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Staff salary expense of professional service provider

TDS 372 views 1 replies

Saurabh Jain

Others

28 Points Joined July 2015

Hi,

I provide professional services in the field of Software design from which I earn approx 1 Lac per month and I have employed staff whom I pay INR 20000 pm.
I understand that I can show this as an expense in ITR-4. My question - is it mandatory to deduct TDS and issue form-16? If yes, what do formalities are required?
Currently, I have PAN and Service tax number only.

Thanks,
Saurabh Jain

Replies (1)

Akshay

Senior Assistant

444 Points Joined July 2015

The obligation to deduct TDS on employer arises when he is paying employees salary which exceeds the basic exemption limit (currently ₹.2,50,000). As you are paying him monthly ₹.20,000 which is ₹.2,40,000 pa. and as it is less than basic exemption limit you need not deduct tax on salary or issue Form 16. Hope this clears your doubt.