CIRCULAR NO : 20/2015
F.No.
275/192/2015-IT(B)
Government
of India
Ministry
of Finance
Department
of Revenue
Central
Board of Direct Taxes
North
Block, New Delhi
Dated the 2nd December, 2015
SUBJECT:
INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2015-16 UNDER
SECTION 192 OF THE INCOME-TAX ACT, 1961.
*****
Reference is
invited to Circular No.17/2014 dated 10.12.2014 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 2014-15, 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 2015-16 and explains
certain related provisions of 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.
Download and Prepare at a time 50 employees Form 16 Part-B for F.Y.2015-16 [This Excel Utility have all the amended section of Income Tax as per Finance Budget 20145-16]
5.5.3 Deduction in respect
of contribution to pension scheme of Central Government (Section 80CCD):
Section 80CCD(1) allows an
employee, being an individual employed by the Central Government on or after
01.01.2004 or being an individual employed by any other employer, or any other assessee being an individual, a deduction of an
amount paid or deposited out of his income chargeable to tax under a pension
scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated
22.12.2003 National Pension System-NPS or as may be notified by the Central
Government. However, the deduction shall not exceed an amount equal to 10% of
his salary (includes Dearness Allowance but excludes all other allowance and
perquisites).
As per section
80CCD(1B), an assessee referred to in 80CCD(1) shall be allowed an deduction in
computation of his income, of the whole of the amount paid or deposited in the
previous year in his account under the pension scheme notified or as may be
notified by the Central Government, which shall not exceed Rs. 50,000. The
deduction of Rs. 50,000 shall be allowed whether or not any deduction is
allowed under sub-section(1). However, the same amount cannot be claimed both
under sub-section (1) and sub-section (1B) of section 80CCD.
As per Section
80CCD(2), where any contribution in the said pension scheme is made by the
Central Government or any other employer then the employee shall be allowed a
deduction from his total income of the whole amount contributed by the Central
Government or any other employer subject to limit of 10% of his salary of the
previous year.
If any amount
is standing to the credit of the employee in the pension scheme referred above
and deduction has been allowed as stated above, and the employee or his nominee
receives this amount together with the amount accrued thereon, due to the
reason of
(i) Closure or opting out of the pension scheme or
(ii) Pension
received from the annuity plan purchased and taken on such closure or opting
out
then the
amount so received during the FYs shall be the income of the employee or his
nominee for that Financial Year and accordingly will be charged to tax.
Download & Prepare One by One Income Tax Form 16 Part A&B and Part B for Financial Year 2015-16 [ This Excel Utility have all the details of Income Tax amended Section as per the Finance Budget 2015]
Where any
amount paid or deposited by the employee has been taken into account for the
purposes of this section, a deduction with reference to such amount shall not
be allowed under section 80C.
Further it has
been specified that w.e.f 01.04.09 any amount received by the employee from the
New Pension Scheme shall be deemed not to have been received in the previous year
if such amount is used for purchasing an annuity plan in the same previous
year.
It is emphasized that as per
the section 80CCE the aggregate amount of deduction under sections 80C,
80CCC and Section 80CCD(1) shall not exceed Rs.1,50,000/-. The deduction
allowed under section 80 CCD(1B) is an additional deduction in respect of any
amount paid in the NPS upto Rs. 50,000/-. However, the contribution made by the
Central Government or any other employer to a pension scheme u/s 80CCD(2) shall
be excluded from the limit of Rs.1,50,000/- provided under this section.
