INCOME TAX
Circular Number:
006
File Number:
275/192/2004-IT(B)
Dated 25/01/2005
Reference
: Circular No. 6 of 2004 dated 6-12-2004 of CBDT—Deduction of tax at source
from salaries under section 192 of the Income-tax Act.
1.
Sub-para. 4.4 at pages 5 and 6 (271 ITR (St.) 102) of the circular under
reference may be read as follows :
"Deposit of tax deducted :
4.4 According to the provisions of section 200, any person deducting any sum in
accordance with the provisions of section 192 or paying tax on non-monetary
perquisites on behalf of the employee under section 192(1A), shall pay the sum
so deducted or tax so calculated on the said non-monetary perquisites, as the
case may be, to the credit of the Central Government in the prescribed manner
(vide rule 30 of the Income-tax Rules, 1962). In the case of deductions made
by, or, on behalf of the Government, the payment has to be made on the day of
the tax-deduction itself. In other cases, the payment has to be made within one
week from the last day of month in which deduction is made."
2. Sub-para 4.10 at page 8 (271 ITR (St.) 104) of the circular under reference
may be read as follows :
"Challans for deposit of TDS :
4.10 While making the payment of tax deducted at source to the credit of the
Central Government, it may be ensured that the correct amount of income-tax is
recorded in the relevant challan. It may also be ensured that the right type of
challan is used. The relevant challan for making payment of tax deducted at
source from salaries is challan No. ITNS-281. Where the amount of tax deducted
at source is credited to the Central Government through book adjustment, care
should be taken to ensure that the correct amount of income-tax is reflected
therein."
3. Item No. VII of sub-para 5.1 at page 14 (271 ITR (St.) 112) of the circular
under reference may be read as follows :
"VII. Interest free or concessional loans :
It is common practice, particularly in financial institutions, to provide
interest free or concessional loans to employees or any member of his
household. The value of perquisite arising from such loans would be the excess
of interest payable at prescribed interest rate over interest, if any, actually
paid by the employee or any member of his household. The prescribed interest
rate would now be the rate charged per annum by the State Bank of India as on
the 1st day of the relevant financial year in respect of loans of the same type
and for the same purpose advanced by it to the general public. Perquisite value
would be calculated on the basis of the maximum outstanding monthly balance
method. For valuing perquisites under this rule, any other method of
calculation and adjustment otherwise adopted by the employer shall not be
relevant.
However, small loans up to Rs. 20,000 in the aggregate are exempt. Loans for
medical treatment specified in rule 3A are also exempt, provided the amount of
loan for medical reimbursement is not reimbursed under any medical insurance
scheme. Where any medical insurance reimbursement is received, the perquisite
value at the prescribed rate shall be charged from the date of reimbursement on
the amount reimbursed, but not repaid against the outstanding loan taken
specifically for this purpose."
Hindi version shall follow.
(Sd.) Anand Jha,
Deputy Secretary (Budget).
[F. No. 275/192/2004-IT(B)]