182 : Circular No. 182, dated 28-10-1975

FINANCIAL YEAR 1975-76

 Instructions for deduction of tax at source from salary during financial year 1975-76 at the rates specified in Part III of First Schedule to Finance Bill, 1975 and Finance (Amendment) Act, 1975

1. Attention is invited to para 2(3) of this Ministry’s Circular No. 161, dated 22-3-1975 [Clarification 1] on the above subject, which lays down that for the purpose of computing the total income of an employee, the amount credited to his ledger account in the Additional Wages Deposit Account or the Additional Dear­ness Allowance Deposit Account under the provisions of Additional Emoluments (Compulsory Deposit) Act, 1974 shall not be included in his total income of the previous year in which it is so cred­ited but so much of the amount as is repaid to him shall be liable to be included in his total income of the previous year in which it is repaid. Section 8(2) of the Additional Emoluments (Compulsory Deposit) Act, 1974 provides that for the purposes of computing, under the Income-tax Act, 1961, the total income of an employee, the amount repaid to him under this Act shall be deemed to be salary paid to him in arrears and the provisions of sub-section (1) of section 89 shall apply accordingly.

2. The amounts credited to the ledger account of an employee in the Additional Wages Deposit Account have become repayable after July 7, 1975 (i.e., after expiry of one year from the appointed day), under section 9(1)(a) of the Additional Emoluments (Compul­sory Deposit) Act, 1974. Therefore, on such repayments tax has to be deducted at source in accordance with the instructions con­tained in this Ministry’s Circular No. 161 [F. No. 275/12/75-ITJ], dated 22-3-1975 as amended by Circular No. 176 [F. No. 275/12/75-ITJ], dated 16-8-1975 [printed here as Clarifications 1 and 4].

Circular : No. 182 [F. No. 275/12/75-ITJ], dated 28-10-1975.