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TDS on Salary – Circular for FY 2018-19

The Income Tax Department has issued the “TDS on Salary” circular for FY 2018-19. You can take a look at it here or here.

Please ensure that all tasks (income tax deduction, investment proof scrutiny, etc.) related to salary TDS compliance in your organization for FY 2018-19 are carried out as per the circular.

Para 4.6.4.3 in the circular

The due date for issuance of Form No. 16 is 31-May as per the circular. Given that the last day for filing Form 24Q for the fourth quarter is 31-May, the Income Tax Department notified 15-June as the deadline for Form 16 issuance last year. We request the Income Tax Department to notify 15-June as the deadline for Form 16 issuance for FY 2018-19 too.

Para 5.3.2 in the circular – Death-cum-retirement gratuity or any other gratuity

This para incorrectly states that the tax exemption limit for gratuity payment to an employee is Rs 10 lakh.

Para 5.3.2 states:

Presently the limit is Rs. 10 lakhs w.e.f. 24.05.2010 [Notification no. 43/2010 S.O. 1414(E) F.No. 200/33/2009-ITA-1 dated 11th June 2010]..

The exemption limit for gratuity as on the date of this circular is Rs 20 lakh and not Rs 10 lakh.

Para 5.5.5 in the circular – Section 80D

Section 80D has been modified to allow tax benefit on medical expenditure incurred on senior citizens (employee or employee’s parents who are 60 years or more in age) in FY 2018-19, subject to certain conditions. In FY 2017-18, the tax benefit on medical expenditure was restricted to very senior citizens (80 or more in age).

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4 Comments

  1. IQBAL SINGH February 21, 2019

    Whether Uniform allowance to Nurses is exempted ?
    Plz clarify

    reply
  2. VENU SUDARTHI March 16, 2019

    Total Consolidate honorarium treating as basic wages for EPF applicability- – No basic pay for the NACO contract employees

    Consolidated pay revised as sum of Rs.13000.00 for month
    and annual rise of Rs.1250/- was awarded with seniority/ service experience with a maximum pay (up to 3 annual increments) is Rs.16750.00 (Rs.13000.00 + Rs.1250.00 x3= Rs.16750.00) From 1 st April 2015, NACO employees are considered under EPF coverage.

    But under present scenario of no basic pay, split of salary mentioned for the NACO contract employees. How to fixation as basic wages all salary? The contribution of employee has been deducted from January 2017.But the employee giving their services from 2002 to 2015 onwards, are deprived from the benefit, only benefited 350 hundred employees only. More than 90% employees will lose benefit of EPF act if the basic pay is including total salary Rs.16750/-Basic wages 13000/- + with 3 (1250+1250+1250+1250+= Rs.16750/-) annual raise based on experience.

    reply
    • gautham March 21, 2019

      Once an employee comes under PF, they cannot get out of PF (until the end of their employment) even if the salary goes above Rs 15,000 per month. Such employees should continue to remain under PF.

      reply

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