CPT COACHING CLASSES - DECEMBER 2009 CPT EXAM
SVAX COACHING CLASSES FOR CA STUDENTS is happy to announce the starting of fresh batches for DECEMBER, 2009 CPT EXAM.
START DATE : 15th JULY 2009
BATCHES: REGULAR MORNING BATCH
REGULAR EVENING BATCH
WEEK-END BATCH
LIMITED NUMBER OF STUDENTS IN EACH BATCH
PERSONAL ATTENTION
PROFESSIONALLY QUALIFIED & EXPERIENCED TEACHERS
EXTENSIVE COVERAGE OF THEORY & PROBLEMS
DETAILED & EASY TO UNDERSTAND NOTES
REGULAR TESTS, EVALUATION & FEEDBACK
CONVENIENT LOCATION
AFFORDABLE FEE
FOR REGISTRATION, CONTACT : Mr.MURALIDHAR.V CELL: 98450 52267
SVAX COACHING CLASSES FOR CA STUDENTS
195, SECOND FLOOR, 100 feet RING ROAD
NEAR JANATHA BAZAAR
BANASHANKARI 3rd STAGE, BANGALORE- 560 085
KARNATAKA
Wednesday, June 17, 2009
FREE NOTES FOR CPT/PCC/IPCC EXAMS
Dear CA Students,
GREAT NEWS FOR YOU!
We are ready to start posting excellent free of cost notes on difficult topics for CPT/PCC/IPCC EXAMS.
While short notes will be posted in this blog, detailed notes with tables,charts etc., will be mailed directly to your email ID.
If you wish to receive free of cost notes periodically, email us to muralisvax@gmail.com giving your full name, city, exam you are preparing for & your email ID. You will start receiving our notes free of cost.
Muralidhar.V
SVAX COACHING CLASSES FOR CA STUDENTS, Bangalore
GREAT NEWS FOR YOU!
We are ready to start posting excellent free of cost notes on difficult topics for CPT/PCC/IPCC EXAMS.
While short notes will be posted in this blog, detailed notes with tables,charts etc., will be mailed directly to your email ID.
If you wish to receive free of cost notes periodically, email us to muralisvax@gmail.com giving your full name, city, exam you are preparing for & your email ID. You will start receiving our notes free of cost.
Muralidhar.V
SVAX COACHING CLASSES FOR CA STUDENTS, Bangalore
Sunday, June 14, 2009
Income from Salary - Deductions
INCOME FROM SALARIES
DEDUCTIONS FROM SALARY
So far we have discussed about calculating the gross salary of the employee i.e Taxable payments + Taxable allowances + Taxable value of perquisites.
From the gross salary calculated as above, the following are to be deducted u/s 16(ii) and 16(iii) to arrive at “Income from Salary” in the previous year.
Deductions from Gross Salary u/s 16
1. Entertainment allowance [Section 16(ii)]
2. Professional Tax [Section 16 (iii)]
1. Entertainment allowance [Section 16 (ii)]
a) Government Employees
· The actual entertainment allowance received by a government employee is first included in arriving at his gross salary.
· Thereafter, from the gross salary, the least of the following should be deducted :
i) One-fifth of his basic salary or
ii) Rs. 5000/- or
iii) Entertainment allowance actually received
Note : To claim the deduction, it is not necessary that the employee should have actually spent the entertainment allowance received. The amount actually spent is also not important. Whether he spends more less or nothing out of the entertainment allowance is not at all relevant to claim the above deduction.
b) Non – government employees
· The actual amount of entertainment allowance received should be included in arriving at the gross salary of thee employee.
· No deduction is available to non – government employees towards entertainment allowance received. The full amount is taxable.
2. Professional Tax [Section 16 (iii)]
· It is a tax to be paid by every employee to the State Government.
· Professional tax actually paid by the employee during the previous year is allowed as a deduction from Gross salary of the employee.
· Sometimes, the employer either pays the professional tax on behalf of the employee or reimburses the professional tax amount to the employee. In these case, the amount paid / reimbursed by the employer should be included in calculating the gross salary of the employee and then deducted from gross salary u/s 16 (iii).
SPECIAL POINTS
a) Relief Under Section 89
i) Under the following circumstances, an employee’s taxable income may be higher and may be taxed at higher rate of Income tax (higher slab)
· The employee receives in a previous year salary for more than 12 months.
· The employee receives in a previous year arrears of salary pertaining to earlier previous year/s which were not taxed in such earlier previous year/s on due basis.
· The employee receives advance salary (i.e. salary for the later previous year/s) in a previous year.
· The employee receives profits in lieu of salary pertaining to earlier previous year/s which were not taxed in such earlier previous year/s.
In the above cases, the employee can make an application U/S 89 to the Assessing (Income tax) Officer for relief. The Assessing officer shall grant such relief to the assessee as prescribed in rule 21A.
