Welcome to ACCOUNTANT OF RAJASTHAN ! Feel free to explore here ! We share only relevant RULES for you !

Friday, 9 December 2022

Income Tax Assessment for salaried employees

Hello friends,

In February all government servants are required to assess their yearly income and present an assessment form for calculating t.d.s of income tax on tentative income for financial year

therefore here is an excel form for your help to calculate the income tax on income

Here you may find a pdf of allowable deductions under the income tax act as per the rules

exempt income/allowance 

S. N.

Section

Particulars

Benefits

A.

Allowances

1.

10(13A)

House    Rent    Allowance (Sec. 10(13A) & Rule 2A)

Least of the following is exempt:

a)  Actual HRA Received

b)   40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)

c)  Rent paid minus 10% of salary

*   Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission

Note:

i.    Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent

ii.   It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].

2.

10(14)

Children              Education Allowance

Up to Rs. 100 per month per child up to a maximum of 2 children is exempt

3.

10(14)

Hostel              Expenditure Allowance

Up to Rs. 300 per month per child up to a maximum of 2 children is exempt

4.

10(14)

Transport           Allowance granted to an employee to meet expenditure for the purpose of commuting between place of residence and place of duty

Rs. 3,200 per month granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with disability of lower extremities

5.

Sec. 10(14)

Transport Allowance to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not

Amount of exemption shall be lower of following:

a)   70% of such allowance; or

b)   Rs. 10,000 per month.


 

 

 

in      receipt      of      daily allowance.

 

6.

10(14)

Conveyance Allowance granted to meet the expenditure                     on

conveyance                      in performance of duties of an office

Exempt to the extent of expenditure incurred

7.

10(14)

Any Allowance granted to meet the cost of travel on tour or on transfer

Exempt to the extent of expenditure incurred

8.

10(14)

Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

Exempt to the extent of expenditure incurred

9.

10(14)

Helper/Assistant Allowance

Exempt to the extent of expenditure incurred

10.

10(14)

Research            Allowance granted for encouraging the academic research and other professional pursuits

Exempt to the extent of expenditure incurred

11.

10(14)

Uniform Allowance

Exempt to the extent of expenditure incurred

12.

10(7)

Foreign allowances or perquisites paid or allowed by Government to its employees (an Indian citizen) posted outside India

Fully Exempt

13.

-

Allowances to Judges of High Court/Supreme Court (Subject to certain conditions)

Fully Exempt.

Friday, 31 March 2017

what is GAAR ?

What is full form of GAAR ?  or What is GAAR ?

The full form of GAAR is : General Anti-Avoidance Rules

What is GAAR in simple terms ?

Tax Avoidance is an area of concern across the world.  The rules are framed in different countries to minimize such avoidance of tax.  Such rules in simple terms are known as  " General Anti Avoidance Rules "  or GAAR.   Thus GAAR is a set of general rules enacted so as to check the tax avoidance.


Why News for GAAR has been prominent in India in recent times ?

News for GAAR has been in prominence in last few years as Indian Government has taken initiative to introduce GAAR or General Anti Avoidance Rules with a view to increase tax collections.


Background for GAAR :

Lord Tomlin has well said "Every man is entitled to order his affairs so that tax attaching under the appropriate Acts is less than it otherwise would be" (IRC v Duke of Westminster).   People adopt various methods so that they can reduce their total tax liability.  

The methods adopted to reduce their tax liability can be broadly put into four categories : "Tax Evasion";  "Tax Avoidance",  "Tax Mitigation" and "Tax Planning".  The difference between these four methods some times becomes blurred  owing to the perception of the tax authorities and / or tax payer.     [Click Here to read the difference between Tax Evasion", "Tax Avoidnace" , "Tax Mitigation, Tax Planning].

GAAR refers to the second category i.e. tax avoidance.


What is Difference between GAAR and SAAR ?

