INCOME TAX AND ITS IMPLICATIONS

SECTION- 192
PAYMENT MADE AS SALARIES
Applicability of Section 192:
• This section applies to any employer paying salary to an employee.
• TDS is deducted only if the employee’s total taxable income
exceeds the basic exemption limit:
• TDS is calculated based on the estimated annual income of the
employee.
• Employers consider: Declared Investments: Employees submit
investment declarations for deductions (e.g., LIC, PPF, ELSS) and
exemptions (e.g., HRA).
• Standard Deduction: A flat deduction of ₹75,000 is allowed for
all salaried individuals.
• Exemptions: Certain components of salary are exempt under
Section 10 (e.g., HRA, LTA, Gratuity).
• Deductions: Tax-saving investments and expenses are considered
under Chapter VI-A (Sections 80C, 80D, etc.).
 Tax Rates for TDS: Income Tax Slab Rates for FY 2024–2025 | AY 2025–2026
New Tax Old Tax
• TDS is deducted based on the slab rates Income Tax Slab Regime Regime (<
applicable for the financial year: (For All) 60 Years)
Up to ₹2,50,000 NIL NIL
• Old Tax Regime: Includes standard
₹2,50,001 – ₹3,00,000 NIL 5%
deductions, exemptions, and deductions.
₹3,00,001 – ₹5,00,000 5% 5%
• New Tax Regime (optional): Lower tax rates
₹5,00,001 – ₹6,00,000 10% 20%
but without exemptions and most deductions.
₹6,00,001 – ₹9,00,000 15% 20%
• A tax rebate Section 87A is available on ₹9,00,001 –
15% 30%
income up to Rs. 7 lakh under the new tax ₹10,00,000
regime and up to Rs. 5 lakh under the old ₹10,00,001 –
20% 30%
regime. The rebate is 100% of the income tax ₹12,00,000
payable, subject to a maximum limit of ₹12,00,001 –
20% 30%
₹25,000 under the New Tax Regime and ₹15,00,000
₹12,500 under the Old Tax Regime. Above ₹15,00,000 30% 30%
 Comparison Between Old and New Tax Regime (AY 2024–25)
Particulars Old Tax Regime New Tax Regime
Income Level for Rebate Eligibility ₹5,00,000 ₹7,00,000
Standard Deduction ₹75,000 ₹75,000
Effective Tax-Free Salary Income ₹5,50,000 ₹7,50,000
Rebate u/s 87A ₹12,500 ₹25,000
House Rent Allowance (HRA) Exemption ✓ X
Deduction u/s 80C (EPF, LIC, ELSS, PPF, etc.)
& other Chapter VI-A Deductions ✓ X

Leave Travel Allowance (LTA) ✓ X

Entertainment Allowance & Professional Tax ✓ X
Interest on Home Loan (u/s 24b) ✓ X
Medical Insurance Premium (u/s 80D) ✓ X
Exemption on Gratuity (Section 10(10)) ✓ ✓
Exemption on Leave Encashment (Section 10(10AA)) ✓ ✓

All Contributions to Agniveer Corpus Fund (Section 80CCH) ✓ ✓

Leave Travel Allowance (LTA) under the Old and New Tax

Regimes
Old Tax Regime (Pre-AY 2024-25):
Exemption on LTA: Under the Old Tax Regime, Leave Travel Allowance
(LTA) is eligible for tax exemption when it is used for traveling within India. This
is subject to certain conditions: The travel must be for personal purposes (e.g.,
vacation or family trips). Only the actual cost of the journey is exempt, with
the exemption being limited to the cost of transportation (train, bus, air travel,
etc.) and not accommodation or other incidental costs. Employees can claim LTA
exemption twice in a block of four years.

New Tax Regime (AY 2024-25):

LTA Exemption Removal: In the New Tax Regime, LTA is not available. This
is one of the significant differences between the two regimes. While the old
regime allows tax-exempt status for LTA under specified conditions, the new tax
regime does not provide any exemptions for LTA, even if the employee incurs
SECTION- 194 C
PAYMENTS MADE TO
CONTRACTORS OR SUB-
CONTRACTORS
Section 194C of the Income Tax Act, 1961 governs the Tax
Deducted at Source (TDS) on payments made for contractual
works. This section covers payments made for services, works,
and supplies under a contract.

Key Applicability and Rates under Section 194 C:

Any person (individual, company, firm, HUF, etc.) who makes a
payment to a contractor or sub-contractor for executing a
contract (work or supply) must deduct TDS under this section.
This includes public sector undertakings, corporates, and
individuals who make payments for contracts related to
construction, transportation, manufacturing, repairs, or
any other type of work, as long as the contract is not related to
professional or technical services (for which Section 194J applies).
Threshold for TDS Deduction:
TDS is required when the aggregate payments made during the financial
year exceed ₹30,000. For each contract, if the payment exceeds
₹30,000, TDS needs to be deducted.

