Dear Friends , Recently i have been given to assisnmnet to look after payroll also. Can anyone help me in TDS (Tax deducted at source) calculation. Need it very urgently. Best wishes Asha
From India, Bangalore
From India, Bangalore
if anyone's salary crosses Rs. 20000/- per annum, then we cut TDS of that employee, in case of small unit having less than 20employees and today the TDS percentage which is deducted from the salary is 5.15%
From India, Thana
9From India, Thana
Hi Asha,
As a practice, organizations deduct provisional income tax on monthly basis based upon the expenses and savings declaration given by the employee at the beginning of every financial year. In Jan every year they ask employees to submit the proof of their expenses and savings. If employees fail to submit the same, payroll recalculate the income tax based upon availability of proof and recover more tax in next two-three months. There is no hard & fast rule that income tax would be same for all people drawing 2L or 3 L or above. It all depends upon their expenses & savings.
There are different slabs for income tax for the Financial Year 2007-08. E.g.
Income upto 1.10L - Nil (for Male), 1.45L - Nil (for Female)
1.10 to 1.5L - 10% (For Male), 1.45 to 1.5L - 10% (for Female)
1.5 to 2.5 L - 20%
2.5L & above 30%
Please note that income is not the gross salary.
Income = Gross salary - expenses (e.g.HRA, CCA,Children Allw, Med reim, refreshment all etc) - Savings (PF, PPF, LIC, Mutual fund, Houseloan etc..etc..)- Statutory Deduction (ESI, P.Tax).
Pls refer computation of Income tax on salaries from Income tax book for details.
Pls remember that income tax rules changes every year according to Finance budget.
Regards,
Anup
From India, Hyderabad
As a practice, organizations deduct provisional income tax on monthly basis based upon the expenses and savings declaration given by the employee at the beginning of every financial year. In Jan every year they ask employees to submit the proof of their expenses and savings. If employees fail to submit the same, payroll recalculate the income tax based upon availability of proof and recover more tax in next two-three months. There is no hard & fast rule that income tax would be same for all people drawing 2L or 3 L or above. It all depends upon their expenses & savings.
There are different slabs for income tax for the Financial Year 2007-08. E.g.
Income upto 1.10L - Nil (for Male), 1.45L - Nil (for Female)
1.10 to 1.5L - 10% (For Male), 1.45 to 1.5L - 10% (for Female)
1.5 to 2.5 L - 20%
2.5L & above 30%
Please note that income is not the gross salary.
Income = Gross salary - expenses (e.g.HRA, CCA,Children Allw, Med reim, refreshment all etc) - Savings (PF, PPF, LIC, Mutual fund, Houseloan etc..etc..)- Statutory Deduction (ESI, P.Tax).
Pls refer computation of Income tax on salaries from Income tax book for details.
Pls remember that income tax rules changes every year according to Finance budget.
Regards,
Anup
From India, Hyderabad
Hi Asha,
You may visit the official web site of Income Tax Authorities for more details - http://incometaxindia.gov.in
Also you may refer the book "Tax Computation Made Easy" by Suhas Kulkarni... for basic issues for Income Tax....
Thanks
Sachin Dhavale
From India, Pune
You may visit the official web site of Income Tax Authorities for more details - http://incometaxindia.gov.in
Also you may refer the book "Tax Computation Made Easy" by Suhas Kulkarni... for basic issues for Income Tax....
Thanks
Sachin Dhavale
From India, Pune
Hi Anup, Is TDS deducted same in every State. Is TDS implemented for contract employees. Waiting for your reply. Regards, Malini.
From India, Hyderabad
From India, Hyderabad
Yes, because it is governed by Central Finance Act. Across India, rates are same except few States as defined under Income tax act e.g. J&K, NE region (refer the Income tax act for more information).
TDS does not see whether employee is on permanent roles or contract. TDS shall be attract on any kind of income. We are talking about income tax on salaries. Hence, if you are paying salary to contract employees from your end, it shall be deducted as per act, and if they are outsourced, it shall be deducted from outsourcing agency end through their payroll.
Again I advise, pls refer calculation of Income tax on salaries for better understanding.
Regards,
Anup
From India, Hyderabad
TDS does not see whether employee is on permanent roles or contract. TDS shall be attract on any kind of income. We are talking about income tax on salaries. Hence, if you are paying salary to contract employees from your end, it shall be deducted as per act, and if they are outsourced, it shall be deducted from outsourcing agency end through their payroll.
Again I advise, pls refer calculation of Income tax on salaries for better understanding.
Regards,
Anup
From India, Hyderabad
AS PER SECTION 192 OF THE INCOME TAX ACT, 1961, IT IS STATUTORY OBLIGATION OF THE EMPLOYER TO DEDUCT TAX AT SOURCE BEFORE MAKING THE PAYMENT TO THE EMPLOYEE. FOR THIS PURPOSE, HE HAS TO MAKE AN ESTIMATE OF THE SALARY WHICH IS LIKELY TO BE DISBURSED TO THE EMPLOYEE AND MAKE A CALCULATION OF INCOME TAX, NOW THIS TAX IS TO BE RECOVERED FROM THE SALARY OF THE EMPLOYEE ON MONTHLY BASIS AND DEPOSITED WITH THE CENTRAL GOVT. WHILE MAKINE THE ESTIMATION OF INCOME TAX TO BE DEDUCTED SAVINGS WHICH AN EMPLOYEE IS TO MADE UNDER SECTION 80C AND OTHER SECTIONS WHICH QUALIFY FOR EXEMPTION ARE TO BE TAKEN INTO CONSIDERATION. I AM ENCLOSING HEREWITH THE SCHEDULE OF TDS RATES FOR THE ASSESSMENT YEAR 2007-2008 WHICH THE READER MAY FIND USEFUL
DEEPAK THUKRAL
CHANDIGARH
From India, Chandigarh
DEEPAK THUKRAL
CHANDIGARH
From India, Chandigarh
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.
TDS circular.pdf
Format--new TDS rates.xls
BASICS OF TDS ON SALARY-1.doc