Hi
One of the employee Mr. ABC has worked for X organisation for six months Apr to Sept 06 wherein he has received salary of Rs. 15,00,000 and claimed deduction of Rs. 100000/- and has paid the tax as per the workings fully.
Now Mr. ABC has joined Y organisation from October 2006, wherein he has submitted form no 12B declaring his previous income and other TDS details. The new organisation has deducted TDS on the salary paid to Mr. ABC at the maximum tax rates of 33.66% without giving him the benefit of intial exemptions as he has already availed the benefit initial exemption with the earlier employer.
Now Y wants to issue Form 16 to the Employee. Whether Y should issue salary certificate for the salary drawn by Mr. ABC for the period Oct- March 2007? and Y has to calculate tax liability at 33.66% only disregarding the intial exemptions?
Pls elaborate?
As far as form 16 is concerned, Y can rightly give it in respect of the period served with them i.e oct-mar.
Initial exemption is also correctly disregardses as the same id already exhausted in the previous org.
And as sal income was 15 lacs previously, then Mr. X is already in the third bracket of tax i.e 30% + sur
So the steps of Y are correct
CAclubindia
