Are you expecting fee concession or scholarship for your children's education? Or wish to take a loan from Govt agencies? Or want to apply for a pension scheme? In all these and many more occasions, you may be asked submitting income certificate that issued by an authorized Govt official. Let's check what are the aspects lying on this important document; start from its definition what is Income Certificate, purpose, how to get it, who will issue, validity, application forms etc..
1. What is Income?
Income means regular earning or financial gain by a person who is working for an organization, labored or doing business. It includes but not limited to salary of an employee, various pensions, daily wage of a labourer, weekly wage of a labourer, profits from business, charges of consultancy, commissions of agency work and any kind of regular financial benefits received by a person. Other incomes mainly considered are employee bonuses, deposit interest, dividends from share and stock markets, property rent, gains on the sale of assets, and gifts and inheritances.
2. How To Calculate Income?
Income shall be calculated in two ways - individual income and / or family income.
When we calculate individual income or family income, there will be concerns of which are the incomes to be in the income list? Which are the incomes not to be or exempted to the list? Here we'll find which are the incomes to be considered or not to be considered to the list of income and how we'll reach final income of a person or a family.
Following are the details of how income will be calculated to an individual and as a family:
2.1 Calculating What is Individual Income
- Income from Salary: Basic pay, Special pay, Dearness allowance (DA), Deputation pay, Other allowances if any are to be considered as income. Exclusions are House Rent Allowance (HRA), Traveling Allowance (TA), and Honorarium received for special work.
- Income from Business / Profession: Business income mainly calculated on the basis of Income Tax Return Filing. If person is non-assessee, income will be considered on the declaration of the assessee.
- Income from Pension: Pension Payment Order is the main criteria to calculate income from pension. It excludes commutation amount.
- Income from Daily Wages / Labour: Declaration from the daily laborer to be considered for calculating Daily wage income.
- Income from Property Produces: Declaration and proof of produce sale to be considered for Property Produce Income.
- Income from Property Transaction: Amount in the Sale deed or acquisition transaction document to be considered as income.
- Income from Rented Property / Building: Income will be after deducting annual maintenance charges.
- Income from Expatriate Employee: Basis on the declaration submitted.
- Other income sources: Income form share trading, deposit interest, interest from bonds etc.
2.2 Calculating What is Family Income
There are mainly four factors to consider when calculating family income. They are:
- Who are the family members earning income? Family members earning income include, Parents or Guardian, Spouse, Unmarried daughters and unmarried brothers / sisters.
- How members included to the income list: Family income should be calculated by means of regular income that earned by each individual members residing together as a family.
- How members excluded to the income list: Income from widow daughter / sister is excludes when calculating what is family income.
- How allowance given to more member family: An allowance shall be considered in the case of more members family ie., more than five members.
Calculate individual income as given in the section above "Calculating What is Individual Income" for each of the family members. Consider exclusions and allowance to the total income. The formula for finding family income shall be as given below:
Family Income = Add total of individual income of all members - Total income of all excluded member(s) - Allowance given per person in more member family.
3. What is Income Certificate?
Income Certificate is a documentary proof declaring a person's or a family's annual income from all sources including salary, daily wages, pension, business, produces from property, rent, and remittances from expatriate member. It's an official document and proof of income of a person or family, issued by a Govt. authority. Income Certificate will be issued by the officer after verifying the application, affidavit and other supporting documents submitted by the applicant. Income Certificate is an essential document for those who expects any financial assistance through Govt. schemes or seat reservation in education programs.
3.1 Income Certificate Issuing Officers in India
- District Collector
- Deputy Collector
- Asst. Collector
- District Magistrate
- Sub-Divisional Magistrate
- Naib Tahsildar
- Prant Officer
- Block Development Officers
- Zonal Deputy Tahsildar
- Revenue Circle Officer
- Village Officer
4. Purposes and Uses of Income Certificate
Income Certificate is an official document that accepts as a proof of income of a Person or Family, hence the people who fall under poverty line (BPL) would use it vastly. Producing income certificate benefits tax relaxation if one purchases a property or avail any other service benefits offered by Govt. schemes. Income certificate can also be used by students for obtaining scholarships / fees concessions for their higher studies or at the time of school / college admission.
Following are the possible Purposes of Income Certificate to be used as a proof of income with various requirements:
- Financial support in Educational programs - Waiving or concession of fees.
- Seat Reservation in Educational Programs - Preference in college admissions for Socially and Economically backward classes.
- Availing various Loans from Govt. Institutions
- For applying various pension schemes - Old age pension, widow pension, agricultural laborer pension, TB / Leprosy / cancer patient pension
- Ex-service men financial aid
- Avail SC / ST Loan from various Govt. schemes
- Relief to the victims of natural calamities - Tsunami, earth quake, landslide, flood, cyclone, drought, etc.
- Aid to physically handicapped persons - artificial limb, cycle, hearing aid, etc.
- Free ration
- For getting benefit of various social benefit schemes declared by the Govt. from time to time.
5. How to Get Income Certificate?
Income certificate can be obtained by submitting a request to Govt appointed authority that varies from state to state. Many of the Indian States adopt the Tehsildar to be the authority to issue Income Certificate while some other States adopt District Magistrate or District Collector or Village officer or else appointed by the Govt.
