vacated by the court and a demand is raised for non deduction of tax at source

within interest/penalty, if any , such sum shall have to be recovered from the employees on its payment. This fact shall be brought to the notice of all concerned employees.

6. Perquisites in respect of use of Motor Car – not applicable w.e.f.01.04.05

7. Perquisites on Interest Free or Concessional Loans:

Perquisites in respect of interest free or concessional loans is to be valued taking into account the interest rate charged by State Bank of India for the general public for the same purposes as on 1 st April of the relevant financial year. Accordingly, perquisites in respect of loans and advances (including Festival Advance) extended to employees shall

be computed in the following manner for the F.Y 2008-09 also: Type of loan/Advance Rate of interest

charged by the

Bank

Product of Monthly

closing balance

Interest charged to

the employee by the Bank

Interest rate

charged by SBI for general public

Interest as per SBI rate (Col.

3xCol.5)

Value of Perquisite

(6-4)

1 2 3 4 5 6 7

1. Housing Loans: a) Old scheme irrespective

of amount b) New scheme upto

Rs.1.10 lakhs Above Rs.1.10 lakhs

c) Addl. Housing loan old

scheme

d) Housing Loans on par with public: Upto 5 Years of

repayment: Above 5 years & upto 10 years years Above 10 years

8.5%

5% 11% 11.5%

11% 12%

13%

10% up to

5 years 10.25% above 5

years but

up to 15 years

10.50% above 15 years

2. Vehicle Loan a) Four wheeler:

Upto Rs.80000/- Above Rs.80000/-

b) Two wheeler upto

Rs.15000/- Above Rs.15000/-

8.5% 12%

7.5% 12%

12.00%

15.50%

3. OSL (CD)

DL (New) Computer Loans OD (AS)

11.5%

11.5% 10% 11.5%

15.50%

4. Festival Advance Nil 11.75%

TOTAL --- ---

4

Perquisites will not arise under 7 where the aggregate amount of original loans including Festival Advance do not exceed Rs.20,000/- during the year or such

loans are extended for medical treatment in respect of diseases specified in Rule 3A of Income Tax Rules

Value of perquisite if arrived at “negative” in respect of any type of loan can be set off with perquisite on other type of loans. However, if the net value of perquisites on interest free/ concessional loans is negative, the same has to be ignored. This amount

can not be set off against perquisites on accommodation/ furniture etc. However, in view of stay granted by Madhya Pradesh High Court, Jabalpur

bench in writ petitions filed by AIBOC, AIBOA, SBEU, Branches/Offices are advised to value the perquisites on concessional loans extended to Officers of our Bank who are the members of Andhra Pragathi Grameena Bank

Officers Association (affliated to AIBOC) taking into account the cost to the employer instead of SBI rates as mentioned under para no.7. Cost to the employer for the Financial year 2008-09 is 8.46%. However, the above stay is not applicable to Officers/Employees who are not the members of

Associations/Unions in the Bank affiliated to AIBOC and perquisite is to be calculated taking into account SBI rates.

8. Perquisites on reimbursement of Medical Expenses by the Bank : (A) Reimbursement made by Bank to the employee for medical treatment of self or

family (including annual medical aid paid on declaration basis) is exempt upto Rs.15,000/- in aggregate during the year. Reimbursements beyond Rs.15,000/- is to be treated as perquisites except in respect of specified diseases as discussed below:

(B) Additional Medical expenditure reimbursement will not be treated as perquisites provided-

i) the expenses have been incurred in any hospital (including dispensary/ clinic/ nursing home) maintained by Government or any local authority or any other hospital approved

by Government for the purpose of medical treatment of its employees. Copy of Income Tax Approval Certificate issued by the Chief Commissioner of Income Tax to such Hospitals where treatment is taken is to be produced by the employees.

OR ii) the expenses incurred for treatment of prescribed diseases or ailments (refer Annexure-C of Circular No. 28-2006-BC-STF dated 14.07.2006), in any hospital

(including dispensary/clinic/ nursing home) approved by the Chief Commissioner of Income Tax. The employee shall attach a certificate from the hospital specifying the disease or ailment and copy of Approval Certificate issued by the Chief Commissioner of

Income Tax to such hospital. 9. Taxable portion of LFC and LFC encashment is to be treated as Perquisites.

10. Reimbursement of education fees upto Rs.100/- p.m. per child is exempt u/s10((14)(ii).

5

11 Honorarium received from STCs is taxable as Salary Income. Lump sum allowances such as Closing Allowance, Rotational Transfer Allowance are also taxable.

12 A statement showing correct and complete particulars of the perquisites and the value thereof is to be given to employees:-

(a) at relevant columns provided in Form No.16 if the amount of salary paid or payable to the employee is less than Rs.1,50,000/- or

(b) in Form No.12BA, as Annexure to Form No.16, if the amount of salary paid or payable to the employee is more than Rs.1,50,000/- (specimen given in circular No. 28-

2006-BC-STF dated 14.07.2006). 13. INCOME EXEMPT U/S 10:

The following payments made to employees by debiting establishment charges are exempt u/s 10 to the extent as detailed.

i) Leave Fare Concession u/s 10(5) :

(A) Encashment of LFC upto 75% of the eligible amount is fully taxable since

exemption is available only where journey is actually performed.

(B) Exemption is available in respect of two journeys performed in a block of four calendar years i.e., 1986-89, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-09. If the

employee has not availed LFC, during any of the specified four years block, exemption can be claimed in the next block on availing LFC in the calendar year immediately following that block. This is known as “Carry Over Concession”. This carry over

exemption is in addition to the eligible exemption allowable in respect of 2 journeys in the said Block. The quantum of exemption is restricted to the following:

Where journeys performed by Air Economy air fare of National Carrier (Indian Airlines or Air India) by shortest route to the place of destination or the

amount spent, whichever is less.

Where journey is performed by rail Air conditioned first class rail fare by the

shortest route to the place of destination or amount spent/reimbursed, whichever is less.

Where the place of origin of journey and destination are connected by Rail, and journey is performed by

any mode of transport other than by air.

