I have a small company with less than ten employees. Lately, they have been asking me to pay them in two transactions, such that their payslip will show an income less than taxable slab. Rest of their salary to be paid as allowances like shift allowance etc, which is to be transactioned at a later date. They want to avoid TDS. Is this possible? Can experts please advise. I really appreciate your valuable inputs and expert insights. Thanks for your time.
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Salary paid in two payments to avoid tds
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Salary paid in any terms will be taxed in the Financial Year. Even the payment done twice in the month it will be termed as Salary and will be taxed in the hands of Employees and TDS has to be made as per the Act.
Employees have to provide the evidence of Savings such as Rent receipts for HRA, Medical Receipts for Medical Allowance and / or savings under Sec.80C to come out of tax slab.
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