Dear Seniors,
I am confused regarding tax calculation for employees. Please help me understand how to calculate TDS on an employee's monthly salary. Suppose the employee's annual CTC is 250,000, so according to the rules, 50,000 is taxable. How can we deduct that amount from his monthly salary?
Please reply as soon as possible.
From India, Pune
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3I am confused regarding tax calculation for employees. Please help me understand how to calculate TDS on an employee's monthly salary. Suppose the employee's annual CTC is 250,000, so according to the rules, 50,000 is taxable. How can we deduct that amount from his monthly salary?
Please reply as soon as possible.
From India, Pune
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Hi,
Normally, you need to deduct TDS from the employee's salary on a monthly basis. You can project their salary based on the monthly pay, calculate their yearly salary, apply the tax rate/slab accordingly, and determine the amount of TDS required. This amount should then be divided by 12 to arrive at the monthly tax deduction.
I hope this information will be helpful to you.
Regards,
Nilay
From India, Ahmadabad
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Normally, you need to deduct TDS from the employee's salary on a monthly basis. You can project their salary based on the monthly pay, calculate their yearly salary, apply the tax rate/slab accordingly, and determine the amount of TDS required. This amount should then be divided by 12 to arrive at the monthly tax deduction.
I hope this information will be helpful to you.
Regards,
Nilay
From India, Ahmadabad
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One more thing to keep in mind: in the last quarter of the financial year, do not forget to reassess the employee's tax liability considering the tax-saving documents submitted by them. Make sure to deduct the full and final tax liability in the month of March so that no liability remains outstanding after March.
Thanks & Regards,
Ankur Garg
Tax Consultant.
From India, Agra
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Thanks & Regards,
Ankur Garg
Tax Consultant.
From India, Agra
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Dear Mr. Ankur, Can you please explain in details with some examples so that it will be easy for me to implement.
From India, Pune
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From India, Pune
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Please refer to this wiki GreytipOnlineWiki: Income Tax FAQs.
Thank you.
From India, Bangalore
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Thank you.
From India, Bangalore
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Dear Amar, Can U try to use the attached Excel sheet for arriving at the TDS amounts on month to month basis. You can suitably modify as per your requirement.
From India, Bangalore
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From India, Bangalore
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Dear loginmiraclelogistics,
Thank you for sharing the Salary & IT calculator sheet. I would like to make some modifications to it, but it is password-protected, and I am unable to edit it. If you don't mind, could you please send me the password via inbox? Your assistance would be greatly appreciated.
Regards,
Meghna
From India, Ahmedabad
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Thank you for sharing the Salary & IT calculator sheet. I would like to make some modifications to it, but it is password-protected, and I am unable to edit it. If you don't mind, could you please send me the password via inbox? Your assistance would be greatly appreciated.
Regards,
Meghna
From India, Ahmedabad
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Dear Lalit,
TDS calculations require a detailed understanding of your entire pay package. Under the Income Tax Act, not every component of the salary is taxable. Hence, you need to calculate the TDS only on taxable components. For example, if the salary components are Basic & DA, HRA, Conveyance, Education & Special Allowance, then only Basic & DA are fully taxable, but the remaining components of the salary are not taxable up to a certain amount.
Please find attached the TDS calculator sheet for your reference.
Regards
From India, Hyderabad
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TDS calculations require a detailed understanding of your entire pay package. Under the Income Tax Act, not every component of the salary is taxable. Hence, you need to calculate the TDS only on taxable components. For example, if the salary components are Basic & DA, HRA, Conveyance, Education & Special Allowance, then only Basic & DA are fully taxable, but the remaining components of the salary are not taxable up to a certain amount.
Please find attached the TDS calculator sheet for your reference.
Regards
From India, Hyderabad
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Salary with TDS Calculation-Fin al Amended for net.xls