Deliberate excess deduction of income tax
This query is : Resolved
SANJAY G.PATIL
(Querist)
30 March 2012
Sir,I am working in Life Insurance Corporation Of India.In our organisation for Contribuition towards Provident Fund only BASIC pay is considered.( Monthly HRA is also paid as a fixed percentage of Basic Pay only )However,my DDO (Drawing & Disbursing Officer)has considered Basic Pay + Dearness Allowance for calculating HRA Exemption.Is this correct ? Because of inclusion of DA in Basic Salary; Rent paid in excess of 1/10th of Salary goes into minus side.So DDO denied me the HRA Exemption & deducted Income Tax from my salary(Our Corporations' instructions / circular clearly states that 'Salary' for the purpose of HRA exemption means Basic salary paid to the employee for the relevant period.But DDO has intentionally overlooked this provision & denied the benefit of HRA exemption due to personal rivalry. So my query - Is there any provision or penalty for intentionally denying the provisions of Income Tax Act & for deduction of Excess Income Tax from salary which results in Short Payment of salary to the employee.What can I do in this situation ?Please guide.
O.D.SHARMA
(Expert)
30 March 2012
Dear Patil.You don't have much options.You can compute TAX & file return with claiming refund.If you have computed tax & given to your Office before deduction was better.
SANJAY G.PATIL
(Querist)
30 March 2012
Sir,
Thanx for your suggestion.But let me know sir,whether Dearness allowance is to be considered for calculating HRA exemption in my case (as in case of LIC Employees for PF contribuition only BASIC PAY is considered).
Thanx for your suggestion.But let me know sir,whether Dearness allowance is to be considered for calculating HRA exemption in my case (as in case of LIC Employees for PF contribuition only BASIC PAY is considered).
04 April 2012
Dear Sanjay, please understand the provisions clearly.
PF and Income Tax are 2 separate Acts.
For PF only basic salary is considered.
However, while computing exemtion for HRA, salary means salary plus DA.
Accordingly the calculation made by the DDO is correct.
If you have paid rental which is less than 10% of salary (salary + DA), then exemption will not be available.
PF and Income Tax are 2 separate Acts.
For PF only basic salary is considered.
However, while computing exemtion for HRA, salary means salary plus DA.
Accordingly the calculation made by the DDO is correct.
If you have paid rental which is less than 10% of salary (salary + DA), then exemption will not be available.
04 April 2012
Section 10(13A) read with Rule 2A provides exemption on account of HRA.
Rule 2A prescribes the quantum of exemption available, which will be the least of the following :
Rule 2A define salary as "‘Salary’ for this purpose includes basic salary as well as dearness allowance if the terms of employment so provide".
Rule 2A prescribes the quantum of exemption available, which will be the least of the following :
Rule 2A define salary as "‘Salary’ for this purpose includes basic salary as well as dearness allowance if the terms of employment so provide".
O.D.SHARMA
(Expert)
04 April 2012
Dear patil,
Agreed with you & LIC circular.The HRA can be fixed percentage of Basic .The DDO might have overlooked & certain cases are there,I have come across the TDS is more deducted(Estimated figure).You can claim this by computation as per circular & get benifit of HRA.any further ,We can discuss thru mail of CACI
Agreed with you & LIC circular.The HRA can be fixed percentage of Basic .The DDO might have overlooked & certain cases are there,I have come across the TDS is more deducted(Estimated figure).You can claim this by computation as per circular & get benifit of HRA.any further ,We can discuss thru mail of CACI
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