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Income Tax Act, 1961 : Income Exempted and Chargeable under the Head "Salaries"

2. Relief When Salary Paid in Arrear or Advance

Click for Income Tax Calculator FY 15-16 that also Calculates Tax FY 12-13 to FY 14-15 helps to Analyse Your Case To Avail Tax Relief U/S 89(1) On Arrear

Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89(1) he may furnish to the person responsible for making the payment, such particulars in Form No. 10E duly verified by him, and thereupon the person responsible for making the payment shall compute the relief on the basis of such particulars and take the same into account in making the deduction.

No such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service.

3. Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property Section 24(b)

The employer in respect of loss claimed under the head "Income from house property" under Section 24(b) of the Act allows deduction of interest on borrowed capital from income from houses property as under:-

  • The deduction is allowed only in case of house property which is owned and is in the occupation of the employee for his own residence. However, if it is actually not occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him.
  • The quantum of deduction allowed as per table below:
    S.No Purpose of borrowing capitalDate of borrowing capitalMaximum Deduction allowable
    1 Repair or renewal or reconstruction of the houseAny time Rs. 30,000/-
    2 Acquisition or construction of the house Before 01.04.1999 Rs. 30,000/-
    3 Acquisition or construction of the house On or after 01.04.1999 Rs. 1,50,000/-
    This limit enhanced to Rs. 2.00 Lac w.e.f FY 14-15
    In case of Serial No. 3 of above table

    (i) The acquisition or constructing of the house should be completed within 3 years from the end of the FY in which the capital was borrowed. Hence it is necessary for the DDO to have the completion certificate of the house property against which deduction is claimed either from the builder or through self-declaration from the employee.

    (ii) Further any prior period interest for the FYs upto the FY in which the property was acquired and constructed shall be deducted in equal installments for the FY in question and subsequent four FYs.

    (iii) The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of Principal and Interest of the loan so repaid.

    Links & Description of Contents

    Scheme of Tax Deduction at Source from "Salaries"Income Chargeable under - "Salaries"Income Exempted Under The Head "SALARIES"
    1 - Section 192 Provisions on Taxable Income
    2 - Relief When Salary Paid in Arrear or Advance
    3 - Claim of Deduction of Interest u/s 24 (b)- Income from House Property
    4 - Due dates for payment of TDS
    5 - Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted
    6 - Certificate for Tax Deducted (Section 203)
    7 - TRACES
    8 -Furnishing Particulars pertaining to perquisites
    9 - Mandatory Quoting of PAN and TAN
    10 - TDS on Income from Pension
    11 - Income Chargeable Under the Head "Salaries"
    12 - Definition OF "Salary"
    13 - Perquisite - Rent Free Accomodation & Motor car provided by the Employer
    14 - Perquisite - Gas, electricity & water for household consumption
    15 - Interest free or concessional loans
    16 - Value of Subsidized / Free food / non-alcoholic beverages
    17- Transfer Grant Allowance
    18 - Medical Reimbursement by the Employer
    19 - Leave Travel Concession (LTC)
    20 - Death-cum-Retirement Gratuity
    21 - Commutation of Pension
    22 - Leave Encashment
    23- Retrenchment Compensation
    24 - Amount received on voluntary retirement
    25 - Sum received under a Life Insurance Policy
    26 - Payment from a Provident Fund
    27 - House Rent Allowance
    28 - Pension to Gallantry Awarded
    29 - Medical Treatment provided by Employer
    30 - Entertainment Allowance
    31 - Professional Tax Contents Highlights

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