The finance Act, 2012 declared the Income Tax Slab for A. Normal Rates of tax, B. Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year and C. In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year.
Method of Tax Calculation:
Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2012-13. The income-tax is required to be calculated on the basis of the rates given above subject to provisions of section 206AA of the Act and shall be deducted at the time of each payment. No tax will, however, be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 2,00,000/- or Rs.2,50,000/- or Rs. 5,00,000/-, as the case may be, depending upon the age of the employee. (Some typical examples of computation of tax are given at Annexure-I).
Payment of Tax on Non-monetary Perquisites by Employer:
An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at his option, make payment of the tax on such perquisites himself without making any TDS from the salary of the employee. The employer will have to pay such tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head "salaries" to the employee.
Computation of Average Income Tax:
For the purpose of making the payment of tax mentioned in para 3.2 above, tax is to be determined at the average of income-tax computed on the basis of rate in force for the financial year, on the income chargeable under the head "salaries", including the value of perquisites for which tax has been paid by the employer himself.
ILLUSTRATION:
Suppose that the income chargeable under the head "salaries" of an employee below sixty years of age for the year inclusive of all perquisites is Rs. 4,50,000/-, out of which, Rs. 50,000/- is on account of non-monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions discussed in above para.
Method of Tax Calculation:
Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2012-13. The income-tax is required to be calculated on the basis of the rates given above subject to provisions of section 206AA of the Act and shall be deducted at the time of each payment. No tax will, however, be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 2,00,000/- or Rs.2,50,000/- or Rs. 5,00,000/-, as the case may be, depending upon the age of the employee. (Some typical examples of computation of tax are given at Annexure-I).
Payment of Tax on Non-monetary Perquisites by Employer:
An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at his option, make payment of the tax on such perquisites himself without making any TDS from the salary of the employee. The employer will have to pay such tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head "salaries" to the employee.
Computation of Average Income Tax:
For the purpose of making the payment of tax mentioned in para 3.2 above, tax is to be determined at the average of income-tax computed on the basis of rate in force for the financial year, on the income chargeable under the head "salaries", including the value of perquisites for which tax has been paid by the employer himself.
ILLUSTRATION:
Suppose that the income chargeable under the head "salaries" of an employee below sixty years of age for the year inclusive of all perquisites is Rs. 4,50,000/-, out of which, Rs. 50,000/- is on account of non-monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions discussed in above para.
| Income Chargeable under the head "Salaries" inclusive of all perquisites | Rs. 4,50,000/- |
| Tax on Total Salaries(including Cess) | Rs. 25,750/- |
| Average Rate of Tax [(25,750/4,50,000) × 100] | 5.72% |
| Tax payable on Rs.50,000/= (5.72% of 50,000) | Rs. 2,861/- |
| Amount required to be deposited each month | Rs. 240 (Rs. 238.4) (=2061/12) |
The tax so paid by the employer shall be deemed to be TDS made from the salary of the employee.
