Tds in net salary arrangements

TDS / TCS 672 views 2 replies

Manorathan

Consultant

25 Points Posted on 23 March 2012

Hello,

I have a query with regard to TDS payments by the company where in the employer is in a net salary contract with his employees. In case of employees who join the firm in the middle of the financial year, would the TDS payments borne by the employer be calculated on the basis of the aggregate salary received by the employee, taking into consideration his/ her employement with a firm prior to his getting into this contract? The contract is worded something like 'The taxes and other deductions such as PF would be borne by the employer'.

Thanks.

Manorathan

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Posted on 24 March 2012

If the employee declares to his current employer the income received from the previous employer also, then the current employer wud be liable to make TDS on the aggregrate payments made to the employee i.e salary recd from previous employer as well as current employer. If the employee does not declare the income recd from his previous employer, then the employer will be liable to made TDS on the payment made by the current employer. the employee then at the time of assessing his final tax liability in the A.Y. & if tax becomes payable then he will be reuired to pay the self-assessement tax.

Manorathan

Consultant

25 Points Posted on 24 March 2012

I would like to have more opinions on this. Unfortunately, the income tax website is not very clear when it comes to net salary arrangements, making it confusing to define the liability of the employer for the TDS payments.