Tds salary not having pan
This query is : Resolved
Malcome M Bandya
(Querist)
10 May 2012
Dear Sir,
Our employees not having PAN nos. now we have to deduct TDS 20% but which amount we have to deduct TDS?
e.g. Salary amounting to Rs. 3,20,000/-, Less-80C deduction Rs. 60,000/- now Taxable amount is Rs. 2,60,000/- (as per salary table we have deduct tax on Rs. 2,60,000/- less 1,80,000/- = Rs. 80,000/- only)
Please advise we have to deduct Tax 20% on Rs. 80,000/- or any other amount???
Regards,
Malcome
Our employees not having PAN nos. now we have to deduct TDS 20% but which amount we have to deduct TDS?
e.g. Salary amounting to Rs. 3,20,000/-, Less-80C deduction Rs. 60,000/- now Taxable amount is Rs. 2,60,000/- (as per salary table we have deduct tax on Rs. 2,60,000/- less 1,80,000/- = Rs. 80,000/- only)
Please advise we have to deduct Tax 20% on Rs. 80,000/- or any other amount???
Regards,
Malcome
10 May 2012
Tax rate of 20% is to be applied to the taxable income. In this case, TDS will be calculated @ 20% of Rs. 2,60,000/-.
CA CS Amit S. Kedia
(Expert)
10 May 2012
Section 206AA- Requirement to furnish Permanent Account Number
Section 206AA uses the words "...any sum or income or amount, on which tax is deductible...". Which clearly suggests that the higher rate shall be applied only on the income on which tax is deductible. U/s 192, the average rate is applied to deduct the TDS but the tax is deductible only on the amount which exceeds the basic exemption limit as per section 192.
Hence, TDS will be deducted only on the portion which exceeds basic exemption limit.
Section 206AA uses the words "...any sum or income or amount, on which tax is deductible...". Which clearly suggests that the higher rate shall be applied only on the income on which tax is deductible. U/s 192, the average rate is applied to deduct the TDS but the tax is deductible only on the amount which exceeds the basic exemption limit as per section 192.
Hence, TDS will be deducted only on the portion which exceeds basic exemption limit.
CA PRAVEEN SINGH
(Expert)
10 May 2012
Yes agree with above expert.
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