Anti Avoidance Rules are broadly divided into two categories namely "General" and "Specific".   Thus, legislation dealing with "General" rules are termed as GAAR, whereas legislation dealing with "Speicifc  avoidnace are termed as "SAAR"

In India till recently SAAR was in vogue i.e. laws were amended to plug specific loopholes as and when they were noticed or were misused enmasse.  However, now Indian tax authorities wants to move towards GAAR but are facing severe opposition as tax payers fear that these will be misused by tax authorities by giving arbitrary and wide interpretations.  We can say SAAR being more specific provide certainty to taxpayers where as GAAR being general in nature can be misused and is subject to arbitrary interpretation by tax authorities.


GAAR Definition :

GAAR is a concept which generally empowers the Revenue Authorities in a country to deny the tax benefits of transactions or arrangments which do not have any commercial substance or consideration other than achieving the tax benefit.    Whenever revenue authorities question such transactions, there is a conflict with the tax payers.   Thus, different countries started making rules so that tax can not be avoided by such transactions.   Australia introduced such rules way back in 1981.  Later on countries like Germany, France, Canada, New  Zealand, South Africa etc too opted for GAAR.   However, countries like USA and UK have adopted a cautious approach and have not been aggressive in this regard.

Thus, in nutshell we can say that GAAR usually consists of a set of broad rules which are based on general principles to check the potential avoidance of the tax in general, in a form which can not be predicted and thus can not be provided at the time when it is legislated.
 GAAR in India  (Chronology of GAAR controversy in India)

In India, the real discussions on GAAR came to light with the release of draft Direct Taxes Code Bill (popularly known as DTC 2009) on 12th August 2009.  It contained the provisions for GAAR.  Later on the revised Discussion Paper was released in June 2010, followed by tabling in the Parliament on 30th August, 2010, a formal Bill to enact the law known as the DirectTaxes Code 2010.  The same was to be made applicable wef 1st April, 2012.   However, owing to negative publicity and pressures from various groups, GAAR was postponed to at least 2013, and was likely to be introduced alongwith the Direct Tax Code (DTC) from 1st April 2013.   Moreover, an Expert Committee has been set by Prime Minister (Manmohan Singh) in July 2012 to vet and rework the GAAR guidelines issued in June 2012.   The latest reports (September 2012) indicates, it may not be implemented even for 3 years i.e. this will be postponed for 3 years (2016-17).   Some of recent developments about GAAR are :-
   
    (a) 16th March, 2012 : Finance Minister, Pranab Mukherjee takes a tough stand and announces that the government will crack down on tax avoidance effective from fiscal year 2012-13
    (b) 7th May, 2012 : Finance Minister, Pranab Mukherjee forced to eat his words and agreed to defer GAAR by a year as his announcements spooked oversea investors
    (c) 28th June, 2012 : Finance Ministry releases first draft on GAAR;   There is wide criticism of the provisions.
    (d) 14th July, 2012 : PM, Manmohan Singh, forms review committee under Parthasarathi Shome, for preparing a second draft by 31st August and final guidelines by 30th September, 2012

    (e) 1st September, 2012 : Shome Committee recommends to defer GAAR by three years.   It also recommends some more investor friendly measures
    (f) 14th January, 2013 : GoI partially accepts the recommendations of Shome Committee and has decided to defer the same for 2 years and will now be effective from the year 2016-17

 (g) On 27th September, 2013, GoI issued notification and as per this notification  GAAR would be applicable to only to foreign institutional investors that have not taken the benefit of an agreement under Section 90 or Section 90A of the I-T Act or Double Taxation Avoidance Agreement (DTAA).  Thus now  (a) investments made by foreign investors prior to August 2010 will not attract GAAR; ( b) GAAR provisions that will come into effect from April 2016 and (c) apply only  to business arrangements with a tax benefit exceeding Rs3 crores.
 
Some other rules notified includes : "Where a part of an arrangement is declared to be an impermissible avoidance arrangement, the consequences in relation to tax shall be determined with reference to such part only,"   Before invoking the GAAR provisions, tax officials would have to be "issue a notice in writing to the assessee seeking objections, if any, to its applicability".

