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Tds on salary

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Varshit Shah

Self Employed

345 Points Posted on 05 December 2013

One of my client a proprietory concern , not covered under TDS ( turnover is less than 1 crore ) , employed one person whose package is 5,00,000/-. As per requirement of TAN registration for Individual , they must have crossed turnover of one crore , and as his turnover in last 3 yrs is less than 1 cr , therefore my client has not registred for TAN. In this case does my client is reuired to deduct TDS on salary ? If yes , do cite case laws or clarification. If no , then employee himself has to pay the tax ?

Thanking you all in advance.

Replies (1)

Neljo Davis ACA

Consultant

521 Points Posted on 05 December 2013

The Client is required to deduct TDS on Salay even if only one employee is there. TAN required to be obtained by all persons who are responsible for deducting or collecting tax. There is no requirement of crossing one crore turnover for obtaining TAN. As Per 203A (1) of IT Act, 1961 "Every person, deducting tax or collecting tax in accordance with the provisions of Chapter XVII, apply to the Assessing Officer for the allotment of a "tax deduction and collection account number".