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Tds on ex-gratia payment in addition to normal salary

This query is : Resolved 
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(Querist)
08 April 2013 Hi All,

Please advise whether in the following case, TDS needs to be deducted at the time of payment only or can be deducted over a period of 12 months.
Mr. X is doing a job in ABC Ltd. his normal salary for FY 13-14 (net taxable income) is Rs. 7.5 lacs. He is paid Rs. 1 lac ex-gratia payment in the month of Apr-13. Since he is falling in 20% slab, TDS will be deducted in Apr-13 will be:
1. @ 20.60% on Rs. 1 lac + average TDS on normal income
2. Average TDS on 8.5 lacs

Thanks in advance.
Ramesh
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CA Neha Chauhan

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CA Neha Chauhan (Expert)
08 April 2013 Dear,

Option 1 is the correct one

Regards,
Neha Chauhan
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