Air conditioned first class rail fare by the shortest route to the place of destination or amount spent/reimbursed whichever is

less.

Where the places of origin of journey and destination (or part thereof) are not connected by rail

(i) Where a recognised public transport system exists.

First class or deluxe class fare of such transport by the shortest route or the amount spent, whichever is less.

Air conditioned first class rail fare for the distance of journey by shortest route (as if

6

(ii) Where no recognised public transport system exists.

the journey had been performed by rail) or the amount actually spent/reimbursed,

whichever is less.

ii) Gratuity u/s 10(10):

The amount of gratuity paid to the employee on his/her retirement, VRS, termination, resignation or any gratuity paid to spouse, children or dependents on his/her death is exempt upto a prescribed limit as given below:

A) Gratuity paid as per Andhra Pragathi Grameena Bank Officers and Employees Service Regulations 2006 is exempt up to Rs.350000/- which is to be calculated as under:

Amount arrived at being one half months' salary for each year of completed service (calculated on the basis of average salary for the ten months immediately preceding the month in which such an event occurs), subject to a limit of Rs.3.50 lakh (salary means Basic Pay + DA + Other Allowances ranking for EPF).

i.e. total of preceding 10months Basic Pay + D.A + Other allowances ranking for EPF

10 x 1/2 x no. of completed years of service subject to a maximum of Rs.350000/-

If an employee retires on 31st December, Average Salary is to be calculated by taking

salary (B.P + D.A + Other allowances ranking for EPF) from February to November. (B) Gratuity paid as per Gratuity Act is fully exempt subject to a maximum of

Rs.350000/-. iii) Commutation of Pension u/s 10(10A): Payment towards commutation of 1/3 rd portion of pension is fully exempt.

iv) Leave Encashment on Retirement u/s 10(10AA): Leave encashment at the time of retirement is exempt subject to a ceiling of 10 months' leave, calculated on the

basis of Average Salary (BP + D.A + Other Allowances ranking for EPF) drawn during the ten months preceeding the month of retirement and subject to a limit of Rs.3,00,000/- (At present our employees are eligible to encash upto a maximum of 240

days leave on retirement, etc.). Taxable leave encashment is calculated as follows:

i.e. total of preceding 10months Basic Pay + D.A +

Other allowances ranking for EPF 10 x 1/30 x no. of days of leave encashment

subject to a maximum of Rs.300000/-

NOTE:HRA and portion of Other Allowances not ranking for EPF included in leave encashment on retirement is taxable. Leave encashment paid to legal heirs of the deceased employee is not taxable (CBDT Cir.No.309 dated 3.7.1981). However, leave

encashment on LFC is fully taxable.

7

14. House Rent Allowance u/s 10(13A): H.R.A. received is exempt upto a sum being the least of the following:

Mumbai/Delhi/Kolkata/Chennai 1. HRA actually received

2. Rent paid in excess of 10% of salary 3. 50% of the salary

Other Cities 1. HRA actually received

2. Rent paid in excess of 10% of salary

3. 40% of salary

Notes:

a. Salary means Basic Pay + D.A. + Other allowances ranking for EPF b. HRA is not exempt if the employee is not actually paying rent.

c. HRA is not exempt if the employee resides in his/her own house d. Where HRA is less than Rs.3000/- p.m. and Employee resides in a rented house,

Rent receipts need not be insisted upon as proof of payment in general.

e. Where an employee owns a house in the same city/town and claims HRA exemption stating that he/she is residing in a rented house, rent receipt shall be insisted upon irrespective of the amount of HRA.

15. Allowances exempt u/s 10(14):

(A) Any Transport allowance granted to an employee to meet expenditure for the

purpose of commuting between place of residence and place of duty is exempt subject to a maximum of Rs.800/-p.m.

(B) Any allowance including halting allowances reimbursed to meet cost of travel on tour or on transfer. This includes packing and transportation charges on transfer also.

(C) Any allowance granted for encouraging the academic, research and other professional pursuits.

(D) Any allowance granted to meet the expenditure incurred on the purchase or maintenance of uniform worn during the performance of duties of an office. 16. DEDUCTIONS FROM GROSS TOTAL INCOME UNDER CHAPTER VI-A

i) Section 80C– Deduction in respect of EPF contribution, Life Insurance Premia, etc.

The investments eligible for deduction u/s 80C include:

(A) Premium on insurance paid on the life of self, spouse and children.

(B) Sum paid to keep in force a deferred annuity on the life of self, spouse and children.

(C) Contribution to Provident Fund including additional contribution if any.

(D) Subscription to National Savings Certificate by self. Accrued interest on NSCs also

qualify for deduction.

8

(E) Contributions to Public Provident Fund (PPF) for self, spouse and children.

(F) Contribution to Unit Linked Insurance Plan such as ULIP 1971, ULIP of LIC Mutual

Fund etc. notified u/s 10(23D) for self, spouse and any child.

(G) Contribution to Annuity Plan of LIC or any other insurer as notified by Central Govt.

(H) Subscription to Units of any Mutual Fund notified u/s 10(23D) by the Central Govt.

(I) Specified Term Deposit in any Scheduled Bank with maturity period of not less than 5 years within an overall ceiling of Rs.1.00 lakh.

(J) Contribution by an individual to any Pension Fund set up by any Mutual Fund notified u/s 10(23D) by the Central Govt. or National Housing Bank notified in this regard by Central Govt.

(K) Tuition fees (excluding development fees/ donation or payments of similar nature)

paid whether at the time of admission or thereafter –

i) to any University/ College/ School or Educational Institution situated within India.

ii) for the purpose of full time education of any two children upto an overall ceiling of

Rs.1.00 lakh.