However, this notification has been criticised as according to this notification the investments made prior to 30th August, 2010 will be certainly out of GAAR scrutiny, but the rules place other arrangements under the scrutiny of GAAR.  Therefore, experts are not happy that the uncertainty relating to other aspects except investments still continues.

The grandfathering under the notification also appears to be  merely a mirage, because only income from investments sold before August 2010 will be grandfathered.  This means investments made prior to  August 2010 but sold after GAAR becomes effective will be subject to GAAR.  (For definition of Grandfathering see below)


What was the Basic Criticism of GAAR ?  Why GAAR is dreaded ?

Many provisions of GAAR have been criticised by various people.   However, the basic criticism of GAAR provisions is that it is considered to be too sweeping in nature and there was a fear (considering poor record of IT authorities in India) that Assessing Officers will apply these provisions in a routine manner (or read misuse) and harass the general honest tax payer too.   There is only a fine distinction between Tax Avoidance and Tax Mitigation, as any arrangement to obtain a tax benefit can be considered as an impermissible avoidance arrangement by the assessing officer.   Thus, there was a hue and cry to put checks and balances in place to avoid arbitrary application of the provisions by the assessing authorities.   It was felt that there is a need for further legislative and administrative safeguards and at least a minimum threshold limit for invoking GAAR should be introduced so that small time tax payers are not harassed.

Two Examples to Understand GAAR provisions : (Source GAAR Committee)

Example 1:
Facts:
A business sets up an undertaking in an under developed area by putting in substantial investment  of  capital,  carries  out  manufacturing  activities  therein  and  claims  a  tax deduction  on  sale  of  such  production/manufacturing.  Is  GAAR  applicable  in  such  a  case ?
Interpretation:
There is an arrangement and one of the main purposes is a tax benefit. However, this is a case of tax mitigation where the tax payer is taking advantage of a fiscal incentive offered  to  him  by  submitting  to  the  conditions  and  economic  consequences  of  the provisions in the legislation e.g., setting up the business only in the under developed area. Revenue would not invoke GAAR as regards this arrangement.


Example 2:
Facts:
A business sets up a factory for manufacturing in an under developed tax exempt area. It then diverts its production from other connected manufacturing units and shows the same as manufactured in the tax exempt unit (while doing only process of packaging there). Is GAAR applicable in such a case ?
Interpretation:
There is an arrangement and there is a tax benefit, the main purpose or one of the main purposes  of  this  arrangement  is  to  obtain  a  tax  benefit.  The  transaction  lacks commercial substance and there is misuse of the tax provisions. Revenue would invoke GAAR as regards this arrangement.






Click Here for some of the Latest News About GAAR :




(D) 27th September 2013 : News For GAAR Government notifies implementation of GAAR from April 2016 (27th Septembr, 2013)



What is Grandfather clause :

Grandfather clause is a situation in which an old rule continues to apply to some existing situations, while a new rule will apply to all future situations. Frequently, the exemption is limited; it may extend for a set period of time, or it may be lost under certain circumstances.   An exemption that allows persons or entities to continue with an activity they were engaging in before but the same activity is not allowed to new entities. For example, a car manufacturer is allowed to produce cars with certain environment norms, but new entities are required to fullfil strictly norms.  



Monday, 6 February 2017

RAJASTHAN CIVIL SERVICES JOINING TIME RULES 1981

           GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (RULES DIVISION)
       RAJASTHAN CIVIL SERVICES (JOINING TIME) RULES, 1981 (Updated up to 31.07.2016)


 Preliminary:

(1) These Rules may be called the Rajasthan Civil Services (Joining Time) Rules, 1981.
(2) They shall come into force with effect from 01-04-1981 and shall apply to Government servants who are transferred on or after that date.
(3) These rules shall apply to all Government servants appointed to civil services and posts under the State Government, but shall not apply to –

(i) Work-charged employees,
(ii) Government servants paid out of contingencies,
(iii) Government servants engaged on contract and those who are not in whole time employment or Government.

