What is the difference between TDS and income tax?
For calculating income tax, we know the income tax slab for different salaries (like 0-250000 No tax, 250001-500000 10%...). However, in corporate (IT/ITES) companies, monthly TDS is deducted from the employee's salary. Here, I want to know if the slab rate for TDS deductions is calculated based on CTC/NET salary.
From India
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For calculating income tax, we know the income tax slab for different salaries (like 0-250000 No tax, 250001-500000 10%...). However, in corporate (IT/ITES) companies, monthly TDS is deducted from the employee's salary. Here, I want to know if the slab rate for TDS deductions is calculated based on CTC/NET salary.
From India
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TDS is Tax Deduction at Source. Income Tax is calculated based on your projected income, and the tax is deducted every month from your salary, then deposited with the tax authorities. If there is an excess or shortfall in Income Tax, the same can be claimed or the shortfall paid while filing your income tax returns every year.
Pon
From India, Lucknow
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660Pon
From India, Lucknow
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Agree with Pon.
Further, IT is calculated on total projected earnings during a financial year. It has nothing to do with Net pay or CTC. As a thumb rule, all the items on the Earning side of your payslip are considered to calculate the Total Earnings, from which various investments as per your declarations (like u/s 80C, 80D, etc.) are deducted to arrive at Taxable Earnings.
From India, Mumbai
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Further, IT is calculated on total projected earnings during a financial year. It has nothing to do with Net pay or CTC. As a thumb rule, all the items on the Earning side of your payslip are considered to calculate the Total Earnings, from which various investments as per your declarations (like u/s 80C, 80D, etc.) are deducted to arrive at Taxable Earnings.
From India, Mumbai
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Dear SR,
I appreciate the views given by Pon & Dixon. But I really do not understand why we don't refer to the relevant Act before posting our doubts/queries on this forum. If we find answers to our doubts by ourselves, it will be more satisfying and will get deep-rooted in our heart and mind. So, my humble suggestion is that please refer to the IT Act first, and if any doubt remains, let that be posted on this forum.
I could have made additions to what has been posted earlier. But I am not doing so. I would appreciate it if you go through the Act and then post your query that remains uncleared.
AK Jain
From India, New+Delhi
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I appreciate the views given by Pon & Dixon. But I really do not understand why we don't refer to the relevant Act before posting our doubts/queries on this forum. If we find answers to our doubts by ourselves, it will be more satisfying and will get deep-rooted in our heart and mind. So, my humble suggestion is that please refer to the IT Act first, and if any doubt remains, let that be posted on this forum.
I could have made additions to what has been posted earlier. But I am not doing so. I would appreciate it if you go through the Act and then post your query that remains uncleared.
AK Jain
From India, New+Delhi
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