(L) i) Repayment to Housing Loan (towards principal) to any Bank including Co-op. Bank, LIC, NHB, Housing Finance Companies, Co-op. Society of which he/she is a shareholder or member, Public Limited Company engaged in the business of

providing long term finance for construction/ purchase of houses etc. upto the overall ceiling of Rs.1.00 lakh.

ii) Stamp duty, registration fee and other expenses incurred for the purpose of transfer of house property is also eligible for deduction within the overall limit.

iii) However, repayment to loan availed for any addition, alteration, renovation, repair of the house property carried out after the issue of Completion Certificate or after the occupation of the house property by self or by tenant, payment towards admission

fee/cost of share, initial deposit to Society/ Company, will not qualify for deduction u/s 80C. (M) Subscription to equity shares or debentures (Infrastructure Bonds) forming part of

eligible issue of capital, approved by CBDT, issued by any Public Limited Company/ Public Financial Institution and entire proceeds of the issue are wholly utilized for carrying out any business exclusively specified u/s 80-1A(4).

(N) Amount deposited in Five year Time Deposit Scheme in Post Office.

ii) Section 80CCC - Deduction in respect of contribution to certain Pension Funds upto Rs.1,00,000/- (within the overall limit of Rs.1.00 lakh including u/s 80C):

Amount paid to effect or keep in force a contract for any annuity plan of LIC or any other Insurer (approved by IRDA), for receiving pension from such fund whose income

is exempt u/s 10(23AAB), shall be allowed as deduction. The amount paid or deposited

9

(excluding Interest or bonus accrued or credited to the account of assessee if any) or Rs.1,00,000/- p.a. whichever is less, is allowed as deduction.. Amount received on

surrender of the annuity plan or pension received from the annuity plan is taxable as Income during the Year of such withdrawal or receipt.

iii) Section 80 CCE – prescribing limit on deduction u/s 80C & 80 CCC:

The aggregate amount of deduction u/s 80C and 80 CCC shall be restricted to Rs.1.00 lakh only.

17. Section 80D – Deduction in respect of Medical Insurance Premia.

Amount paid by cheque to keep in force an insurance on the health of individual or

spouse or dependent children shall be allowed as a deduction up to Rs.15,000/- p.a..An additional deduction of Rs.15000/- is allowable from financial year 2008-09 on medical insurance premium paid towards insurance on the health of the parents also.

Where the parents are of age 65 years and above this additional deduction is eligible up to Rs.20,000/-. The insurance shall be in accordance with approved by IRDA. The scheme is popularly known as "Mediclaim" Insurance Policy.

Note: "Senior Citizen" is a resident individual who attains the age of 65 years at any time during the relevant Financial Year.

18. Section 80 DD- Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability:

Deduction up to Rs.50000/- is eligible for :

a. Any expenditure incurred on medical treatment (including nursing training and

rehabilitation of a dependent, being a person with disability or

b. Paid or deposited any amount under a scheme framed by LIC or any other

insurer or UTI and approved by the CBDT for maintenance of a dependent being a person with disability. In the case of dependent person with sever disability, the eligible deduction is Rs.75,000/- .

The following conditions are to be satisfied to be eligible for deduction:

i) Such scheme as referred in (B) above, provides for payment of annuity or lumpsum amount for the benefit of a dependent, being a person with disability in the event of death of individual in whose name the subscription to the scheme is made.

ii) If assessee/individual nominates either the dependent being a person with disability or any other person or any other person or a Trust to receive the payment on his behalf, for the benefit of such dependent, being a person with disability.

iii) If the dependent, being a person with disability predeceases the individual (assessment) the amount received by the individual is chargeable to tax to the extent of an amount equal to the amount paid or deposited under the scheme

referred (B) above. iv) The minimum degree of disability should be 40 % in order to be eligible for

concessional benefit. A person who is with 80 % or more of disabilities is a person with severe disability.

10

v) Only one deduction either u/s 80DD or 80 U can be claimed by both by the individuals as well as by dependent.

vi) “Dependent” means spouse, children, parents, brothers and sisters who for support and maintainance wholly or mainly depend on such individual and such dependent has not claimed any deduction u/s 80 U.

The employee claiming this deduction shall have to furnish a copy of the Certificate issued by the Medical Authority in the prescribed form and manner along with the

Return of Income u/s 139 for the relevant year to the Income Tax Authorities. Where the condition of disability requires reassessment of its extent after a period stipulated in the Certificate, no deduction is to be allowed unless a new certificate is obtained and

produced .

It is to be noted that deduction u/s80 DD is available to employees for

disability of dependent. 19. Section 80 DDB – Deduction in respect of Medical Treatment etc.

Where the employee has actually incurred any expenditure during the financial year on the medical treatment for self or for his/her dependent i.e. spouse, Children, parents, brothers and sisters, for such disease or ailments Dementia, Dystonia Musculorum

Deformans, Motor Neuron Disease, Ataxia, Chorea, Hemiballisums, Aphasia, Parkisons Disease, Malignant Cancers, Full Blown Acquired Immuno Deficiency Syndrome (AIDS) Chronic Renal Failure, Haematological disorders ( Hemophilia, TTThalassaemmmia)

shall be allowed a deduction of Rs.40000/- per annum. In cases where expenditure incurred is for a senior citizen the amount of deduction allowed is Rs.60,000/- p.a.. It is to be noted that the deduction u/s 80 DDB is to be allowed on the amount of

expenditure actually paid by the employee over and above the reimbursement received from the Bank, Insurance company etc. The deduction shall be allowed if the employee furnishes a certificate from the prescribed medical authority . It is necessary to obtain

medical prescription, proof of expenditure and declaration by the employees. 20. Section 80 E- Deduction in respect of Interest on Loans taken for Higher

Education of self, Spouse and Children.

Any amount paid out of income chargeable to tax towards interest on loan taken from any Financial Institution or any approved charitable institution for the purpose of

pursuing higher education of self, spouse and children is eligible for a deduction u/s 80E This deduction shall be claimed in maximum of 8 financial years on actual repayment basis and without any upper limit.

Financial Institution means a banking company to which the Banking Regulation Act 1949 applies (including any bank or banking institution referred to section 51 of that

Act) or any other Financial institution by notification in the official Gazette specifically. Approved Charitable Institution means an Institution notified by Central Bank u/s 10(23C) or u/s 80G(2)(a).