Clarification
1[Attention is invited to Note 2 of FD Notification No. F.12(6)FD/Rules/05 dated 13.03.2006, in which it has been provided that in case of transfer only Mileage Allowance and incidental on the basis of fixed remuneration shall be admissible.
A doubt has been raised that if a probationer-trainee is transferred during the period of probation training joining time under Rajasthan Civil Services (Joining Time) Rules, 1981 shall be admissible or not. The matter has been examined and it is clarified that if a probationer-trainee is transferred during the period of probation-training he will be entitled to only Mileage Allowance and incidental on the basis of fixed remuneration and the provisions of Rajasthan Civil Services (Joining Time) Rules, 1981 shall not be applicable and the actual period required for travel will be treated as on duty.]


2. Definition : Unless there is something repugnant in the subject or context, the terms defined in these rules are used in these rules in the sense hereinafter explained :-

(1) Department of Government means concerned Administrative Department of the State Government.
Previous rules 127 to 146 of Rajasthan Service Rules
1. Added vide clarification No. 12(6)FD(Rules)/05 dated 21.08.2007
(2)
(2) Head of the Department means the authority declared as such under the General Financial & Accounts Rules.
(3) Joining Time means time allowed to a Government servant in which to join a new post or to travel to a station to which he is posted.
(4) Transfer means the movement of a Government servant from one post to another either within the same station or to another station to take up duties of a new post or in consequences of change of his head quarters.
3. Regulation of joining time of Government servants transferred to another Government/Organisation & Vice versa :
(1) When a Government servant to whom these rules apply is transferred to the control of another Government or organisation, which has made separate rules prescribing amount of joining time, his joining time for the journey to join his post under that Government/organisation and for the return journey, will be governed by those rules, unless different provisions are expressly made in their respective terms of deputation/foreign service, by mutual agreement between the lending and borrowing authorities.
(2) The joining time of Central Government servants and Government servants of other State Governments or any other organisation who are appointed to civil services and posts under the State Government on deputation or on foreign service basis, shall for joining the civil services and posts under the State Government and for the return journey, be regulated in accordance with these rules, unless different provisions are expressly made in their respective terms of deputation/foreign service, by mutual agreement between the lending and borrowing authorities.


4. Admissibility of Joining Time :
(1) Joining Time shall be granted to a Government servant on transfer in public interest to enable him to join the new post either at same or a new station. No joining time is admissible in case of temporary transfer for a period not exceeding 180 days. Only the actual transit time, as admissible in case of journey on tour, may be allowed.
1[Note :- Government servants who are transferred at their own request and not in public interest may be permitted to avail gazetted holiday (s) including Sunday if falling between the period immediately after relinquishing the charge of the old post and before assuming the charge of the new post.]
(2) Government servants declared surplus under the orders by the Government from time to time shall be eligible for joining time on their transfer from one post to another.
(3) Government servants who are discharged due to reduction of establishment from State Government/department/office and reappointed to another State Government department/office shall be entitled to joining time, if the orders of appointment to the new post are received by them while working in the old post.
1. Added vide FD Notification No. F.1(6)FD(Gr.-2)/81 dated 24.01.1986
(3)
If they are appointed to the new post after being discharged from the old post, the period of break may be converted into joining time without pay by the Head of Department provided that the break does not exceed 30 days and the Government servant has rendered not less than 3 years continuous service on the date of his discharge.
(4) For appointment to posts under the State Government on the results of competitive examination and/or interview open to Government servants and others, State Government employees and others, permanent/Central/Other State Government employees will be entitled to joining time, under these rules. But temporary employees of the State Government who have not completed 3 years of regular continuous service, though entitled to joining time would not be entitled to joining time pay.

5. Amount of Joining Time
(1) The joining time shall commence from the date of relinquishment of charge of the old post if the charge is made over in the forenoon or the following date if the charge is made over in the afternoon.

(2) The joining time shall be calculated from old headquarters in all cases including where a Government servant receives his transfer orders or makeover charge of the old post in a place other than his old headquarters, or where the headquarters of a Government servant while on tour is changed to the tour station itself or where his temporary transfer is converted into permanent transfer.

