Tax Deduction, 
tax liability, 
Tax Benefits
Tax Deduction, tax liability, Tax Benefits

Deduction Of Tax At Source Doesn’t Necessarily Imply Discharge Of Actual Tax Liability

You may have to pay additional tax if your total tax liability exceeds the amount of tax deducted at source. Maximum amount of gratuity and leave encashment are limited to Rs 20 lakh and Rs 25 lakh respectively. Tax benefits on home loan available to HUFs also.

I have commission income in addition to my regular salary. My salary is around Rs 12 lakh and the commission income comes to around Rs 2 lakh. Tax has already been deducted both on my salary and commission. Do I still have to pay any extra tax now?


You have to pay tax on all the income received from all the sources, be it salary or commission. Deduction of tax at source (TDS) and discharge of actual tax liability are two different things. Just because tax has been deducted from the income paid to you does not mean that you have fully discharged your tax liability on your income.

One reason for this could be that the rate at which tax is deducted may be different from the slab rate at which your total income is taxed. The tax liability on your income would depend on the tax on total taxable income including the commission received as reduced by the amount of TDS on salary and commission.

In case the net tax liability exceeds Rs. 10,000 in a year, you need to discharge the tax liability by way of advance tax in four installments, i.e., on June 15, September 15, December 15, and March 15. In case you fail to pay the advance tax by the due date, you can still pay the tax by March 31 along with interest.


My mother retired from Life Insurance Corporation (LIC) of India in December 2023 and has received her Provident Fund (PF), gratuity and leave encashment. Are these taxable?


The amount received in respect of accumulated balance in PF is fully exempt without any limit. The gratuity is, likewise, exempt to the extent of and calculated as half month’s salary for each completed years of service. However, the maximum amount of gratuity which can be claimed exempt cannot exceed Rs. 20 lakh received from one employer or more during the whole tenure of the service.

Leave encashment is exempt equal to 10 month’s salary based on last 10 month’s average salary subject to maximum of Rs. 25 lakh received from one or more employers taken together during the whole tenure of working life.


Are the tax benefits in respect of home loan are available to a Hindu Undivided Family (HUF) under the Income-tax Act, 1961?


Two benefits are available for home loans under the income tax laws.

The first is under Section 80C for repayment of home loan taken from specified institutions, such as bank, housing finance company, local body, public company, i.e., your employer etc. This benefit is available only to an Individual and an HUF for a residential house property and that too after construction is completed and possession is taken. This is available within the overall limit of Rs 1.50 lakh along with other things, such as Employees’ Provident Fund (EPF), Public Provident Fund (PPF), life insurance premiums (LIPs), equity-linked savings schemes (ELSS), school fees, and so on.

The second benefit which is available to every taxpayer, including an HUF, is for the interest paid on money borrowed from any person, including your friends and relative for purchase, repair, construction etc. of any property, and not necessarily a residential house property. The amount of deduction would vary depending on whether the house is self-occupied or let out as well, as the tax regime selected by you.

The author is a tax and investment expert

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)

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