Following are the complete list of Authority In Various States / Union Territories issuing Income Certificate:
5.1 Income Certificate Issuing Authority In Various Indian States
- Andhra Pradesh: Tahsildar
- Arunachal Pradesh: District Magistrate & Collector
- Assam: Revenue Circle Officers
- Bihar: Circle Officer of Circle Office
- Chattisgarh: Naib Tahsildar
- Goa: Mamlatdar of all Talukas
- Gujarat: District Collector / Deputy Collector / Asst. Collector / Prant Officer / Mamlatdar
- Haryana: CRO (Tehsildar / Naib Tehsildar concerned)
- Himachal Pradesh: Tahsildar of Revenue Department
- Jammu & Kashmir: Sub-Divisional Magistrate (not below the rank of Tehsildar)
- Jharkhand: Sub-Divisional Officer in each District
- Karnataka: Tahsildar
- Kerala: Village Officer (if produced before the State Govt. Departments or authorities) / Tahsildar (if produced before the Central Govt. Departments or authorities)
- Madhya Pradesh: Tahsildars / Naib Tahsildars
- Maharashtra: Tahsildar
- Manipur: District Authorities i/c DC / ADC / SDO (not below the rank of SDO / SDM)
- Meghalaya: Employer in case of Govt. employee and by the MP / MLA / DC / SDO Civil in case of others.
- Mizoram: District Magistrate or any other Officer authorized by District Magistrate
- Nagaland: Dy. Commissioners, Addl. Dy. Commissioners and Sub-Divisional Officers (C)
- Odisha: Revenue Officers
- Punjab: CRO (Tehsildar / Naib Tehsildar concerned)
- Rajasthan: Tahsildar / Notary
- Sikkim: Special Executive Magistrate (Block Development Officers, Rural Management & Development Deptt.)
- Tamil Nadu: Zonal Deputy Tahsildar
- Tripura: Deputy Commissioner of respective Districts
- Telengana: Tahsildar
- Uttar Pradesh: Tahsildar
- Uttaranchal: Tahsildar / SDM / City Magistrate
- West Bengal District Level: Dist. Magistrate or Addl. Dist. Magistrate
- West Bengal Sub-Divisional Level: Sub-Divisional Officer of the concerned
- West Bengal Block Level: Block Development Officer of the concerned Blocks
- West Bengal Kolkata Municipal Corpn.: The Collector, Kolkata
- West Bengal Students residing within civil Jurisdiction of Hon’ble High Court, Kolkata: The Collector, Kolkata
- West Bengal Other areas covered in Kolkata Police are concerned, i.e., areas over which Collector, Kolkata does not exercise jurisdiction: Concerned District Magistrate or any other Officer authorized by the District Magistrate of the respective Districts, i.e., South 24 Paraganas and North 24 Paraganas.
5.2 Income Certificate Issuing Authority In Various Union Territories of India
- Andaman & Nicobar: Tahsildar
- Daman, Diu, Dadra, and Nagar Haveli: Mamlatdar
- Chandigarh: Sub Divisional Magistrates
- Delhi: Sub-Divisional Magistrate (SDM) of Govt. of NCT of Delhi
- Lakshadweep: Deputy Collectors in Agatti and Minicoy and SDO in the remaining Islands
- Pondicherry: Tahsildar, Deputy Tahsildar
6. Income Certificate Application Form
One who wish to get Income Certificate for a particular purpose, first of all, check whether the required purpose information / prospectus has given any format of it. For example, most of the admission prospectus of educational programs would have standard format for applying Income Certificate. If there is no specific instructions, you can use printed form which is available near to your concerned Authority office listed above or download it from concerned websites. Besides, many States have implemented eDistrict online facilities that make hassle free submission of various services including Income Certificate request. Before you apply for an income certificate, consider what are the supporting documents to be submitted along with your application:
6.1 Documents Required for Income Certificate - Mandatory
- Income Proof: Salary Certificate / Statement (for Govt. employee) OR IT Return / Form 16 (Non-Government Employee) OR IT Return / Affidavit (for Self employed / Business personal)
- ID Proof: Election Photo ID card / Aadhaar Card / Driving License / Passport / Ration card with Photograph / Photo identity card issued by the Central Government or a State Government or a Public Sector Undertaking / Pensioner Card having photograph of the applicants / any authorized document that considered to be ID proof by Central Govt. or concerned state govt.
- Address Proof: Self attested copy of Aadhaar letter / Voter's ID Card / Passport Ration Card / LPG card / Driver's License or any authorized document that considered to be address proof by Central Govt. or concerned state govt.
6.2 Documents Required for Income Certificate - Optional
- Date of Birth
- Land Tax receipt
- Documentary evidence for purpose
7. Structure and Important Sections of Income Certificate Application Form
In a standard income certificate application format, the structure and information shall be as follows:
- Basic data section - It includes basic personal details, certificate purpose, asset details, various income sources, and total annual income.
- Self Declaration section.
- Supporting Documents as Attachment (as stated in the application form): Income proof, ID proof, Address proof, Date of birth, Land Tax Receipt, Photo, Documentary evidence for purpose.
Image below shows how to reach total annual income to a family from various sources of each individual family members:
Image below shows Declaration for Income Certificate Application
Image below shows Affidavit for Income Certificate to be attached along with Income Certificate Application.
8. Validity of Income Certificate
In-general, the validity of income certificate shall be for a period of one year from the date of issue. Some states and administrative divisions give different validity periods for their Income certificates varying from 3 months to 4 years.
9. Download Income Certificate Application Forms / Templates Used In Various Indian States
- General / Common Application Form / Template for applying Income Certificate (PDF)
- General / Common Application Form / Template for applying Income Certificate (docx)