(3) (a) Not more than one day’s joining time shall be allowed to a Government servant to join a new post within the same station or which does not involve a change of residence from one station to another. For this purpose, the term ‘same station’ will be interpreted to mean the area falling within the jurisdiction of the municipality or corporation including such of suburban municipalities, notified area or cantonments as are continuous to the named municipality etc.

(b) In the case of a transfer of a Government servant within the same station which does not involve a change of residence from one station to another station, the transfer should involve the change of office building at the same station at a distance exceeding 2 km, for the purpose of admissibility of one day’s joining time to join a new post, under clause (a) of this sub-rule. If an officer hands over charge in the forenoon/afternoon he shall be required to take over charge of the new post at the same station in the forenoon of the next working day.

(4) In case involving transfer from one station to another and also involving change of residence, the Government servant shall be allowed joining time with reference to the distance between the old headquarters and the new headquarters by direct route and ordinary mode (s) of travel indicated in the following schedule. When holiday (s) follows (s) joining time, the normal joining time may be deemed to have been extended to cover such holiday (s).
(4)
Distance between the old headquarters and the new headquarters.
Joining Time admissible
Joining time admissible where the transfer necessarily involves continuous travel by road for more than 200 km.
1,000 km or less
10 days
12 days
More than 1,000 km
12 days
15 days
More than 2,000 km
15 days
15 days
1[Provided that when a Government servant Awaiting Posting Orders is transferred from one station to another station and involving change of residence, the Government Servant shall be allowed 4 days joining time including journey period, irrespective of distance and mode of travel.]
Note :- 1. Distance means actual distance charged by the Railways.

2. In cases where transfer of charge of an office consists of several stores or scattered works which the relieving and the relieved Government servant are required to inspect together before the transfer of charge is completed, the time taken for this purpose should not in any case exceed 7 days and the period so spent shall be treated as joining time extended under sub-rule (5) of this rule.

3. The taking over charge of District Treasury at Jodhpur and Jaipur shall be completed within a period not exceeding 7 days and in case of other District Treasuries in 3 days and the period so spent in taking over charge of the Treasuries shall be treated as joining time extended under sub-rule (5) of this rule.

(5) Extension of joining time beyond the limits indicated in Rule 5 (4) can be granted upto the maximum limit of 30 days by the Head of Department and beyond 30 days by the department of the Government, the guiding principle being that the total period of joining time should be approximately equal to 8 days for preparation plus reasonable transit time plus holidays, if any, following the extended joining time. While computing the transit time, allowance could be made for the time unavoidably spent due to disruption of transport arrangements caused by strike or natural calamities, or the period spent awaiting the departure of the steamer.


6. (1) Where a Government servant joins the new post without availing of the full joining time, the number of days of joining time, as admissible in sub-rule (4) of Rule 5 subject to the maximum of 15 days, reduced by the number of days actually availed of, shall be credited to his leave account as privilege leave.
2[Note :- In the case of a temporary Government servant, who is entitled to joining time but to no joining time pay under sub-rule 4, the unavailed period of joining time shall not be credited to his leave account as privilege leave.]
1. Added vide FD Notification No. F.1(6)FD(Gr.-2)/81 dated 02.02.1985
2. Added vide FD Notification No. F.1(6)FD(Gr.-2)/81 dated 30.12.1985
(5)
(2) Joining time may be combined with vacation and or regular leave of any kind or duration except casual leave.
(3) If a Government servant in transit on transfer is directed to proceed to a place different from that indicated in the initial transfer order, he shall be entitled to joining time already availed of upto the date of receipt of revised orders plus fresh spell of full joining time from the date following the date of receipt of the revised orders. The fresh spell of joining time in such cases shall be calculated from the place at which he received revised orders as if he is transferred from that place.

7. Joining Time Pay : A Government servant on joining time shall be regarded as on duty during that period and shall be entitled to be paid joining time pay equal to the pay which was drawn before relinquishment of charge in the old post. He will also be entitled to Dearness Allowance, if any appropriate to the joining time pay. In addition he can also draw compensatory allowance like City Compensatory Allowance, House Rent Allowance as applicable to the old station from which he was transferred. He shall not be allowed conveyance allowance or permanent travelling allowance.

