05-07-2012, 11:58 AM
Taxation of Salaried Employees Pensioners and Senior Citizens
Taxation_Of_Salaried_Employees.pdf (Size: 121.82 KB / Downloads: 63)
INTRODUCTION
Income tax is an annual tax on income. The Indian Income
Tax Act (Section 4) provides that in respect of the total income of
the previous year of every person, income tax shall be charged
for the corresponding assessment year at the rates laid down by
the Finance Act for that assessment year. Section 14 of the Incometax
Act further provides that for the purpose of charge of income
tax and computation of total income all income shall be classified
under the following heads of income:
A. Salaries
B. Income from house property
C. Profits and gains of business or profession.
D. Capital gains
E. Income from other sources.
The total income from all the above heads of income is
calculated in accordance with the provisions of the Act as they
stand on the first day of April of any assessment year.
In this booklet an attempt is being made to discuss the various
provisions relevant to the salaried class of taxpayers as well as
pensioners and senior citizens.
FILING OF INCOME TAX RETURN
Section 139(1) of the Income-tax Act, 1961 provides that
every person whose total income during the previous year
exceeded the maximum amount not chargeable to tax shall furnish
a return of income. The Finance Act, 2003 has introduced Section
139(1B) which provides for furnishing of return of income on
computer readable media, such as floppy, diskette, magnetic
CALCULATION OF INTEREST
The Income Tax Act provides for charging of interest for
non- payment/short payment/deferment in payment of advance
tax which is calculated as below:
INTEREST U/S 234A:
For late or non furnishing of return, simple interest @ 1% for
every month or part thereof from the due date of filing of return to
the date of furnishing of return, on the tax as determined u/s 143(1)
or on regular assessment as reduced by TDS/advance tax paid or
tax reliefs, if any, under Double Tax Avoidance Agreements with
foreign countries.
INTEREST U/S 234B:
For short fall in payment of advance tax by more than 10%,
simple interest @ 1% per month or part thereof is chargeable from
1st April of the assessment year to the date of processing u/s 143(1)
or to the date of completion of regular assessment, on the tax as
determined u/s 143(1) or on regular assessment less advance tax
paid/ TDS or tax reliefs, if any, under Double Tax Avoidance
Agreements with foreign countries.