T.d.s

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2011 Sir,
My friend has the following income, his & my doubt is that, in salary employer have to deduct tax, while getting rent Tenant deduct tax (TDS: - 10 %,) and same from bank interest, bank deduct Tax (TDS:-10%), but his employer ask the the information about source of his income for deducting Tax on his salary and he gave the following (given under For form 16 preparations)
1. So what is the right of his employer to deduct tax, is only on Salary Income or His Total Income
2. Which one is benefit for him? If employer deduct Tax on his total income, will it come under double taxation, because already deduct tax by both Bank and his tenant, so what is the applicability?
3. He got free food from his Employer, but Employer not paid any tax on that (FBT), whether that come under non monetary amount and will under taxable income?
For form 16 preparations
1. Salary: 15000/-p.m
2. D.A & all other allowance: 7000/- pm
3. Rent From Property: - 20000/-p.m
4. Interest From Bank: 15000/- p.m
5. Insurance Premium paid :10,000/-

While his total Income will be (FOR PREPARE FORM 16 BY HIS EMPLOYER)
Income from salary : 264000

Income from hose property : 240000
Income from other source : 180000
Gross Total Income 684000
Less deduction chapter VI A (80 c) 10000
Taxable income 674000
========

He is 28 years old : so tax liability is 66800/-
3 % CESS 2004/-

TOTAL TAX PAYBLE ( round off)
T.D.S (24000)+(18000) 68800
(42000)
26800
=======

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 August 2011 1. So what is the right of his employer to deduct tax, is only on Salary Income or His Total Income
Reply-
The employer is not having any right.
He is having an obligation and the obligation has been imposed by section 192 of the IT Act.
It is obligatory for him to deduct tax on all the declared income.
Pl also refer the reply of query No 2 below.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 August 2011 Q 2. Which one is benefit for him? If employer deduct Tax on his total income, will it come under double taxation, because already deduct tax by both Bank and his tenant, so what is the applicability?

Reply- If on the declared income , any tax has been deducted , the same has to be considered by the employer, in case information regarding the same is also furnished by the employee to him.

As such, practically he would deduct tax on the Salary Income only, however, employer will be required to deduct the extra tax due to change in slab, if takes place due to additional income.
As such Double Taxation - or Double taxation matter does not remains a question.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 August 2011 Q 3. He got free food from his Employer, but Employer not paid any tax on that (FBT), whether that come under non monetary amount and will under taxable income?
.

Reply- Meal of up to Rs. 50/- per diet can be given by the employer at the place of work. Looking to the fact, the perquisite is not taxable for the employee and has not been added in Form 16.

Further, FBT provisions are not applicable from AY 2010-11.

Querist : Anonymous

Querist : Anonymous (Querist)

17 August 2011 Thank yiu sir m
Thank u very much ,

Can you please tell me that , have any tax liabilty to employer for providing Food to employees ,

Sir, if the employer is responsible for deduct tax only on salary , so why did eployee give all information to his employer about his other income

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