TDS to be deducted when an employee resigns

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 December 2009 An employee joins a company in April and his estimated taxable income for Fy 09-10 is Rs. 7.27 lacs. The PM tax works out to Rs. 11 K. This employee resigns in Dec 09, date of leaving 31.12.09. Presuming that in his Full and Final settlement there is no other income except his regular salary, what should be the TDS amount? Should it be Rs. 11K that was deducted PM till Nov 09 or should his taxable income be revisted again. i.e. Income for the year should be income upto Dec 08 Rs. 6.29 lacs before deduction under sec. 80C etc. and housing loan as well. Further, should the deduction for housing loan int and u/s 80 C be also considered proportionately for 9 mths. i.e. TDS from Dec Salary will be NIL Pl clarify

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 December 2009 When employee resigns we need to calculate the income up to the date od leaving and the savings up to date what ever is there need to considered and arrive the tax and deduct the tax up to date balance need to be deducted from the final settlement

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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28 December 2009 agree. that you have to calculate upto dec salary and less the all deduction which he/she is able to claim and afterthat you have to deduct TDS and give him/her Form 16 without any hesitation.

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2009 Thanks Mr. Ramesh for your reply. Just one more clarification. Should the limit under section 80CC, 80D, House loan interest etc. be proportionately worked out for the period of service i.e. 100000 x 9/12? I think this is not required. Can u please confirm.