Tax on employee leave job in the middle of the year

Hi,

I would like to say that the company should not deduct further TDS as they have already exceeded the limit of TDS deductible.

Since you have left the company, i only have to add that you will be entitled to termination benefits, whether in calculating the salary these terminal were considered or not.

As far as Section 192 is concerned company cannot deduct TDS from employees salary which the company has not paid.

I would advice you provide them the declaration and state the deductible tax has been deducted, so no further deduction is warranted.

In case you have further queries, feel free to post.

U have computed the tax liability on salary for the proportionate working period and that is correct also.

You have not said about your encashment of leave and gratuity if apllicable etc at the time leaving rhe company.

Check and confirm with your company about the details of salary calculation whether any other components are included while arriving your tax liability. 

Without salary particulars from your employer, it is not possible to give exact opinion on this matter. 

Better to take statement of full and final settlement copy from your employer for better clarity and undetstanding.

Hi,

Although the company is liable to deduct tax on salary at average rate under section 192, sub clause (3) of the same section also states that, the employer can reduce the deduction of tax considering the previous excess deductions. The company will not be statutorily required to deduct tax if already the tax deduction is  in excess of what is required.

However in full and final settlement statement, if any payments made like gratuity/leave encashments by the company, the company may deduct tax at applicable rates.

Hope this solves your query.

Dear all  thanks,

Yes sir

there is a gratuity of Rs.142670 and Leave of Rs.10260/-.

but still company insist after calculatin gratuity and leave it does not increase that much tds liabiltyu on my account.because gratuity is fully exapmted under celing limit.

yogesh

as these are only 1st three months of the year, and assuming that you will continue at some other place with taxable income/salary, the employer is deducting the tax, 

whole the basic exemption of 2 lacs you are setting off in 1st months only, while it would be set off only in whole year. i.e you can set off only pro rata basis for 3 months only in rough calculation, then i hope the calculation will meet the credentials.

however if the excess tax deducted still remain excess at the end of year after adding all income/salary from other projected employers/profession, then you will have to file ITR and claim back the Excess tax paid in TDS.

remember to obtain form16 and match the TDS amounts with your 26AS carefully.

Since company has already deducted excessive TDS, there is no any kind of statutory or other requirement for the company to deduct TDS.

Also including your gratuity and leave encashment, TDS deducted by company is more than they have already deducted.

So convince the company for not deducting further TDS and you may show them provisions of section 192 which relates to TDS on Salary.

Regards

CA Sunny Aggarwal