TDS on salary

TDS / TCS 615 views 2 replies

Ramu

Employee

34 Points Posted on 24 March 2009

A person is employed as a consultant for the first 6 months and the same has been considered as an employee after the completion of said period. TDS was deducted separately on consultancy income and salary income. My question is while calculating the salary income shall we consider the consultancy income under “Any other income reported by the employee” and accordingly deduct the difference of tax from his salary income.

For Example:

Consultancy Income - Rs.5,00,000/-

TDS @ 10.3% - Rs. 51,500/-

Salary Income : Rs.5,00,000

Permissible deductions – Rs. 1,00,000

Chargeable salary : Rs.4,00,000

Tax on the above : Rs.36,050

If both income are clubbed :

Gross Total Income : 10,00,000

Permissible deductions : 1,00,000

Total Income : Rs.9,00,00/-

Tax on the above : 1,80,250

Tax deducted : Rs.87,550

Diff : 92,700/-

Who will the responsible for difference tax?

Whether there is any obligation in the hands of the employer to deduct difference tax ?

The assessee can pay the difference of tax as self assessment tax

Pls guide me in this regard.

Replies (2)

Pavan Jain S

Chartered Accountant

1575 Points Posted on 24 March 2009

If the assessee-employee declares the consultancy income to the employer, then he is responsible for deducting tax on the same. If the assessee does not declare his consultancy income in prescribed form to the employer, there is no obligation on the employer to consider consultancy income while deducting tax. In such case, the assessee can pay the differential tax by way of SAT

Ramu

Employee

34 Points Posted on 24 March 2009

Sir, thanks for the reply. The assessee is getting the consultancy income as well as the salary from the same person. In that case is declaration is necessary?. In my view, if the employee is getting any income from third person then he has to declare the particulars of such income. pls refer any case law in this respect'