TDS on Salary

Originally posted by : Nitin Bhatt
	DEAR ALL, IF EMPLOYEE IS NOT PROVIDING PAN NO WHAT WILL BE THE TDS RATE IS IT 20 % OR 10 % THANKS

AS PER AMENDMENT IT IS COMPULSORY FOR DEDUCTEE TO PROVIDE PAN NO. OTHER WISE FOLLOWING TDS IS DEDUCTED:-

1. RATE AS PER SECT OF TDS

2. SPECIAL RATE IF PROVIDED

3. 20%

WHICHEVER IS HIGHER.

IT IS COMPULSORY FOR EMPLOYER TO DEDUCT THE TDS AT ABOVE SAID RATE IF PAN NOT PROVIDED BY EMPLOYEE.

IF NOT PROVIDING PAN THAN I THINK ITS 20%

There is a Press Release for that released on 20th January 2010.

I have posted the Press Release in CA CLUB INDIA already. Go for it.

I'm sure that TDS @ 20% for those who dont have PAN numbers inclusive of Salary.

Hope it helps

Thanks & Regards

If deductee not providing Pan No. then TDS will be deducted at higher rate i.e. 20%.

You cannot apply directly 20% for TDS on salary u/s 192 where the PAN is not available.

a. First arrive at the gross taxable salary. Then give the deductions for loss from house property and Chapter VI A if any and arrive the net taxable income.

b. On this net taxable income calculate tax as per the normal provisions (ie. at slab rates).

c. On the net taxable income calcualate the tax by applying 206AA i.e. 20% (without giving basic exemption limit which is applicable for individuals)

d. TDS shall be the amount calcualted as per (b) or (c) which ever is higher.