· Similarly, a member of the employee’s family may receive arrears of family pension in a previous year. Because of this, his / her income may be taxed at a higher rate of income tax. Such member of the employee’s family can also claim relief under section 89 as described above.
b) Deduction Under Section 80C
· When income under the five heads of income i.e Income from salary. Income from house property, Profits and gains of business or profession, Capital gains and Income from other sources are added together we get Gross Total Income of the Assessee.
· From the Gross Total Income, an assessee will be entitled to deduction U/S 80C towards the amount invested in LIC policies, provident funds, payment of tuition fees, repayment of housing loans etc. subject to a maximum of Rs. 1,00,000 in a previous year.
DEDUCTIONS FROM SALARY
So far we have discussed about calculating the gross salary of the employee i.e Taxable payments + Taxable allowances + Taxable value of perquisites.
From the gross salary calculated as above, the following are to be deducted u/s 16(ii) and 16(iii) to arrive at “Income from Salary” in the previous year.
Deductions from Gross Salary u/s 16
1. Entertainment allowance [Section 16(ii)]
2. Professional Tax [Section 16 (iii)]
1. Entertainment allowance [Section 16 (ii)]
a) Government Employees
· The actual entertainment allowance received by a government employee is first included in arriving at his gross salary.
· Thereafter, from the gross salary, the least of the following should be deducted :
i) One-fifth of his basic salary or
ii) Rs. 5000/- or
iii) Entertainment allowance actually received
Note : To claim the deduction, it is not necessary that the employee should have actually spent the entertainment allowance received. The amount actually spent is also not important. Whether he spends more less or nothing out of the entertainment allowance is not at all relevant to claim the above deduction.
b) Non – government employees
· The actual amount of entertainment allowance received should be included in arriving at the gross salary of thee employee.
· No deduction is available to non – government employees towards entertainment allowance received. The full amount is taxable.
2. Professional Tax [Section 16 (iii)]
· It is a tax to be paid by every employee to the State Government.
· Professional tax actually paid by the employee during the previous year is allowed as a deduction from Gross salary of the employee.
· Sometimes, the employer either pays the professional tax on behalf of the employee or reimburses the professional tax amount to the employee. In these case, the amount paid / reimbursed by the employer should be included in calculating the gross salary of the employee and then deducted from gross salary u/s 16 (iii).
SPECIAL POINTS
a) Relief Under Section 89
i) Under the following circumstances, an employee’s taxable income may be higher and may be taxed at higher rate of Income tax (higher slab)
· The employee receives in a previous year salary for more than 12 months.
· The employee receives in a previous year arrears of salary pertaining to earlier previous year/s which were not taxed in such earlier previous year/s on due basis.
· The employee receives advance salary (i.e. salary for the later previous year/s) in a previous year.
· The employee receives profits in lieu of salary pertaining to earlier previous year/s which were not taxed in such earlier previous year/s.
In the above cases, the employee can make an application U/S 89 to the Assessing (Income tax) Officer for relief. The Assessing officer shall grant such relief to the assessee as prescribed in rule 21A.
· Similarly, a member of the employee’s family may receive arrears of family pension in a previous year. Because of this, his / her income may be taxed at a higher rate of income tax. Such member of the employee’s family can also claim relief under section 89 as described above.
b) Deduction Under Section 80C
· When income under the five heads of income i.e Income from salary. Income from house property, Profits and gains of business or profession, Capital gains and Income from other sources are added together we get Gross Total Income of the Assessee.
· From the Gross Total Income, an assessee will be entitled to deduction U/S 80C towards the amount invested in LIC policies, provident funds, payment of tuition fees, repayment of housing loans etc. subject to a maximum of Rs. 1,00,000 in a previous year.
SVAX CA COACHING CLASSES
Dear CA Students,
Welcome to my blog www.svax-ca-classes.blogspot.com
Through this blog, it is my desire to interact with CA Students and help them with their exam preparation. I will be posting notes on various topics covering CPT, PCC, IPCC & Final courses. I will be covering both theory and problems.
You are welcome to use this information to enhance your chances of success in your exams.
Your primary source of knowledge and information is the study material provided by the ICAI. The study material provided by the institute is of excellent professional quality.
I have adapted quite a lot from the study material. I have tried to present the information in a simple and easy to understand manner by using tables and charts wherever appropriate.
I would strongly suggest you to :
· First read these notes in my blog
· Then read your ICAI student material for the relevant subject
This, I believe will help you to achieve a professional level of understanding that you need.
This blog is open to all CA Students. It is entirely free of cost.
I request you to refer my blog to other CA Students.
If you wish to offer your comments and suggestions, please feel free to do so through my blog.
My email ID : muralisvax@gmail.com
My Cell No. 98450 52267
Best of Luck ! Be in touch !
Muralidhar. V
SVAX Coaching Classes
195, Second Floor
100 Feet Ring Road
Near Janatha Bazar
Banashankari 3rd Stage
Bangalore – 560 085
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