Higher education means full time studies for any graduate or post graduate course in engineering, medicine, management or the postgraduate course in applied sciences or

pure sciences including Mathematics or Statistics.

11

21. Section 80 G – Deduction in respect of Donations to certain eligible Funds,

Charitable institutions Donations made to Prime Minister‟s national Relief Fund, Chief Minister‟s Relief Fund etc.

are eligible for deduction @ 100 % (wherever specified as such). In other cases, 50 % of donation paid is eligible as deduction where exemption certificate is produced/referred in the Donation receipt.

Donations made to PM Relief Fund/CM Relief Fund eligible for 100 % deduction is to be allowed at the Branch/Office level. Employees shall have to claim the deduction for

donations which qualify for deduction @ 50 % by filing the Return of Income. 22. Withdrawal of Deduction u/s 80 L in respect of Interest on certain

Securities, Deposits:- Deduction u/s 80 L is withdrawn w.e.f. 01.04.2005. Hence all types of Interest Income including Interest on FDs, Cash Certificates, CDs, SB A/c, Accrued interest on NSCs

become fully taxable . Dividend income is fully exempt since companies are subject to Dividend Distribution Tax on dividend payments.

23. Section 80 U – Deduction in case of Person with Disability or self Under section 80 U, a deduction of Rs.50,000/- per annum is available to an employee

who is certified by the Medical Authority to be a person with disability. Where an employee is a person with severe disability the deduction available is Rs.75,000/- per annum. It is also specified that every individual i.e. employee claiming a deduction of

Rs.50,000/- or Rs.75,000/- under this section shall furnish a copy of the Certificate issued by the Medical Authority in the form and manner as may be prescribed along with Return of Income to the Income Tax Authorities in respect of Asessment year for which

deduction is claimed. Employees claiming deduction u/s 80 U shall have to furnish the copy of such certificate tot eh Branch/Office also.

It is to be noted that deduction u/s 80 U is available to the employees themselves who suffer from disability for the following diseases.

Disability means Blindness, low vision, leprosy – cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, celebral palsy, multiple disability.

24. Accrued Interest on NSCs : Accrued Interest on NSCs (VIII Issue) eligible for deduction U/S 80 C shall be calculated

as under for the Financial Year 2008-09.

Financial Year of Purchase

Accrued Int for NSCs of Rs.1000/-

2003 - 2004 119.80

2004 – 2005 103.30

2005 – 2006 95.50

2006 - 2007 88.30

2007 - 2008 81.60

12

Please note that interest accrued on NSC s is to be offered to tax under Income from

other sources. 25. Illustration on computation of Tax Liability:

Mr „A‟ Mrs. ‟B‟

(Women) Mr „C‟

Gross salary 2,40,000 3,00,000 4,00,000

Perquisites on accommodation/furniture 15,000 - 36,000

Perquisites on concessional loans 1,000 2,400

Leave encashment on LFC 15,000 37,000

Loss from House property (-)12,000

Income from other sources(Int. on NSC) 3,500 15000

Gross total income 2,62,500 3,54,400 4,36,000

Less Profession Tax 2,400 2,400 2,400

Total Income-A 2,60,100 3,52,000 4,33,600

Less Deductions 80 C Investments

EPF 9,360 30,000 55,000

HL repayment 24,000 ---

Infrastructure Bonds --- 15,000

Tuition fees 14,000 15,000

Accrued interest on NSC 3,500 15,000

PPF ---- 20,000 30,000

NSC 15,000 10,000

Tax Saver Deposit 10,000 --- 25,000

Total Investments u/s 80 C 75,860 1,05,000 1,10,000

Eligible deductions u/s 80 C 75,860 *1,00,000 *1,00,000

Jeevan Suraksha 80 CCC --- ---- 10,000

Total DEDUCTIONS u/s 80 CCE 75,860 *1,00,000 *1,00,000

Mediclaim u/s 80 D --- ***25,000 15,000

Medical treatment u/s 80 DDB ---- 40,000

Interest paid on Education loan u/s80E 15,000 ----

Total Deduction-B 75,860 1,40,000 1,55,000

Taxable income(A-B) 1,84,240 2,12,000 2,78,600

Tax thereon 3,424 **3,200 12,860

Education cess (@ 3%) 103 96 386

Total Tax 3,527 3,296 13,246 Note:

1. *Maximum deduction under section 80 CCE is restricted to Rs.1.00 lakh for investments under section 80 C u/s 80 CCC.

2. **Basic exemption for women is Rs.1.80 lakhs 3. Accrued interest on NSC is taxable since 80 L is withdrawn 4. ***Medical insurance Rs.5000/ for self - and on parents (Senior Citizens)

Rs.20,000

13

26. RELIEF ON ARREARS OF SALARY U/S 89 (1):

Where an employee is required to pay tax at higher rate on account 0f receipt of arrears of salary, he/she will be entitled to tax relief under Section 89 (51) on an application made by him/her in form no.10 E to the employer (refer Annexure- 2).

Relief under section 89 read with rule 21 A(1)(a) is to be computed in the following manner.

1. Find out the tax on total income of the previous year in which salary is received

in arrears ( hereafter arrears referred to as additional salary)

2. Find out tax on total income as reduced by additional salary 3. From the amount arrived at in( no.1), deduct the amount arrived at in (2) 4. The resultant figure of ( no.3) is the tax on additional salary

5. Ascertain the previous years to which the additional salary relates and add the respective amount in respective preceding previous years

6. Find out the tax on total income as increased by the relevant additional salary in respect of each of such previous years.

7. Find out the tax on total income without adding the additional salary of each of the said previous years

8. From the amount so arrived, in (6), deduct the amount arrived at in (7).

9. The resultant figure arrived at in (8) is aggregate tax on additional salary 10. The relief under section 89 is the difference of (4) and (9).