8. Penalty for exceeding Joining Time : A Government servant who does not join his duty within his joining time, is not entitled to pay after the end of joining time. The period of absence from duty after the expiry of joining time admissible under these rules shall amount to interruption in the service involving forfeiture of past service unless, on satisfactory reasons being furnished, such absence is regularised by grant of extension in the normal period of joining time under these rules in the circumstances narrated in Rule 5(5) or is commuted into extraordinary leave by the authority competent to extend the Joining time.

9. Miscellaneous : Where any Department of Government is satisfied that the operation of any of these rules cause undue hardship to any particular case, that department of Government may by order, for reasons to be recorded in writing, dispense with or relax the requirement of that rule to such extent and subject to such exceptions and conditions as it may consider necessary for dealing with the case in a just and equitable manner, provided that no such order shall be made except with the concurrence of the Finance Department of Government.

10. If any doubt arises as to the interpretation of these rules, it shall be referred to the Finance Department of Government.

11. All rules, orders and instructions on the subject of joining time in force immediately before commencement of these rules and applicable to Government servants to whom these rules apply, are hereby repealed.

Wednesday, 25 January 2017

TAX ON NPS CONTRIBUTION (extra 50000 rs deduction)

SECTION 80 CCD: DEDUCTION IN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT (NPS)

SECTION 90 CCD (1) : DEDUCTION FOR CONTRIBUTION TO PENSION SCHEME

Deduction is available to individual only ( whether employed or not)

100% of the amount so paid or deposited (self or by employer) as does not exceed-
(a) in the case of an employee, 10% of his salary in the previous year; and
(b) in any other case, 10% of his gross total income in the previous year.

The total deduction under section 80ccd(1) for amount contributed by the employee and self-employed individual shall not exceed rs 150000. The contribution by employer is not included in limit of rs 150000

The contribution made by Central Government/ Employer to NPS under section 80ccd(2) is treated as salary of the employee. Employee shall get deduction for this amount under section 80ccd to the extent of 10%  of the salary.

However , as per the section 80cce the aggregate amount of deduction under section 80c, 80ccc and Section 80 ccd(1) shall not exceed 150000. However, the contribution made by the central government or any other employer to a pension scheme under section 80ccd (2) shall be excluded from the limit of 150000 provided under this section and 150000 provide in section 80cce.

for the purpose of this section, "salary" includes dearness allowance, if the terms of employment so provide, but exclude all other allowances and perquisites.



SECTION 80CCD(1B) : ADDITIONAL DEDUCTION FOR CONTRIBUTION TO NOTIFIED PENSION SCHEME NOT COVERED IN SUB-SECTION (1) ABOVE

An assessee referred to in sub-suction (1), shall be allowed a deduction in computation of his total income, whether or not any deduction is allowed under sub-section (1), of the whole of the amount paid or deposited in the previous year in his account under a pension scheme notified or as may be notified by the central government, which shall not exceed fifty thousand rupees.

Provide that no deduction under this sub-section shall be allowed in respect of the amount on which a deduction has been claimed and allowed under sub-section (1).....(Added by finance act, 2015)

Key note : This deduction of rs 50000/- is over and above the limit of rs. 150000/- as restricted under section 80cce.



Monday, 23 January 2017

House Rent Allowance

H.R.A pdf (english)
https://drive.google.com/open?id=0B-IfS1vHfJ_Yel9kQ0F0TEw1Yjg

Rules for calculating the allowed deduction under Income Tax for payment of house rent is under

As per section (13A) of income tax act 1961 read withRule 2A

Least of the following is exempt:
a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai,Calcutta, Delhi or Chennai)
c) Rent paid minus 10% ofsalary (* Salary = Basic + DA (if part of retirement benefit) + Turnover based Commission

Note:
i. Fully taxable, if HRA isreceived by an employee who is living in his own house or if he does not pay any rent
ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more
    than Rs. 1,00,000