TDS on Salaries - Income Tax Department

CHAPTER-4
INCOME OTHER THAN
‘SALARIES’
4.1 Introduction: An employee may be in receipt of other
income chargeable to tax such as interest income, capital gains,
income from house property, etc. In such a case, Sub-Section 2B
of Section 192 enables the employee to furnish particulars of such
income and any <strong>TDS</strong> thereon to the employer/drawing & disbursing
officer. The particulars of loss may be furnished in a simple statement
which is properly verified by the tax payer in the same manner as
in form 12C (as per rule 26B).
The particulars of income furnished should not be loss under
any such head, other than loss under the head “Income from House
Property”, for the same Financial year. The person responsible for
making payments shall take such income and the loss, if any, under
the head income from house property into account for the purpose
of computing tax deductible u/s 192. It is further provided that except
in a case where loss under the head income from house property
has been taken into account, this sub-section shall not in any other
case have the effect of reducing the tax deductible from income
under the head salaries below the amount which would have been
deductible if the other income and tax deductible thereon had not
been taken into account.
4.2 Loss from House Property
The D.D.O. can take into account any loss from a house
property only for working out the amount of total tax to be
deducted. While taking into account this loss the D.D.O. shall ensure
that the assessee files a declaration and encloses there with the
computation of such loss.
4.3 Computation of loss from House Property
A loss is determinable under the head ‘house property’ only in
a case where such loss is arising on account of payment of interest
on borrowed capital, which has been used for acquiring, constructing,
repairing or renewing or reconstructing the house property. In case
of a let out property the entire amount of such interest is allowable
as a deduction from the annual value of house property. However,
in the case of a self occupied property or a property unoccupied by
owner for reasons of employment, business/profession at another
place, such deduction is limited to Rs.30,000/-. Where the property,
however, has been acquired or constructed with capital borrowed,
on or after the 1st day of April, 1999 and such acquisition or
construction is completed before the 1st day of April, 2003, then
the amount of deduction allowable is upto Rs. one lakh fifty thousand.
The Finance Act, 2002 has provided that w.e.f. 01.04.2003, this
higher deduction of Rs.1,50,000/- on account of interest will be
available if such loan has been taken after 01.04.1999 and the
construction or acquisition of the residential unit of such loan has
been completed within 3 years from the end of the Financial year in
which capital was borrowed. Now the assessee is also required to
furnish a certificate from the person to whom such interest is
payable, specifying the amount of interest payable for the purpose
of such acquisition or construction of property, or conversion of
whole or any part of the capital borrowed which remains to be
repaid as a new loan.
Further, the interest on borrowed capital corresponding to
the period prior to the previous year in which property has been
acquired or constructed is also allowed as deduction in five equal
installments, in the year of completion and four immediately
succeeding years.
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