Circular No. 176

Financial Year 1975-76

What this is

Circular No. 176 was issued by the Central Board of Direct Taxes on 16 August 1975. Its subject is Financial Year 1975-76.

This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.

What it does

Revises the salary deduction rates for the financial year 1975-76 after the Finance (Amendment) Act, 1975, assented on 31 July 1975, replaced Paragraph A of Part III of the First Schedule to the Finance Act, 1975. Under the new schedule the first slab of income up to Rs. 8,000, previously Rs. 6,000, is charged at nil, the new slab from Rs. 8,001 to Rs. 15,000 is charged at seventeen per cent, and the rates on income above Rs. 15,000 are unchanged. Deduction for the year is to follow the new schedule, and because the exemption limit has been raised no tax is deductible unless the employee's estimated salary income for the year is likely to exceed Rs. 8,000. It reminds employers that section 192(3) permits the deduction to be reduced or increased to adjust an excess or deficiency arising out of an earlier deduction or a failure to deduct during the same financial year, and it annexes the new Sub-Paragraph I and three worked examples.

Why it was issued

The rates circulated earlier by circular No. 161 dated 22 March 1975, taken from the Finance Bill, 1975, were superseded by the new schedule enacted by the Finance (Amendment) Act, 1975.

Who it reaches

Employers who had already deducted for part of the financial year 1975-76 on the old rates
Employees with salary between Rs. 6,000 and Rs. 8,000, who go out of deduction altogether
Employees in the new Rs. 8,001 to Rs. 15,000 slab

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.192	s.392, s.402

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

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 paragraph 1 of Circular No. 161, dated 22-3-1975 [Clarification 1] enclosing an extract of Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the Finance Bill, 1975 giving the rates for deduction of income-tax from salaries during the financial year 1975-76.
2. The Finance (Amendment) Act, 1975, which received the assent of the President on July 31, 1975, has, inter alia, replaced Paragraph A of Part III of the First Schedule to the Finance Act, 1975. Under the new rate schedule, the rate of income-tax on the first slab of income up to Rs. 8,000 (as against Rs. 6,000 previously) has been fixed at nil and the rate on the new slab of Rs. 8,001—15,000 at 17 per cent. The rates of tax on the slabs of income beyond Rs. 15,000 remain unchanged. An extract of the new Sub-Paragraph I of Paragraph A of Part III of the First Schedule is enclosed as Annex I.
3. It is requested that deduction of income-tax may be made during the financial year 1975-76 according to the rates in the new schedule. In this connection, it may be noted that it is permissible under section 192(3) to reduce (or increase) the amount of tax to be deducted at source for the purpose of adjusting any excess (or deficiency) arising out of any previous deduction (or failure to deduct it) during the financial year.
4. Three typical examples of calculations on the basis of the new provisions are given for guidance in Annex II.
5. It may please be noted that with the raising of the exemption limit from Rs. 6,000 to Rs. 8,000, no tax is deductible at source unless the estimated salary income of a person during the financial year 1975-76 is likely to exceed Rs. 8,000.
Circular : No. 176 [F. No. 275/12/75-ITJ], dated 16-8-1975.

What to watch

The adjustment for over-deduction already made in the year is done under section 192(3), within the same financial year.
The rates and the Rs. 8,000 limit speak only for the financial year 1975-76.
It supersedes the rates in circular No. 161 dated 22 March 1975, which should not be applied for the year.
The rates above Rs. 15,000 were left untouched, so only the lower slabs changed.

Where you meet it

Only in an old salary deduction matter for the financial year 1975-76 where deduction on the pre-amendment rates was in issue.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 02 /2023 — Procedure format and standards for filling an application for grant of certificate under sub rule 4 and its proviso of r 27 September 2023
Circular No. 4/2023 — Clarification regarding deduction of TDS under section 192 read with sub-section (1A) of section 115BAC of the Income-ta 5 April 2023
Circular No. 24/2022 — Government of INDIA 7 December 2022
Circular No. 10/2022 — Circular regarding use of functionality under section 206AB and 206CCA of the income tax act 1961 17 May 2022
Circular No. 4/2022 — Government of INDiA 15 March 2022
Circular No. 11/2021 — Circular regarding use of functionality under Section 206AB and 206CCA of the Income-tax Act, 1961 21 June 2021

← Circular No. 177 · Circular No. 175 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.