Change in period of salary income

TDS 1434 views 2 replies

SUPRAKASH MITTRA

CA PSU

61 Points Joined October 2012

In our company the period for which salary is calculated is different for each category of employees. Presently we follow the period of 12 months from april to march for calculating TDS. However we are facing a lot of difficulties in respect of timely deduction and deposit of TDS amount for a particular financial year. Therefore we want to change the period for TDS to march to feb. But the following questions arise :

1. if we want to implement the change in this previous year (2012-13) itself , we can issue the form 16 for a period of 11 months of SALARY INCOME only ie from APRIL'12 TO FEB'13 for TDS purposes against the Assessment year 2013-14. Is that permitted ?

2. if the above is possible, the next period ie MAR'13 to FEB'14 (12 months) shall be the period to be considered for Assessment year 2014-15 ?

3. what are the procedures to be complied with for giving effect to the above change?

Kindly help with your valued opinion.

Regards

Replies (2)

jafer

studies

194 Points Joined March 2009

Hi,

1) As per ur facility u can change the date but as per income tax u cannot change the date. In TDS, u will be filing monthly/quaterly return and the return will be filed on the basis of april to march only.

2) As per the definition of "financial year" defined under Income tax act, only government employees salary will be calculated from march to feb. Hence, all other employees salary has to be calculated from april to march.

These are my opinions but plz, it is not conclusive. There may be someother proviso also on this. Any suggestions by expert are welcome.

regards,

jafer

Natesh Navada

Chartered Accountant

149 Points Joined August 2009

Hi,

TDS certificates have to be issued annually in case of salaries and quarterly in case other than salary.

For salary the due date for issuing certificate is 31st May of the financial year immediately following the previous year in which the income tax is deducted. Previous year means from 1st April to 31st March.

Also for the purpose of computation of TDS of salaried employees, tax will be calculated on the basis of average tax of the employee. Such computation can only be made for the previous year April - March.

Hence you cannot deduct and issue form 16 for the period Feb - March

Natesh