Income Tax 2015-16 for Salaried Employees – Circular issued by Income Tax Department

Income Tax 2015-16 for Salaried Employees – Circular issued by Income Tax Department – Income Tax Deduction from Salaried during the financial year 2015-16 (Assessment Year 2016-17) under Section 192 of the Income Tax Act 1961.

CBDT, Department of Revenue, Ministry of Finance has issued Circular 20/2015 dated 02.12.2015 in respect of Salaried Employees for the purpose of Income Tax Calculation for the financial year 2015-16 (Assessment Year 2016-17) and Deduction of certain income , savings and Expensees  from salaries under Section 192 of the Income Tax Act 1962.

The Circular contains detailed guidelines and instructions for income tax on Salaries under the following heads / topics (Click the heads below for detailed reading)

1. Rates of Income Tax applicable for the year 2015-16 (Assessment Year 2016-17)

2. Income Tax Deduction at Source from Salaries

3. Computation  of  income  under the head  income from house property  

4. Definition of Salary, Perquisite and Profit in lieu of Salary

5. Income not included under the head Salaries (Exemptions)

6. Deductions under Chapter VI-A of the Act

7. Income Tax Calculation method

 8. Income Chargeable to Income Tax under the Head Salaries

(1) The following income  shall  be chargeable  to income-tax under the head “Salaries” :

(a)       any salary due from an employer or a former employer to an assessee in the previous  year, whether paid or not;

(b)       any  salary  paid or allowed to him in the previous year by or on behalf of an employer or a  former employer though not due or before  it became due to him.

(c)       any arrears of salary paid or allowed to him in the previous year by or on  behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year.

(2) For the removal of doubts, it is clarified that where any salary paid in advance is included in the  total income  of any person for any previous year it shall not be included again in the total income of the person when  the salary becomes  due.

Any salary,   bonus,   commission   or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as “Salary”.

9. Deductions under Section 16 of the Act from the Income from Salaries

Entertainment Allowance [Section 16(ii)]:

A deduction is also allowed under section 16(ii) in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee, who is in receipt of a salary from the Government, a sum equal to one-fifth of his
salary(exclusive of any allowance, benefit or other perquisite) or five thousand rupees whichever is less. No deduction on account of entertainment allowance is available to non-government employees.

Tax on Employment [Section 16(iii)]:

The tax on employment (Professional Tax) within the meaning of article 276(2) of the Constitution of India, leviable by or under any law, shall also be allowed as a deduction
in computing the income under the head “Salaries”.

Want to Calculate your Income Tax for the Year 2015-16? Use GConnect online income tax calculator

Click here to reach GConnect Income Tax Calculator 2015-16 (with save option)

Click here to reach Instant GConnect Income Tax Calculator 2015-16

Download Income Tax Department Circular No.20/2015 (F.No. 275/192/2015-IT(B) dated 02.12.2015