Liability of TDS

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Poornima

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129 Points Posted on 20 February 2010

Mr. Smart received taxable salary of Rs.1,20,000/- from M/s. ABC Ltd. for the period from 01-04-2009 to 30-09-2009. Thereafter, he switched over his job with M/s. DEF Ltd. from which he would be receiving taxable salary of Rs.1,50,000/- during the period from 01-10-2009 to 31-03-2010. In the application made for job to M/s. DEF Ltd., Mr. Smart had stated his previously drawn salary at Rs.20,000/- per month. Besides, deriving salary income, Mr. Smart has also earned interest income of Rs.1,80,000/- from M/s. DEF Ltd. for the F.Y. 2009-10 on which company has made TDS of Rs.18,000/-. Mr. Smart has not furnished any declaration to M/s. DEF Ltd. Now, the query is that whether at all, there would be any liability for TDS on salary by M/s. DEF Ltd. and if yes, how it would be determined?

Replies (4)

Amol Gopal Kabra (CA,CS,DISA)

Practicing CA

8639 Points Posted on 20 February 2010

As per your query, the income of Mr. Smart is

From ABC Salary - 120000

From DEF Salary - 150000

From DEF Interest - 180000

Totalling to Rs. 450000. On this amount for the prevailing rates, the tax along with surcharge comes to Rs. 45320. And the TDS already made is Rs. 18000.

Here, it is mentioned that Mr. Smart has intimated the company about the earlier Salary of Rs. 120000. In addition to that he has received interest from the current employer Rs. 180000 on which tax has been deducted. As the case is clear from the point of view of DEF Ltd. and it has all the information about the income of Mr. Smart, the company shall deduct the tax on salary for the balance amount i.e. 45320-18000, that comes to Rs.27320. DEF shall deduct Rs. 27320 from the salary of Mr. Smart.

As the company has the information of the income of Mr. Smart, declaration shall not matter in this case as Mr. Smart has intimated about the earlier income and interest is paid by DEF limited itself.