Friends,
In each Financial Year Income Tax Department issues a Circular containing instructions "How to Deduct Tax at Source in case of Salary paid employees under section 192 during a Financial Year ". This year also the Income Tax Department has issued the circular no. 8/2012 [F.NO. 275/192/2012-IT(B)], DATED 5-10-2012 for the Financial Year 2012-13. In this circular each and everything relating to salary paid employees has been mentioned. At the end of this circular there have been given some examples which are very helpful to understand tax calculations in various circumstances. The detailed circular could be read as under and also can be Downloaded from the link given at the end of this post.
Section 192 of the Income-tax Act, 1961 - Deduction of tax at
source - Salary - Income-tax deduction from salaries under section 192 during
the financial year 2012-13
Circular no. 8/2012 [F.NO. 275/192/2012-IT(B)], DATED
5-10-2012
Reference is invited to Circular No. 05/2011, dated 16-8-2011
whereby the rates of deduction of income-tax from the payment of income under
the head "Salaries" under Section 192 of the Income-tax Act, 1961 (hereinafter
'the Act'), during the financial year 2011-12, were intimated. The present
Circular contains the rates of deduction of income-tax from the payment of
income chargeable under the head "Salaries" during the financial year 2012-13
and explains certain related provisions of the Income-tax Act, 1961 (hereinafter
the Act) and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts,
Rules, Forms and Notifications are available at the website of the Income Tax
Department- www.incometaxindia.gov.in.
2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2012:
As per the Finance Act, 2012, income-tax is required to be deducted
under Section 192 of the Income-tax Act 1961 from income chargeable under the
head "Salaries" for the financial year 2012-13 (i.e. Assessment Year 2013-14) at
the following rates:
2.1 Rates of tax
A. Normal Rates of tax:
| Sl. No. | Total Income | Rate of tax |
| 1 | Where the total income does not exceed Rs. 2,00,000/-. | Nil |
| 2 | Where the total income exceeds Rs. 2,00,000 but does not exceed Rs. 5,00,000/-. | 10 per cent of the amount by which the total income exceeds Rs. 2,00,000/- |
| 3 | Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-. | Rs. 30,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-. |
| 4 | Where the total income exceeds Rs. 10,00,000/-. | Rs. 1,30,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/- |
B. Rates of tax for every individual, resident in India, who is
of the age of sixty years or more but less than eighty years at any time during
the financial year:
| Sl. No | Total Income | Rate of tax |
| 1 | Where the total income does not exceed Rs. 2,50,000/-. | Nil |
| 2 | Where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000/-. | 10 per cent of the amount by which the total income exceeds Rs. 2,50,000/- |
| 3 | Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-. | Rs. 25,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-. |
| 4 | Where the total income exceeds Rs. 10,00,000/-. | Rs. 1,25,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/- |
C. In case of every individual being a resident in India, who is
of the age of eighty years or more at any time during the financial
year:
| Sl. No | Total Income | Rate of tax |
| 1 | Where the total income does not exceed Rs. 5,00,000/-. | Nil |
| 2 | Where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000/-. | 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/- |
| 3 | Where the total income exceeds Rs. 10,00,000/-. | Rs. 1,00,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/- |
2.2 Surcharge on Income tax:
There will be no surcharge on income tax payments by
individual taxpayers during FY 2012-13 (AY 2013-14).
2.3.1 Education Cess on Income tax:
The amount of income-tax shall be increased by Education Cess on
Income Tax at the rate of two per cent of the income-tax.
2.3.2 Secondary and Higher Education Cess on Income-tax:
From Financial Year 2007-08 on-wards, an additional surcharge is
chargeable at the rate of one per cent of income-tax (not including the
Education Cess on income-tax).
Education Cess, and Secondary and Higher Education Cess are payable
by both resident and nonresident assessees.
The detailed Circular could be Downloaded from Here (Please Open this page in Internet Explore only).
