Tax on Director Salary

TDS on Salary to Director.

Salary decided at the start of the year and TDS was deducted properly every month (exact total tax liability of salary amount divided by 12).

But after 11 months due to less than expected income in company it was decided to reduce total salary of Director, now TDS already deducted out of 11 months salary is more than actual tax liability of salary income, due to reduction in total salary amount.

Will there be any compliance problem for this excess deduction of TDS from salary.

Please guide.

Replies (3)
Quick Summary
Excess TDS on director salary due to later reduction in pay is not a compliance issue. Adjust in the final month if possible, else claim refund in ITR. Ensure correct figures in Form 16 and TDS returns.

 

  • No compliance issue due to excess TDS deduction

  • ✔ Try to adjust in last month (if possible)

  • ✔ Otherwise, director can claim refund in ITR

  • ✔ Ensure correct reporting in Form 16 & TDS return

 

Thank you sir for your reply.

No issue will arise for excess deduction

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