07 February 2012
A COMPANY IS PAYING TO ITS EMPLOYEE RS. 20000 P.M. TOWARDS RENTAL FOR SELF LEASED RESIDENTIAL ACCOMMODATION AND DEDUCTING TDS @10 EVERY MONTH. HENCE, TOTAL TDS RECOVERED FOR THE YEAR IS RS. 24000. HOWEVER, THE INCOME FROM HOUSE PROPERTY IS ONLY RS. 5000. CAN THE EMPLOYER ADJUST THIS TDS AMOUNT AGAINST TAX LIABILITY ON SALARY INCOME? IF YES, PLEASE PROVIDE THE REFERENCE.
07 February 2012
Dear friend, the amount paid by company for providing free rental accomodation to its employees is perk u/s. 17 and same will be added to the salary of the employess. The TDS paid by employer on leased accomodation will also be included in your salary.
08 February 2012
Dear Deepak ji, Excuse me, my query is different. My query is- The Company is paying lease rental to its employees after recovering TDS of 10% on the same. Can this TDS be adjusted with tax liability on Salary Income?
08 February 2012
As per your query, the same income need to be added in to employee`s house property income and need to be calculated Gross total income and taxed accordingly and deduct TDS on the same
But view of Mr. Deepak also is valid, because what ever payment made by the employer to employee under employment is treated as Salary income only. Please check these points for avoiding violating of the provisions and questionable by the A.O at the time of assessment
09 February 2012
An employee other than salary , any other income he/she getting the same will be included in gross total income and need to allow applicable deductions and calculate total tax liability, against this total tax liability can be adjusted tax deduction against all incomes
10 February 2012
extract of above circular is as follows according to which tds can be adjusted in case of loss from house property and other income but total tax payable should not be lesser than tax on salary : Such income should not be a loss under any such head other than the loss under the head "Income from House Property" for the same financial year. The person responsible for making payment (DDO) shall take such other income and tax deducted at source, if any, on such income and the loss, if any, under the head "Income from House Property" into account for the purpose of computing tax deductible in terms of section 192(2B) of the Income-tax Act. However, 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'. In other words, the DDO can take into account any loss (negative income) only under the head “income from House Property” and no other head for working out the amount of total tax to be deducted.` While taking into account the loss from House Property, the DDO shall ensure that the assessee files the declaration referred to above and encloses therewith a computation of such loss from House Property.
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