tds on salaries

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ramesh (Querist)
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11 June 2011 one of the accountant of a manufacturing company deducting tds on salaries in the april & may month for entire previous year salaries. he is doing so to reduce the burden on employees every month and his intension in doing so is during the april and may month employees receives incentives so he deducts tds on salaries inthat month. Is his contension is correct?
what is the correct procedure

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 June 2011 Humour:

Procedure other than this, may be more correct, but this is the best way out which the accountant has implemented.
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This is called " Jagriti" or "Tatparta".
If every Indian starts to pay taxes in such an advance stage, tax targets will be further enhanced by the department in the desire of more Tax-Revenue.
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Reply-
No other procedure can be better than the above which you have mentioned but the suggested procedure is to deduct tax monthly on the basis of average monthly tax liability.

ramesh

ramesh (Querist)
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13 June 2011 sir, he is not deducting in advance. He is doing TDS on Salaries in the next year for the completed previous year but not on monthly average basis.
for ex : TDS on salaries paid during the year2010-11
wil be deducted from may 2011 salaries.
is this procedure correct.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 June 2011 This is not the correct procedure. He is putting financial burden upon either the company in the form of interest and prospective penalties if levied.

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