Hi Learned Members
Pls help me out in one confusion I have.
We have computed Income Tax (for 2010-11) for one of our employee who has joined our company in Oct'10, we took his income from the previous employment and gave deductions for the whole year (like Conv. allow. 9600, medical 15000 etc etc) and computed his tax liability for the year and deducted the tax on the same. Now when we are issuing Form 16 we are doing it for the period of his employment (Oct'10 to Mar'11), my question is shall we take the allowances/excemptions on prorated basis for the period of his employment (6 months) or wil it be for the whole year?
If we take it for the whole year as per our Form 16 his tax liability will be less and the tax deduction will be more (coz of income from his previous employment being removed) so can we give form 16 by taking income for 6 months and deductions/excemptions for 12 months. Pls advice
Thanks in advance
CAclubindia
