15-05-2014, 04:45 PM
Taxation of Salaried Employees Pensioners and Senior Citizens
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 Income-
tax 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:
Salaries
Income from house property
Profits and gains of business or profession.
Capital gains
Income from other sources.
IMPORTANT FEATURES OF SAHAJ & SUGAM:
• These are the simplest, technology enabled and taxpayer
friendly forms designed to facilitate faster digitalization and
speedy processing.
• These are coloured forms. Taxpayers can download forms
from website and print using a colour printer or A4 size white
paper. It is advisable for taxpayer to set the ‘properties’ in
printing options to ‘fit to page’ and print the forms on good
quality paper.
•The Acknowledgement copy (ITR-V) to be retained by
taxpayer may be printed in black & white.
WHAT IS “SALARY”
Salary is the remuneration received by or accruing to an
individual, periodically, for service rendered as a result of an express
or implied contract. The actual receipt of salary in the previous
year is not material as far as its taxability is concerned. The
existence of employer-employee relationship is the sine-qua-non
for taxing a particular receipt under the head “salaries.” For
instance, the salary received by a partner from his partnership
firm carrying on a business is not chargeable as “Salaries” but as
“Profits & Gains from Business or Profession”. Similarly, salary
received by a person as MP or MLA is taxable as “ Income from
other sources”, but if a person received salary as Minister of State/
Central Government, the same shall be charged to tax under the
head “Salaries”. Pension received by an assessee from his former
employer is taxable as “Salaries” whereas pension received on his
death by members of his family (Family Pension) is taxed as
“Income from other sources”.
TYPES OF CAPITAL GAINS
When a capital asset is transferred by an assessee after having
held it for at least 36 months, the Capital Gains arising from this
transfer are known as Long Term Capital Gains. In case of shares
of a company or units of UTI or units of a Mutual Fund, the
minimum period of holding for long term capital gains to arise is 12
months. If the period of holding is less than above, the capital
gains arising therefrom are known as Short Term Capital Gains.
WHO SHALL APPLY FOR P.A.N.
Section 139A of the Income Tax Act provides that every
person whose total income exceeds the maximum amount not
chargeable to tax or every person who carries on any business or
profession whose total turnover or gross receipts exceed Rs.5 lakhs
in any previous year or any person required to file a return of
income u/s 139(4A) shall apply for PAN. Besides, any person not
fulfilling the above conditions may also apply for allotment of PAN.
With effect from 01.06.2000, the Central Government may by
notification specify any class/classes of person including importers
and exporters, whether or not any tax is payable by them, and
such persons shall also then apply to the Assessing Officer for
allotment of PAN.