Some useful points 2018-2019 Fy

The CBDT has issued circular No. 1 on 01.01.2019 in respect of the Deduction of tax at Source from Salaries u/s 192 of the Income Tax Act, 1961. Some of the major / important points to remember are;

1. Standard Deduction u/s 16(ia).

Standard deduction of Rs.40,000/- has been introduced u/s 16(ia) in lieu of the the following

Conveyance Allowance – u/s 10(14) r.w.r 2BB and

Reimbursement of Medical Expenses – Rs.15,000/- – clause (v) to the 1st provisio of sub-section 2 to section 17.

Note: Up to AY 2018-19, reimbursement of medical expenses up to Rs.15,000/- was not included in ‘Salary’ at all, since the same is not a perk as per section 17(2).  Now the same needs to be included in ‘Salary’.

. DDOs Shall obtain documents – section 192(2D) r.w.r.26C: DDOs shall obtain from the assessee evidence or proof or particular of claims such as House rent Allowance (where aggregate annual rent exceeds one lakh rupees); Leave Travel Concession or Assistance etc , Deduction of interest under the head ‘Income from house property’ and deduction under Chapter VI-A as per the prescribed form 12BB laid down by Rule 26C of the Rules.

9. DDOs cannot consider any deduction u/s 80G, even if it is paid through the employer. Employees have to claim the same by themselves while filing the return of income. Section 80G provides for deductions on account of donation made to various funds , 

charitable organizations etc. In cases where employees make donations to the Prime 

Minister‘s National Relief Fund, the Chief Minister‘s Relief Fund or the Lieutenant 

Governor‘s Relief Fund through their respective employers, it is not possible for such funds 

to issue separate certificate to every such employee in respect of donations made to such 

funds as contributions made to these funds are in the form of a consolidated cheque. An 

employee who makes donations towards these funds is eligible to claim deduction under 

section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated 

above will be admissible under section 80G on the basis of the certificate issued by the 

Drawing and Disbursing Officer (DDO)/Employer in this behalf - Circular No. 2/2005, 

dated 12-1-2005.

 

No deduction under this section is allowable in case the amount of donation exceeds Rs 

2000/- unless the amount is paid by any mode other than cash.