Master in Accounts & high court Advocate
9615 Points
Posted on 01 November 2024
TDS (Tax Deducted at Source) on salary is applicable to:
1. Whom: - Employers (including individuals, HUFs, partnerships, companies, etc.) - Employees (including Indians and foreign nationals) earning salary income
2. What percentage: - The TDS rate varies based on the employee's income tax slab - Typically ranges from 10% to 30% (plus cess and surcharge, if applicable)
Here's a step-by-step guide:
1. Determine the employee's tax liability: - Calculate the employee's gross salary - Apply income tax deductions (e.g., HRA, LTA, medical expenses, etc.) - Apply income tax exemptions (e.g., allowances, perquisites, etc.)
2. Calculate TDS: - Use the income tax slab rates to determine the tax liability - Apply the TDS rate (10% to 30%) to the tax liability
3. Deduct TDS: - Deduct the calculated TDS amount from the employee's salary - Deposit the TDS amount to the government
4.Furnish TDS returns: - File Form 24Q (quarterly) and Form 26Q (annual) - Provide the employee with Form 16 (TDS certificate) Note:
- TDS rates may vary based on government notifications and individual circumstances -
Employers must obtain a TAN (Tax Deduction and Collection Number) for TDS purposes -
Employees can claim a refund of excess TDS deducted while filing their income tax