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Tds on salary

RAMESH (STUDENT) (106 Points)

04 January 2016

I AM RUNNING MY PROPRIETORSHIP FIRM AND PAYING SALARY TO ONE EMPLOYEE A SALARY OF RS 15000(FIFTEEN THOUSAND) PER MONTH .. THE SAID EMPLOYEE IS ALSO EMPLOYED IN ONE OTHER ORGANISATION AND EARLING RS 50000 PER MONTH ..

MY QUESTION IS IF MY EMPLOYEE SELECTS ME TO DEDUCT TDS ON HIS SALARY THEN HOWMUCH TDS SHOULD BE DEDUCTED ? AND WHEN IT SHOULD BE DEDUCTED...

ALSO WHEN RETURN SHOULD BE FILED? QUARTELY OR YEARLY

NB: I AM NOT LIABLE TO TAX AUDIT

SALARY APRIL-DEC- 15000*9= 135000

SALARY JAN-MAR - 65000*3= 195000

TOTAL FOR THE YEAR- 330000

LIC AND OTHER DEDCN -NIL

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6 Replies

Sridhar Baggam (Finance) (23 Points)
Replied 04 January 2016

As you are running business as Propritership and not liable for Audit, you are not liable to deduct tax.

In other cases the employer need to take a declaration from the employee stating salary received from other employer and deduct tax on both the salaries.

Ankit Taprania (CA FINAL ) (542 Points)
Replied 04 January 2016

DISAGREEING

Under section 192 , Any person ,WHETHER individual , firm , company etc is liable to deduct TDS on salary paid irrespective of the fact whether the person is carrying business or not. and whether or not he is liable to tax audit.

However ,TDS only to be deducted if employees ESTIMATED TOTAL INCOME after deductions exceeds basic exemption limit.

You have to calculate his TOTAL INCOME including the income from other orgnisation as declared by the employee ( if the employee have not declared the income from other orginisation consider only the salary paid by you ).calculate tax and deduct TDS accordingly.

NOW LETS TAKE YOUR CASE :

if the employee start declaring you his from other orginisation from jan . then you should start deducting TDS from jan on average monthly basis:

TOTAL INCOME = 3,30,000

TAX ON ABOVE = 6,180

TDS OF JAN, FEB , MARCH ( 6180/3) = 2060 each

on the other hand if he declare you the income in march , whole TDS will be deducted in march.

IN any case you have to file the FOUTH quater TDS return also.

(Guest)

agree with mr ankit....further "estimated annual income" is a bit tricky...as u didnt know his income gonna exceed basic limit before december...so its ok if u dont deduct TDS till december.

after declaration from employee u have to deduct TDS at average rate but spread it over 3 months...i.e income tax/3 is ur TDS for jan, feb and march and u need to file tds return..form 24Q.

mahipal (ca) (41 Points)
Replied 04 January 2016

Tq sir for ur suggestions

sunil (Sr. Accountant) (38 Points)
Replied 08 January 2016

TDS Will be deducted Total amount less Threesold limit = 330000-250000

= 80000/-

= 80000*10.3%= 8240 amount will be deducted.

Sarkar (Tax Professional) (21 Points)
Replied 12 January 2016

Going through Sec192, it appears every employer, including households, shops should apply for TAN and start deducting tax from salary payments. There may be some exemptions in the rules, notifications, circulars etc, need to check.

Sridhar----> are u aware of any circular etc exempting some employers (like those not liabile for audit) from the TDS provisions?