Savings of March -Income Tax liability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2010 For the AY 2010-11, the relevant previous year is 2009-10 i.e. the period commencing from April 1, 2009 and ending on March 31, 2010. I have a doubt - whether a govt. employee's savings (eligible for deductions u/s 80c etc.) invested in the month of March,2010 be taken into account for calculating taxable salary and tax liability for the PY 2009-10 in the AY 2010-11 or Savings upto February, 2010 only (and not that of March, 2010) be taken into account for the tax purpose. Please elaborate if there is any exception to calculation of taxes for salaried govt. employees in the light of my doubt as stated above.

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)
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10 April 2010 Investments in Govt.investments like PPF, NSC are eligible for deduction u/s.80C.

Amount invested for the period 01.04.09 to 31.03.10 will be allowed as deduction u/s.80C subject limit of Rs.1,00,000/- for A.Y.2001-11. However, these amount should be invested out of the income.

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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10 April 2010 agreed

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Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2010 Thank you Experts for your clarification. I understand that for investments of the period 1.4.09 to 31.3.10 will be allowed deduction subject to the limit of 1L for AY 2010-11. Here arises a doubt again. Government employees usually receive salary of March in the month of April. Do I have to take into account salary of March,2010 (which is received in April,2010) in the next PY i.e. 2010-11(AY 2011-12) for calculation of income tax? Please clarify.

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)
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11 April 2010 Yes. You have to consider in the finacial year 2009-10, even though u have received in April 10.