Hi - our senior manager is leaving our company. His salary is INR 556,500 per year (INR 46,375 per month). He will be paid INR 88,500 on June 30 (in his final salary) which includes his June salary, bonus and unused annual leave. He was paid INR 46,375 gross salary for both April and May so his year-to-date salary will be INR 181,250 for the 3 months ending 30 June.
He has not provided us with any declaration regarding his savings, investments or sums qualified for deduction or exemption under salaries.
He has been preparing and approving everyone's salaries, including his own. I would like to know, please, if we should (or must) deduct TDS on his June salary (and also his April and May salary) and pay it to the Income Tax Department. Thank you.
From New Zealand, Auckland
He has not provided us with any declaration regarding his savings, investments or sums qualified for deduction or exemption under salaries.
He has been preparing and approving everyone's salaries, including his own. I would like to know, please, if we should (or must) deduct TDS on his June salary (and also his April and May salary) and pay it to the Income Tax Department. Thank you.
From New Zealand, Auckland
As his total income from the current company is INR 181250 including Monthly wages, Leave Encashment, Bonus & against any other payable. For this amount you might not deduct TDs as its less than 250000/- but he should calculate of the receipts in future in the same FY and need to pay TDS. If still the company is willing to deduct yes you can deduct & remit to the IT
From India, Bangalore
639From India, Bangalore
dear Chakra Partners,
The Sr. Manager's earning for this financial year from your company does not exceed the minimum limit for Income tax deduction. Hence you may not deduct any tax from his settlement amount.
However, when he joins another company in this financial year, he would have to give declaration pertaining to the investments that he would be doing to enable his new company to calculate his tax liability and make suitable deductions.
And at the end of the year, your company would have to issue his form 16 which he would need to calculate his overall tax liability while filing his returns in July/Aug-2017.
Regards,
A.B.
From India, Mumbai
The Sr. Manager's earning for this financial year from your company does not exceed the minimum limit for Income tax deduction. Hence you may not deduct any tax from his settlement amount.
However, when he joins another company in this financial year, he would have to give declaration pertaining to the investments that he would be doing to enable his new company to calculate his tax liability and make suitable deductions.
And at the end of the year, your company would have to issue his form 16 which he would need to calculate his overall tax liability while filing his returns in July/Aug-2017.
Regards,
A.B.
From India, Mumbai
Dear Chakra Partners,
It is not at the discretion of the employer, rather it rests on the discretion of the employee, who gets or would get salary from more than one employer. The Tax Payer has to choose which employer should make TDS out of his estimated or aggregate salary, as per the provision of Para 3.3 of Income Tax Circular No 20/2015, dated 02.12.2015. So, ask your Sr. Manager in writing whether he would like to get TDS deducted from his June salary/F&F or would get deducted from his next employer.
Para 3.3 of the Circular describes, as follows:
“Section 192(2) deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the tax payer may choose) from the aggregate salary of the employee, who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head "Salaries" due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present/chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer).”
From India, Delhi
It is not at the discretion of the employer, rather it rests on the discretion of the employee, who gets or would get salary from more than one employer. The Tax Payer has to choose which employer should make TDS out of his estimated or aggregate salary, as per the provision of Para 3.3 of Income Tax Circular No 20/2015, dated 02.12.2015. So, ask your Sr. Manager in writing whether he would like to get TDS deducted from his June salary/F&F or would get deducted from his next employer.
Para 3.3 of the Circular describes, as follows:
“Section 192(2) deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the tax payer may choose) from the aggregate salary of the employee, who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head "Salaries" due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present/chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer).”
From India, Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Employee Appraisal Form new.doc
TDS circular.pdf