Section 115BAC and Tax Deduction at Source Under Section 192

By

Section 115BAC and Tax Deduction at Source Under Section 192

Finance Bill 2020-21 introduced a New Section 115BAC, as per this Section, an assessee has an option to tax his Total Income as per the rates prescribed under Section 115 BAC subject to his forgoing of tax concessions otherwise available under the existing Income tax act.

This section is applicable for Individual / HUF, the option can be exercised at the time of filing of Return of Income, the option once exercised can not be withdrawn in the subsequent assessment year in respect of assessee with Business Income.
Assessees’ who are earing Income other than Business Income can opt on a yearly basis. At this juncture, we need to discuss the TDS liability of the Employer in respect of assessee who is going to opt Section 115BAC at the time of filing of return of Income.
As per this section, the option is available for assessee only.
If an employee who has the intention to avail the benefit of Section 115BAC, whether he can express his option to his Employer before deduction of tax at source.
In such cases whether the Employer is bound to accept his option and apply the rates as per Section 115BAC for the purpose of deduction of tax at source.
We will analyze the Provisions applicable for deduction of tax at source on Salaries.
As per Section 192, the employer is required to deduct tax at source on the amount payable at the average rate of income tax. This is to be computed on the basis of rates in force for the financial year in which payment is made. (i) Where the total income does not exceed Rs. 1,80,000/-
As per Section 192(1), it is the responsibility of the Employer to deduct tax on the basis of rates in force on the estimated income, of the assessee.
  1. Rates in force
  2. Estimated income
1) Rates In Force- Section 2(37A)-

Rates in force as is defined u/s 2(37A) mean the rates specified by the Finance Act or in accordance with any agreement or arrangement entered into by the Central Government u/s 90 or such agreement as is notified u/s 90A.

2) Estimated Income-

Start with “federal taxable wages” for each income earner in your household. ... Multiply federal taxable wages by the number of paychecks you expect in the tax year to estimate your income. See what other household income sources to include. Adjust all income amounts for expected changes during the year.

Concern Areas-

On critical analysis of the provisions of the Income-tax Act, it is the responsibility of the Employer to deduct tax according to the rates in force as explained in Section 192(1) read with circular issued on deduction of tax at source on salaries.

Comments

Post a Comment

Popular posts from this blog

Drug License (Retail/Wholesale) Registration.

By
Image
Drug License (Retail/Wholesale) Registration Licensing is mandatory to do business in Drugs & Cosmetics in India. The provisions for this have been made in the Drugs & Cosmetics Act, 1940 which is applicable to the whole of India. It is an Act to consolidate all the laws relating to drugs & cosmetics, which established the Drugs Control Department. In 1964, the Act was amended to include Ayurvedic & Unani drugs. In case a business is operating in more than two states, it has to obtain a drug license in every state in which business is being carried on. Drug license is location-specific. If drugs are sold or stocked for sale at more than one place, the application shall be made, and license shall be issued, in respect of each such place except migrant vendors. Once the license is granted to the business, all such a License must ensure that all the conditions in the drug license comply at all the time during the course of the business. All the records /reg...
Read more

What is TAN? and How is obtain and if there is duplicate TAN is Allotted then how can cancel.

By
Image
What is TAN? and How is obtain and if there is duplicate TAN  is Allotted then how can cancel. What is TAN?: TAN or Tax Deduction and Collection Account Number is a 10 digit alphanumeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan and TDS/TCS certificates. Who must apply for TAN? : All those persons who are required to deduct tax at source or collect tax at source on behalf of the Income Tax Department are required to apply for and obtain TAN. Why apply for TAN?: The provisions of section 203A of the Income-tax Act require all persons who deduct or collect tax at source to apply for the allotment of a TAN. The section also makes it mandatory for TAN to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. Why is it necessar...
Read more

MCA to introduce "SPICe+" form to replace existing SPICe form.

By
Image
MCA to introduce the "SPICe+" form to replace the existing SPICe form.  Stakeholders may please note that as part of the Government of India’s Ease of Doing Business initiative , the Ministry of Corporate Affairs would be shortly notifying   replacing the existing SPICe form to SPICe+ form SPICe+   would be an integrated Web form offering multiple services  name reservation, incorporation, DIN allotment, mandatory issue of PAN, TAN, EPFO, etc. SPICe+   web form, RUN shall be applicable only for the change of name of existing companies. However, incorporation of companies for names reserved through the existing RUN service shall continue to be filed in the existing SPICe form along with related linked forms as applicable and if marked under resubmission shall be resubmitted in SPICe form Resubmission of SPICe forms submitted prior to the date of deployment of  SPICe+   webform shall also be filed in the existing SPICe form and related...
Read more