Example: Suppose for the financial year 2008-09, taxable income of Mr. X is Rs.2,75,000/- he receives arrears salary of Rs.1,25,000/- on 01.03.2009 which includes Rs.50,000/- pertaining to the financial year 2007-08 . Total taxable income of Mr. X was

Rs. 1,40,000/- for the F.Y. 2007-08. Relief under Section 89 is computed as follows:

Particulars Amount

Total Taxable income for the F.Y.2008-09 : Rs.2,75,000

Add: Arrears pertaining to current F.Y.2008-09 : Rs.75,000

: Rs.3,50,000

Add: Arrears for previous F.Y.2007-08 : Rs.50,000

Total taxable income for F.Y.2008-09 : Rs.4,00,000

Income Tax onRs.4 lakhs is Rs.35,000+3%Cess : Rs.36,050 (1)

Income Tax on Rs.3.50 lakhs is Rs.25,000+3% Cess : Rs.25,750 (2)

Tax on additional salary : Rs.10,300 (4)

Total taxable income for F.Y. 2007-08(as per return) :Rs.1,40,000

Add arrears for the F.Y.2007-08 : Rs.50,000

Total taxable income for the F.Y.2007-08 : Rs.1,90,000

Income Tax on Rs.1.90 lakhs is Rs.12,000+3%Cess : Rs.12,360 (6)

Income Tax on Rs.1.40 lakhs is Rs.3000 +3%Cess :Rs.3,090 (7)

Tax on additional salary

: Rs.9,270 (8)

Relief u/s in respect of employees salary

received in arrears is (4 – 8)

: Rs.1,030 (10)

14

27. TDS on Pension Payments:

Branches are under obligation to deduct Tax on Pension payments made to Ex-staff members, Pensioners of Central/State Governments, Defence, Railways etc. All salary related TDS provisions are equally applicable on Pension Payments. Deduction

u/s 80 C/80CCC is to be allowed on production of necessary proof of actual investments made during the year. Form No.16 is to be issued to Pensioners by 30th April of each year.

For Senior Citizens of 65 years and above basic exemption limit is enhanced to Rs.2,25,000/-. Relief u/s 89 (1) can be considered on Pension Arrears on submission of

Form No.10E . Pension arrears paid to the legal heirs are taxable as income from other sources. Relief

u/s 89 (1) is not be considered for TDS purposes in such cases. Family Pension and arrears of family pension paid to the family of the deceased employee are taxable under the head “income from other sources”. A deduction of 33

1/3% of such income subject to a maximum of Rs.15000/- is available u/s 57 (ii)a. If the legal heirs are 2 or more, deduction up to Rs.15,000/- is available for each of legal heirs on their share of family pension. If the spouse is an employee of our Bank the family

pension received by him/her shall not be clubbed with regular salary income, it is to be treated as “ Income from other sources” for TDS purposes.

28. LOSS FROM HOUSE PROPERTY u/s 24: House property income may result at „Loss‟ on account of interest on HL,30 % deduction

for repairs from the rental income etc. in the case of self occupied /let out properties. This loss can be set off to the salary/Income of the employees for TDS Purposes.

Let-out Properties: For let out properties, deduction u/s 24 (a) at the fixed rate of 30 % of Annual value is

available towards repairs/insurance/collection charges irrespective of actual expenditure incurred. As provided by Rule 26 (b), the employee can submit a statement of such income or loss chargeable under the head “Income from House Property” together with

following form of verification prescribed under Rule 26 B (2).

Form of verification I,___________________________ (name of the employee/assessee), do declare that what is stated above is true to the best of my information and belief.

Signature

15

Self-Occupied Property:

In the case of self-occupied house property declaration under section 24 for interest on HL is eligible as detailed below.

A)Where loan is borrowed before April, 1, 1999 for purchase, construction, re-construction repairs or renewals of a house property, maximum HL interest eligible for deduction is Rs.30000/-.

B) where the loan is borrowed on or after April 1,1999 for acquiring or constructing a property and such acquisition or construction is completed within 3 years from the end

of the financial year in which the capital was borrowed, interest can be claimed up to a maximum limit of Rs.1,50,000/-.

C) If the loan is borrowed on or after April,1,1999 for re-construction, repairs or renewals of existing house property, HL interest eligible for deduction is up to Rs.30000/- only.

Note: Deduction shall not be available unless the employee/assesse furnishes a certificate from the person to whom any interest is payable on the capital borrowed/loan availed specifying the amount of interest payable for the purpose of such acquisition or

construction of the property. The certificate is to be obtained in the case of private borrowing also.

Interest on borrowed capital shall include the interest on housing loan, Demand Loan, OSL from our Bank or loan from Housing Finance Institutions/Banks availed for the specific purpose of house construction, repairs, renovations, reconstructions etc. the

construction of the house should be completed before 31st March of the financial year for claiming interest. However, the interest charged on Housing Loan during pre completion period can be claimed equally in 5 years on completion.

Computation of Income under House Property:

Particulars Self –Occupied Let out

Gross Annual value Nil 36,000

Less: Muncipal Taxes paid Nil 3,000

Net annual value Nil 33,000

Less: Deduction u/s24

1.Deduction @ 30% of annual value of repairs Nil 9,900

2. Interest on loan borrowed after 01.04.1999 1,12,000 1,40,000

Total deduction u/s 24 1,12,000 1,49,900

Loss from House Property 1,12,000 1,16,900

The loss from house property computed as above can be set off against income from salaries.

16

29. TDS ON OTHER PAYMENTS: A TDS chart is provided in Annexure as applicable for the current F.Y 2008-09.

i) Interest paid on term deposits, when it exceeds Rs.10,000/- p.a attracts TDS u/s 194

of the Income Tax where such interest exceeds Rs.10,000/- p.a.

ii) Branches can accept Form No.15G (in duplicate) from the Depositors (other than

firms and Ltd. Companies) for non deduction of tax at source on interest where such interest paid or credited exceeds Rs.10,000/- p.a (on or after 01.06.2007), but is below Rs.1.50 lac p.a. in the case of individuals, Rs.1.80 lac p.a. in the case of women and

Rs.2.25 lac in the case of senior citizens of 65 years and above. Senior Citizens have to submit only Form No.15H (in duplicate) for non deduction of tax at source from interest on deposits without any limit. One copy of declaration in Form No.15 G and Form No.15 H received from the depositors during a month shall be sent to the Office of the