Rate of TDS:
• 1% TDS is applicable on payments made to individuals or HUFs.
• 2% TDS applies when payments are made to corporates or other entities
(companies, firms,etc.).
• If the contractor does not provide a PAN, the TDS rate is increased to 20%.

Exemption from TDS:

• No TDS will be deducted if the contractor provides a lower deduction
certificate or no deduction certificate from the Income Tax Department
under Section 197.
• Contractors who do not fall under the taxable income category or whose
total income is below the taxable limit can apply for a nil TDS certificate.
SECTION- 194 I
TDS ON RENT PAYMENTS
1. Applicability:
Section 194I applies to payments made for rent under the following
circumstances:
• Rent on immovable property: Land, building, or part of a building, and
includes rent paid for office spaces, factory premises, etc.
• Rent on movable property: Machinery, equipment, vehicles, etc.

2. Threshold for TDS Deduction:

TDS under Section 194I is applicable when the payment of rent exceeds
₹2,40,000 per year to a single payee.
• If rent is paid on a monthly basis, TDS must be deducted once the
annual rent exceeds ₹2,40,000.
• Rent paid in a single payment: If the rent for a particular period
exceeds ₹2,40,000, TDS must be deducted on the total payment.
3. TDS Rates:
The rate of TDS under Section 194I depends on the type of rent being paid:
For Rent of Immovable Property:
10% of the payment.
For Rent of Movable Property (such as machinery, equipment, etc.):
2% of the payment.

*If the payee does not provide a PAN, TDS is deducted at 20%.
4. Timing of TDS Deduction:
TDS is deducted at the time of payment or credit, whichever occurs
earlier.
• If rent is paid on a monthly or quarterly basis, TDS should be deducted
at the time of each payment.
• In case of advance payment of rent, TDS should be deducted when the
payment is made.
SECTION- 194 J
PROFESSIONAL AND TECHNICAL
SERVICES
Section 194J of the Income Tax Act, 1961 pertains to Tax Deducted at
Source (TDS) on payments made to professionals, technical services, and
royalties. It applies when a person makes specific payments to professionals
or for technical services. Here’s a detailed breakdown:

Key Provisions of Section 194J:

Applicability:
Section 194J applies when a person makes payments for the following:
• Professional Services: Payments made to professionals like lawyers,
accountants, doctors, architects, etc.
• Technical Services: Payments for technical services, including
engineering, software services, technical consultancy, etc.
• Royalty Payments: Payments made as royalty under various
agreements.
• Director’s Remuneration: Payments made to directors of a company,
excluding salary paid to regular employees.
Threshold for TDS Deduction:
TDS under Section 194J is applicable when the payment
exceeds ₹30,000 in a financial year.
This threshold applies to each category of payment (i.e.,
professional, technical services, and royalty).

Rate of TDS:
• 2%: The TDS rate for Technical services. - 94JA
• 10%: The TDS rate for Professional services or Royalty
payments (excluding technical services). - 94JB
SECTION- 194 Q
TAX DEDUCTION ON
PURCHASE OF GOODS
• Applicability:
Section 194Q applies to any buyer who is responsible for
purchasing goods from a resident seller.

• Threshold for TDS Deduction:

TDS under Section 194Q is required when the aggregate
purchase value exceeds ₹50 lakh in a financial year. This
threshold applies separately to each seller.

• Rate of TDS:
The rate of TDS is 0.1% on the purchase amount exceeding ₹50
lakh.
This applies when the total purchase amount from the seller
exceeds ₹50 lakh in a financial year, regardless of whether the
payment is made in full or partially.
SECTION- 194 O
PAYMENTS MADE BY E-
COMMERCE OPERATORS
• Applicability:
E-commerce operators (like platforms facilitating online
transactions, e.g., Amazon, Flipkart, etc.) are required to deduct
TDS on payments made to e-commerce participants (sellers or
service providers) for the sale of goods or provision of services
through their platform.

• Rate of TDS:
This rate of 0.1 percent will be applicable (as per latest FCI CIRCULAR NO.
01/2024)
TDS Section Nature of Payment Threshold (₹) For Individual / HUF For Others

192 Salary Payments ₹ 2,50,000 applicable slab rate) applicable slab rate)
Payments to
194C Contractors/Sub- ₹30,000 1% 2%
Contractors
Rent (land, building, 10%/2%
194I ₹2,40,000 10%/2%
machinery, etc.)

