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New income tax rules-dent in the salary

Like yearly, the Central Board of Direct Taxes (CBDT) updated their annual circular associated with withholding taxes through salary payments. The circular has been updated to sync with all the amendments brought in because of the Budget earlier this season relating to Budgetary 2013-14.

While there was certain amendments brought to the existing provisions of the Act, certain brand new provisions were unveiled. The key conventions introduced are seeing that under:

Levy of surcharge associated with 10% on income tax where the total income of the individual exceeds R1 crore during the FY 2013-14 only. Rebate of reduced of R2, 000 or just how much taxes payable, under section 87A for people having total taxable income approximately R5 lakh. Further deduction of R1 lakh under section 80EE with interest paid with housing loans, on fulfilment of the following conditions: Loan drawn in FY 2013-14; bank loan not exceeding R25 lakh; value of the residential property not necessarily exceeding R40 lakh and this the individual isn't going to own any residential property within the date of sanction of the loan.

One of the key amendments within the new circular is the change in the particular documentation requirements regarding claiming House Lease Allowance (HRA) exemption. A salaried worker claiming HRA exemption is currently required to mandatorily statement the PAN of the landlord, where the hire paid by your ex exceeds R1 lakh each year (which was previous R2 lakh per annum).

The CBDT had earlier during the year altered the treatment for issuing Style 16. Form 16 shall have two parts — part A and part B (Annexure). Part A might be downloaded from the income tax department’s website REMNANTS and must have a unique identification amount. Part B will have to be prepared by the particular deductor manually and issued for the deductee after thanks authentication and verification as well as Part A associated with Form 16.

If the employer ceases to deduct whole or any part of the tax at supply (TDS) or after deducting ceases to deposit the entire or any part of the tax to the credit of the central government in the prescribed time, he will be liable to interest consequences. Further, the modern circular,

in improvement, states that such employer will be deemed to possibly be an assessee in default according of such tax and will be liable for the particular penal action under section 221 of the Act.

Deductions, according of investment in Rajiv Gandhi Value Savings Scheme 2012, is now granted for three consecutive financial year beginning with the financial year where the listed equity gives you or units ended up first acquired. Employers should carefully study the circular to know the changes brought to the tax law associated with withholding of taxes on salary payment designed to their employees in order that they are compliant pertaining to taxes and reduce any interest and/or penal consequences which could occur as a result of any default.

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