Commissioner of Income Tax of the jurisdiction by 7th of the succeeding month without fail. Depositors including Senior Citizens (65 years and above) must be advised to submit 15 G or 15 H as the case may be during the month of April or at the time of

deposit itself for non deduction of tax at source. iii) TDS on Interest is to be made wherever required when interest is credited to the

account of the Depositors or paid to them. Usually interest is credited to the party‟s account on quarterly basis. Hence, TDS is to be made on quarterly basis and shall not be done in lump sum in the month of March. One of the major observation of the

Branch Auditors is non-deduction of tax at source on Interest uniformly at the time of credit in each quarter.

iv) TDS u/s 194C is to be made on contract payments where the amount credited or paid to a contractor or sub contractor exceeds Rs.20,000/- in a single payment or Rs.50,000/- in aggregate during a financial year. Expenditure on AMC, Couriers,

Generators, Rent etc. are covered under Contract Payments. TDS rates are furnished in the Annexure-I

v) TDS rate on Nithya Nidhi Deposit Agents Commission u/s 194H where Commission payment exceeds Rs.2,500/- p.a. Hence, revised rate applicable is 10.30%. The basic exemption limit of Rs.1,50,000/- to individuals (Rs.1,80,000/- for women)can be availed

by Agents. Accoridngly the agents can claim deduction u/s 80 C on eligible investments up to Rs.1.00 lakh. Quarterly return in From 24 Q is to be filed. Form No.16 is to be issued at the end of the financial year.

vi) TDS on rent paid is to be made u/s 194I where the aggregate of the amounts of rent income credited or paid or likely to be credited or paid during the financial year exceeds

Rs.1,20,000/-. CBDT has clarified that wherever Service Tax is paid on rent payments , TDS is to be made on the gross amount including Service Tax. Surcharge @ 10% is applicable if the payment exceeds Rs.10,00,000/- p.a.

vii) TDS rate u/s 194J on Professional/ Technical Fees shall be made u/s 194 J @ 10.30% or 11.33% as applicable depending upon the status of the payees where such payment exceeds Rs.20,000/- p.a.

17

viii) Generator Rent is to be treated as Rent for TDS u/s 194 I. Therefore, TDS is payable @10.30% or 11.33 % if the total payment exceeds Rs.1,20,000/- p.a.

30. Remittance of tax: Due date for remittance of TDS amount on all types of payments including Salary/ Pension, Interest on Deposits, Professional & Technical fees,

Contract Payments, Commission or Brokerage, Rent, AMC etc., is 7th of subsequent month.

Some of our branches are delaying in remitting TDS amount. Income Tax Authorities are vested with necessary powers to levy interest/ penalty for any delay in remittances since Bank is statutorily required to furnish Tax Audit Report of the bank to the Assessing

Officer of the Bank. Hence, TDS amount should be remitted by 7 th without fail. TDS made during the month of March be remitted by before commencement of Audit or 7th April whichever is early. Whenever the auditors observe non-deuction of shortfall in TDS,

the same may be deducted and remitted immediately For further guidance, if any required on TDS on other payments like interest on Deposits (U/S 194A), contract payments (U/S 194C(1)), Advertising contract (U/S 194C(2)), Commission or Brokerage (U/S 194H), Rent Payments (U/S 194I), and Professional/Technical Fees (U/S 194J) etc, including „e‟ filing of Form No.26Q, Branches may contact RO/Department concerned handling the subject at Head Office. 31. Tax Audit: Delay in remittance of TDS is the major observation in the Tax Audit Report by the

statutory auditors. Income Tax authorities are vested with necessary powers to levy interest/penalty for any delay in remittances. Hence TDS amount should be remitted by 7th without fail. TDS made during the month of March is to be remitted before

completion of audit or 7th April whichever is earlier. Wherever, the auditors observe non deduction or shortfall in TDS the same may be deducted and remitted immediately.

32. Penalty for default: u/s 201, if the person responsible (i.e employer) for deduction of tax at source has defaulted without reasonable cause or excuse in his obligation to deduct the whole or any part of the tax at source or after deducting fails to

pay tax to the credit of Central Govt. he shall be deemed to be an assessee in default in respect of such tax and shall be liable to:

(A) u/s 201 (1A) to pay simple interest at 12% p.a. on the amount of such tax from the

date on which such tax was deductible to the date on which such tax is actually paid.

(B) u/s 221 to pay penalty not exceeding the amount of such tax.

(C) U/s 271 for penalty equal to the tax that should have been deducted

(D) Prosecution u/s 276-B for failure to pay the tax deducted at source to the credit of

Central Govt.

(E) Penalty of Rs.100/- per day for delay in filing E-TDS returns, Form No.15G/15H etc.

u/s 272A.

(F) Penalty of Rs.10,000/- for failure to furnish PAN of the deductees in E-TDS Returns

u/s 272B.

18

33. QUARTERLY E-TDS RETURNS : i) Form No.24Q for TDS on salaries/Pension/Pigmy and 26Q for TDS on other payments

is to be filed at the end of each quarter before 15 th July, 15 th October, 15 th January and before 15th June for the last quarter. TDS details of the relevant 3 months only is to be furnished therein (Refer circular No.90-2006-BC-STF dated 29.09.2006). Form

No.27Q is the Quarterly Return for TDS on payments to NRIs, RNORs towards interest, dividend etc. All E-TDS Returns are to be filed with TIN-FCs only. Annual Returns in Form No.24 and Form No.26 have been dispensed with.

ii) TAN: Every Branch/Office deducting TDS is required to have a Tax Deduction Account Number (TAN) and quoting TAN in e-TDS returns, Form No.16, 16A is

mandatory. Branches/ Offices newly opened which have no TAN should apply for TAN in Form No.49B immediately along with requisite payment to the TIN-FCs. Failure to obtain TAN will attract penalty of Rs.5,000/-. Form No.49B is available with

Income Tax Department/ TIN-FCs. iii) Surrendering of TAN numbers pertaining to erstwhile 3 RRBs (i.e. Sree Anantha Grameena Bank, Rayalaseema Grameena Bank and Pinakini

