Circular No. 266

Instructions for deduction of tax at source from salary during financial year 1980-81 at the rates specified in Part III of First Schedule to Finance (No. 2) Act, 1980

What this is

Circular No. 266 was issued by the Central Board of Direct Taxes on 24 April 1980. Its subject is Instructions for deduction of tax at source from salary during financial year 1980-81 at the rates specified in Part III of First Schedule to Finance (No. 2) Act, 1980.

What it does

Tells disbursing officers that nothing has changed for the year. Finance Act, 1980 prescribes the same rates for deduction from salaries during financial year 1980-81 as were in force in financial year 1979-80, so tax at source may continue to be deducted at the rates in Part III of the First Schedule to the Finance Act, 1979, as intimated by Circular No. 252 dated 26 April 1979 and 10 May 1979.

Why it was issued

The annual instruction to employers for the coming financial year, recording that the rates were carried over unchanged.

Who it reaches

Employers and disbursing officers deducting from salaries in financial year 1980-81
Salaried employees whose monthly deduction is worked out on those rates
Assessing Officers in TDS charges for that year

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.

Instructions for deduction of tax at source from salary during financial year 1980-81 at the rates specified in Part III of First Schedule to Finance (No. 2) Act, 1980

1. I am directed to invite a reference to this Ministry’s (Department of Revenue) Circular No. 252 [F. No. 275/16/79/-IT(B], dated 26-4-1979/10-5-1979 on the subject of deduction of income-tax from salaries paid during the year 1979-80.
2. The Finance Act, 1980 prescribes the same rates for deduction of tax from "salaries" during the financial year 1980-81 as were in force during the financial year 1979-80. Hence, tax at source from salaries may continue to be deducted at the same rates as are given in Part III of the First Schedule to the Finance Act,1979.
Circular : No. 266 [F. No. 275/12/80-IT(B)], dated 24-4-1980.

What to watch

The rates speak only for financial year 1980-81, and are those of the earlier year carried over.
The rates themselves are not reproduced here; they are in Part III of the First Schedule to the Finance Act, 1979 and in Circular No. 252.
The subject line refers to the Finance (No. 2) Act, 1980 while the operative paragraph speaks of the Finance Act, 1980; the substance is that the earlier year's rates continue.
Nothing else about the section 192 computation is dealt with in this short circular.

Where you meet it

In an old salary deduction record for financial year 1980-81 where the rate applied is in question.

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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.