Professional or Technical
194J ₹30,000 10%/2% 10%/2%
Services, Royalties, etc.

194Q Purchase of Goods ₹50,00,000 0.1% 0.1%

E-commerce transactions 1% (goods) / 5%

194O ₹5,00,000 1% (goods) / 5% (services)
(sale of goods/services) (services)
TDS RETURN
FORM 24Q & FORM26Q
Date of payment of TDS
Quarter Month of Due dates for depositing TDS
ending deduction (FY 2024-25)*
TDS Return Due Date
April 2024 7th May 2024
30th June DUE DATE FOR
May 2024 7th June 2024 QUARTE
2024 FORM 24Q & FORM
R
June 2024 7th July 2024 26 Q
July 2024 7th August 2024 APRIL TO
30th 31ST JULY
September August 2024 7th September 2024 JUNE
2024
September 2024 7th October 2024 JULY
31ST OCTOBER
TO SEPT.
October 2024 7th November 2024
31st
December November 2024 7th December 2024 OCT TO
31ST JANUARY
2024 DEC
December 2024 7th January 2025
January 2025 7th February 2025
JAN TO
31ST MAY
MARCH
February 2025 7th March 2025
31st March
2025 7th April 2025 (for tax deducted by govt.
March 2025 office)
30th April 2025 (for other deductors )
TDS CERTIFICATES
INTEREST AND PENALTIES
 ISSUE OF TDS/ TCS CERTIFICATES
As per CBDT Circular No. 1/2012, dated 9-4-2012, it is mandatory for all the deductors to
issue TDS certificate in Form No. 16/16A by generating the certificate through TIN central
system (TRACES) by downloading the certificate from the TIN website with a unique TDS
certificate number. These provisions are applicable in respect of all sums deducted on or
after 1-4-2012. The certificate so issued can be authenticated either by using digital
signature or manual signature
Sr. Form no Periodicit Cut off Date
No. y
1 16 - Salary Annual 15th June of following financial year

2 16A -Other than Quarterly Within 15 days from due date of

salary furnishing the TDS statement under rule
31A
3 27D Quarterly 30th July, 30th October, 30th January,
30th May
TDS Penalties and Interest
Section Provision Penalty/Interest

- Penalty for failure to deduct: Amount equal to the TDS

amount that should have been deducted.
Section 201 Failure to Deduct or Pay TDS - Interest for delay in deposit: 1% per month or part of
a month from the date on which tax was deductible
until the date of actual payment.
- Penalty of ₹100 per day for each day the default
Section 272A Penalty for Failure to Furnish TDS Returns continues.
- Maximum penalty of ₹500,000.
- Penalty equal to the amount of TDS that should have
Section 271C Penalty for Failure to Deduct TDS
been deducted but was not.
Penalty for Failure to Furnish TDS Returns on - Penalty of ₹10,000 to ₹1,00,000 for late filing or
Section 271H
Time incorrect filing of TDS returns.
- Interest of ₹200 per day for every day the TDS return
Section 234E Interest for Late Filing of TDS Return
is delayed.
- Interest of 1% per month or part of a month on the
Section 234A Interest for Delay in Payment of Tax tax payable, from the due date to the actual date of
payment.
Interest for Non-Payment or Short Payment of - Interest of 1% or 1.5% per month or part of the month
Section 234B
Tax on the tax due.
- Interest of 1% per month for each shortfall in payment
Section 234C Interest for Delay in Payment of Advance Tax
of advance tax for the respective quarters.
PROFESSIONAL TAX
AND REALTED IMPORTANT FORMS
 Who is liable to pay P. Tax in West Bengal?
• Employees: All employees earning a salary, including those working in
government, private, and other organizations.

• Professionals and Businessmen: Individuals running their own businesses,

such as doctors, lawyers, chartered accountants, and other professionals, as
well as companies and firms.

• Self-employed individuals: Those earning income through trade or

profession are also liable to pay
Rates P. Tax. Tax
of Professional
P. Tax (For
Income Range (Per Month)
Individuals/Employees)
Up to ₹10,000 ₹0
₹10,001 to ₹15,000 ₹100
₹15,001 to ₹25,000 ₹150
₹25,001 to ₹40,000 ₹200
₹40,001 and above ₹250
DUE DATE FOR FILING ANNUAL RETURN

• The annual return for professional tax is due on

or before 30th April of the assessment year.

• Adittionally, Prefessional fee on Trade of Rs. 2500

must be submitted on or before 31st July of the
next Financial year
THANK YOU