Grameena Bank) offices and branches. All offices / Branches are aware that all Offices / branches of amalgamated Andhra Pragathi Grameena Bank had obtained TAN numbers for remitting tax. As considerable time has elapsed, all Offices / Branches are advised to surrender TAN numbers standing in the name of erstwhile three RRBs Offices / branches by writing a letter to the concerned TDS Assessing Officer of area concerned. iv) Permanent Account Number of the Bank is AAMFA8921A, which is required to be

furnished in Form No.16, 16A, Quarterly E-TDS Returns, Form No.24Q, 26Q, 27Q without fail. Every employee of the Bank is expected to have obtained a PAN.

v) PAN of the deductees: Quarterly Return without furnishing PAN of the Deductees is treated as Invalid Returns. Now-a-days, TIN-FCs are declining to accept Quarterly E-TDS Returns, if PAN is not

quoted in majority of cases.

• Quoting of PAN of the deductees is one of the essential requirements for all types of transactions including filing of Quarterly Returns. The Income Tax Dept. is very much

particular about the PAN of the deductees.

• CBDT has instructed TIN-FCs, that the Returns with less than specified percentage of

structurally valid PAN should not be accepted – Form 24Q – 95%, Form 26Q & 27Q – 85%.

• Branches/ Offices are advised to obtain PAN from employees, customers, vendors and

others compulsorily.

• Also ensure that the PAN submitted are structurally correct.

• Application i.e. Form No. 49 A for allotment of PAN shall be obtained from Authorized offices like UTI etc. located at District Head Quarters or near by big towns. In order to facilitate deductors who are facing difficulties in furnishing PAN of the

deductees and also to accommodate the deductees who have intimated their PAN,

19

Income Tax Department has specified that deductor can initially file a return containing deductee details who have provided valid PAN. They can subsequently file a Correction

return with details of remaining deductees. E.G. A challan payment of Rs.1,00,000/- has been made for non salary TDS against 100 deductees each with TDS of Rs.1,000/-. If PAN of only 75 deductees is available, the return cannot be filed since it is less than 85

% of PAN requirement. In such cases, the deductor may file a Return with challan amount of Rs.1,00,000/- and with details of 75 deductees with PAN and deductee total of Rs.75,000/-. The return will be accepted. Later a correction Return will have to be

filed with the details of the remaining deductees with same challan details. This facility is to be made use of only in extreme cases.

vi) Stopping of misuse or abuse of Form No.60 in lieu of PAN: Quoting PAN is mandatory in transactions such as opening of bank accounts, cash deposits above Rs.50,000/- during a day, payment of Rs.50,000/- or more for acquiring

RBI bonds etc. when such depositor do not have Permanent Account Number, he/she is required to make a declaration in Form No.60. Wherever declaration in Form No.60 is furnished, Branch Officials shall ensure that norms are strictly adhered to such as demanding proof of address etc. To facilitate information based investigation by the

Income Tax Department, correct and authentic quoting of PAN in Annual Information Return (AIR) on the specified transactions is very much required. Hence, Branches/ Offices are hereby advised to create awareness among customers regarding their legal

obligation to quote PAN correctly. 34. OTHER RELATED ISSUES:

i) Uniform deduction of tax from the salary of employees is mandatory. Failure to do so will attract penalty in addition to interest at 12% for the short payment in earlier months.

ii) Branches/Offices have to issue Certificate in Form-16 by 30 th April for TDS on salary to all the employees/ex-employees who have retired during the Financial Year. iii) Branches have to issue Certificate in Form-16 by 30th April for TDS on Pension

payments. iv) The employees whose Taxable income is more than Rs.1,50,000/- (women employees Rs.1,80,000/-) have to file Income Tax Return u/s 139(1) of the Income

Tax Act. v) Certificate in Form No.16A for TDS on Other Payments is to be issued by 30 th of the next month from the month of deduction i.e for TDS made in December 2008 is to be

remitted by 07.01.2009, TDS Certificate in Form No.16A is to be issued by 30.01.2009.

35. Annual Information Return (AIR) is a statutory Return prescribed u/s 285BA of the Income Tax Act. Out of the 8 specified type of transactions, 2 are relevant for branches. One is cash deposits to SB A/c aggregating to Rs.10.00 lakh or more during

the financial year and 2nd is on collection of subscription to RBI Savings Bonds for Rs.5.00 lakh and above during the financial year. Data of AIR is transmitted by the Bank to RBI for consolidation at their respective Public Debt Offices. Though the due date for the Bank for submission is 31st of August, branches shall submit the data to ROs by 31

st May without fail. Here also, obtaining and furnishing PAN of the customer/ depositor is compulsory. The branches are also advised to furnish complete and correct postal address with PIN code of all the customers.

20

36. BCTT: BCTT is applicable on cash withdrawal of Rs.50,000/- in a single day in case of

individuals and Rs.1.00 lakh in case of others from any account other than SB account and encashment of term deposits BCTT is applicable @ 0.1% if the cash withdrawals excess of the prescribed limit in a single day. However, BCTT is withdrawn

01.04.2009. 37. A WORD OF CAUTION:

Branches/Offices are advised to adhere to the guidelines on TDS and timely remittance as well as issue of TDS Certificate and submission of e-TDS Returns so as to avoid observations by Auditors/levy of penalty by income Tax Authorities, in future.

38. IMPORTANT: Despite clear instructions issued from time to time on TDS matters, it is observed that

some of the branches have not taken compliance of TDS Provisions seriously and giving scope to statutory Auditors to make some observations on non compliance of TDS provisions. Hence the branches/Offices are once again advised to exercise due care in complying with TDS Provisions.

