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What is Direct payment? What is Salary? Section 191 and 192 of Income Tax Act 1961

Direct payment and Salary are defined under section 191 and 192 of Income Tax Act 1961. Provisions under these Sections are :

Section 191 of Income Tax Act "Direct payment"

Section 191. In the case of income in respect of which provision is not made under this Chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct.
Explanation.-For the removal of doubts, it is hereby declared that if any person including the principal officer of a company,-

(a) who is required to deduct any sum in accordance with the provisions of this Act; or
(b) referred to in sub-section (1A) of section 192, being an employer,
does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act, and where the assessee has also failed to pay such tax directly, then, such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-section (1) of section 201, in respect of such tax.

 

Section 192 of Income Tax Act "Salary"

Section 192. (1) Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.

(1A) Without prejudice to the provisions contained in sub-section (1), the person responsible for paying any income in the nature of a perquisite which is not provided for by way of monetary payment, referred to in clause (2) of section 17, may pay, at his option, tax on the whole or part of such income without making any deduction therefrom at the time when such tax was otherwise deductible under the provisions of sub-section (1).

(1B) For the purpose of paying tax under sub-section (1A), tax shall be determined at the average of income-tax computed on the basis of the rates in force for the financial year, on the income chargeable under the head "Salaries" including the income referred to in sub-section (1A), and the tax so payable shall be construed as if it were, a tax deductible at source, from the income under the head "Salaries" as per the provisions of sub-section (1), and shall be subject to the provisions of this Chapter.

(2) Where, during the financial year, an assessee is employed simultaneously under more than one employer, or where he has held successively employment under more than one employer, he may furnish to the person responsible for making the payment referred to in sub-section (1) (being one of the said employers as the assessee may, having regard to the circumstances of his case, choose), such details of the income under the head "Salaries" due or received by him from the other employer or employers, the tax deducted at source therefrom and such other particulars, in such form and verified in such manner as may be prescribed41, and thereupon the person responsible for making the payment referred to above shall take into account the details so furnished for the purposes of making the deduction under sub-section (1).

[(2A) Where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1), such particulars, in such form and verified in such manner as may be prescribed, and thereupon the person responsible as aforesaid shall compute the relief on the basis of such particulars and take it into account in making the deduction under sub-section (1).]

Explanation.-For the purposes of this sub-section, "University" means a University established or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a University for the purposes of that Act.

(2B) Where an assessee who receives any income chargeable under the head "Salaries" has, in addition, any income chargeable under any other head of income (not being a loss under any such head other than the loss under the head "Income from house property") for the same financial year, he may send to the person responsible for making the payment referred to in sub-section (1) the particulars of-

(a) such other income and of any tax deducted thereon under any other provision of this Chapter;
(b) the loss, if any, under the head "Income from house property",
in such form and verified in such manner as may be prescribed43, and thereupon the person responsible as aforesaid shall take-
(i) such other income and tax, if any, deducted thereon; and
(ii) the loss, if any, under the head "Income from house property",
also into account for the purposes of making the deduction under sub- section (1) :

Provided that this sub-section shall not in any case have the effect of reducing the tax deductible except where the loss under the head "Income from house property" has been taken into account, from income under the head "Salaries" below the amount that would be so deductible if the other income and the tax deducted thereon had not been taken into account.

(2C) A person responsible for paying any income chargeable under the head "Salaries" shall furnish to the person to whom such payment is made a statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in such form and manner as may be prescribed.

[(2D) The person responsible for making the payment referred to in sub-section (1) shall, for the purposes of estimating income of the assessee or computing tax deductible under sub-section (1), obtain from the assessee the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed.]

(3) The person responsible for making the payment referred to in sub-section (1) or sub-section (1A) or sub-section (2) or sub-section (2A) or sub-section (2B) may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year.

(4) The trustees of a recognised provident fund, or any person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall, in cases where sub-rule (1) of rule 9 of Part A of the Fourth Schedule applies, at the time an accumulated balance due to an employee is paid, make therefrom the deduction provided in rule 10 of Part A of the Fourth Schedule.

46(5) Where any contribution made by an employer, including interest on such contributions, if any, in an approved superannuation fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the fund to the extent provided in rule 6 of Part B of the Fourth Schedule.

(6) For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the prescribed47 rate of exchange.

   
 

Income Tax Act 1961

What is Consideration for know-how? What is Assessment as a firm? Section 180A and 184 of Income Tax Act 1961

What is the procedure of Assessment when section 184 not complied with? What is change in constitution of a firm? What is succession of one firm by another firm? Section 185, 187 and 188 of Income Tax Act 1961

What is Joint and several liability of partners for tax payable by firm? Firm dissolved or business discontinued? Section 188A and 189 of Income Tax Act 1961

What are the Provisions applicable to past assessments of firms? What is tax Deduction at source and advance payment? Section 189A and 190 of Income Tax Act 1961

What is Direct payment? What is Salary? Section 191 and 192 of Income Tax Act 1961

What is Payment of accumulated balance due to an employee? What is Interest on securities? Section 192A and 193 of Income Tax Act 1961

What are Dividends? Section 194 of Income Tax Act 1961

What is Rent? Section 194 I of Income Tax Act 1961

What is Interest other than Interest on securities? Section 194A of Income Tax Act 1961

What is Winnings from lottery or crossword puzzle? What is Winnings from horse race? Section 194B and 194BB of Income Tax Act 1961

What is Payments to contractors? Section 194C of Income Tax Act 1961

What is Insurance commission? What is Payment in respect of life insurance policy? Section 194D and 194 DA of Income Tax Act 1961

What is Payments to non-resident sportsmen or sports associations? What is Payments in respect of deposits under National Savings Scheme? Section 194E and 194EE of Income Tax Act 1961

What is Payments on account of repurchase of units by Mutual Fund or Unit Trust of India? What is Commission, etc., on the sale of lottery tickets? Section 194F and 194G of Income Tax Act 1961

What is Commission or brokerage? What is Payment on transfer of certain immovable property other than agricultural land? Section 194H and 194IA of Income Tax Act 1961

 

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