Further it shall be noted that if the Bank is required to pay any interest or penalty, the head of the branch/office and concerned staff will be held responsible for the same. We

are reiterating that as per existing guidelines all branches/Offices shall calculate total income tax of the officers/employees and remit the same in 12 equal monthly installments unfailingly to the income Tax authority starting from April in every year

pertaining to all Assesses. In other words the salary disbursing authority shall deduct 1/12th of the Income tax

every month starting from every April and remit the same to Central Govt. A/C. In this connection all branches/offices are hereby informed that the income tax department had penalized heavily for non remitting income tax in 12 equal monthly installments and

recovered penalty from concerned employee & disbursing authority. Hence both salary disbursing authority and concerned employee/Officers are responsible for any lapses under the Act. This circular shall be circulated among all the staff working at Branches/Offices against

their acknowledgement. Clarification, if any, on this circular may be sought from the Personnel Department,

Head Office, Kadapa. (M.JAI PRAKASH)

CHAIRMAN Encl: Annexure (TDS Chart for the Financial Year 2008-09)

21

Circular No. 271 -2008-BC-STF Date:26.12.2008 ANNEXURE

TDS CHART FOR THE FINANCIAL YEAR 2008-09

Sl.No. Nature of Payment U/S Where the

amount exceed p.a.

Rate of TDS TDS

Certificate Form No.

Quarterly

„e‟ TDS Return

Due

Date Individual/ HUF/AOP/ BOI

Firms/ Ltd.Cos

Co-op Society, local

authority

1 Salaries 192 150000 Slabwise - - 16 24Q 15th

2 Interest on Deposits 194 A 10000 10.30% 11.33% 22.66%

10.30% 16 A 26Q 15th

3 (a) Contracts Payments 194 C(1) 20000 2.06% 2.266% 2.06% 16 A 26Q 15th

(b) Advertising Contract 194 C(2) 20000 1.03% 1.133% 1.03% 16 A 26Q 15th

4 Commission or Brokerage 194 H 2500 10.30% 11.33% 10.30% 16 A 26Q 15th

5 Rent Payments 194 I 120000 15.45% 22.66% 20.60% 16 A 26Q 15th

6 Professional/ Technical Fees 194 J 20000 10.30% 11.33% 10.30% 16 A 26Q 15th

7 Payments to non-residents 195 Fully taxable 33.99% 33.99% - 16 A 27Q 15th

1. The above rate of TDS are inclusive of Surcharge and education cess. Basic Rates of 1%, 2%, 5%, 10%, 15%, 20% and 30% are

increased by S.C @ 10% wherever applicable and 3% education cess on Basic Rate + SC.

2. Contract payments if exceed Rs.50000/- in aggregate during the Financial Year, TDS is applicable even where individual contracts are below Rs.20000/-. 3. TDS is to be remitted by 7th of succeeding month. Certificate in Form No.16A is to be issued by the end of next month from the

month of deduction unless a request is made by the deductee for consolidated one by 30th April. 4. Form No. 24Q for TDS on salaries, 26Q for TDS on other payments and Form No.27 Q on payment to non-residents are quarterly „e‟ TDS returns.

5. No surcharge for partnership firms. Where total income do not exceed Rs 1.00 crore during the financial year 2008-09 6. Where payment do not exceed Rs.10 lakh p.a., TDS rate is 30.90% only (without surcharge) u/s 195 for Non-Residents

22

Circular No. 271-2008-BC-STF dated 26.12.2008 (Relief for spreading arrears of income )

ANNEXURE – 2

FORM NO 10E (See Rule 21 AA)

Form for furnishing particulars of income `under Section 192(2) for the year ending 31st March, 20……………. for claiming relief under Section 89(1) by a Government servant or an employee in a public sector undertaking 1. Name and address of the employee: 2. Permanent account number (PAN) : 3. Residential status : Resident Particulars of income referred to in rule 21A of the Income Tax rules, 1962 during the previous year relevant assessment year 20… - 20.. 1 (a) Salary received in arrears or in advance in accordance with the provisions or sub-rule (2) of rule 21A:

(b) Payment in the nature of gratuity in respect of past services: extending over a period of not less than 5 years in accordance with the provisions on sub-rule (3) of rule 21A (c) Payment in the nature of compensation from the employer or:

former employer at or in connection with termination of employment after continuous service of not less than 3 years or where the unexpired portion of term of employment is also not less than 3 years in accordance with the provisions of sub-rule (4) or rule 21A (d) Payment in computation of pension of accordance with the:

provisions of sub rule (5) or rule 21A 2. Detailed particulars of payments referred to above may be given in Annexure I, II, IIA, III or IV as the case may be.

(Signature of the Employee) I, ………………………………………………………………..do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today the ……………. Day of 20…

Place : Date : Signature of the Employee

Contd.…..

23

Annexure-Q to Circular No.271 -2008-BC-STF dated26.12.2008 (Relief for spreading arrears of income )

ANNEXURE - A

(See item 2 of Form No.10E) ARREARS OR ADVANCE SALARY

S.

N0.

Particulars Amount

Rs. Ps.

1. Total Income (excluding salary received in arrears or advance)

2. Salary received in arrears or advance

3. Total Income (as increased by salary received in arrears or advance) (Add item 1 and item 2)

4. Tax on Total Income (as per item 3) after tax rebate

5. Tax on Total Income (as per item 1) after tax rebate

6. Tax on salary received in arrears or advance (difference of item 4 and item 5)

7. Tax computed in accordance with Table ‘A’

(brought from column 7 of Table ‘A;

8. Relief under section 89(1) (indicate the difference between the amounts mentioned against items 6 and 7)

TABLE ‘A’

(see item 7 of Annexure - A)

( Amt.in Rs.) Pre- vious

Year

Total Income of

the relevant

Previous year

Salary received in

arrears or

advance relating to

the relevant

previous year as

mentioned

in Col.1

Total Income (as increased by

salary received

in arrears or advance) of the

relevant

previous year mentioned in

Col.1(Add

Col.2&3)

Tax on Total

Income

(as per Col.2)

Tax on Total

Income

(as per Col.4)

Difference in Tax (amount

under Col.6

– amount under Col.5)

1 2 3 4 5 6 7

Note: 1. In this table details of salary received in arrears or advance relating to different previous

years may be furnished.

2.Annexures II, IIA, III or IV referred in item 2 of Form No.10E are not applicable for

salary arrears.