Tds on salary

As you are running business as Propritership and not liable for Audit, you are not liable to deduct tax.

In other cases the employer need to take a declaration from the employee stating salary received from other employer and deduct tax on both the salaries.

DISAGREEING

Under section 192   , Any person ,WHETHER  individual , firm , company etc is liable to deduct TDS on salary paid irrespective of the fact whether the person is carrying business or not. and whether or not he is liable to tax audit.

However ,TDS only to be deducted if employees ESTIMATED TOTAL INCOME after deductions exceeds basic exemption limit.

You have to calculate his TOTAL INCOME including the income from other orgnisation as declared by the employee ( if the employee have not declared the income from other orginisation consider only the salary paid by you ).calculate tax and deduct TDS accordingly.

NOW LETS TAKE YOUR CASE : 

if the employee start declaring you his from other orginisation from jan . then you should start deducting TDS from jan on average monthly basis:

TOTAL INCOME                                      = 3,30,000

TAX ON ABOVE                                      =  6,180

TDS OF JAN, FEB , MARCH ( 6180/3)       = 2060 each

on the other hand if he declare you the income in march , whole TDS will be deducted in march.

IN any case you have to file the FOUTH quater  TDS return also.

agree with mr ankit....further "estimated annual income" is a bit tricky...as u didnt know his income gonna exceed basic limit before december...so its ok if u dont deduct TDS till december.

after declaration from employee u have to deduct TDS at average rate but spread it over 3 months...i.e income tax/3 is ur TDS for jan, feb and march and u need to file tds return..form 24Q.

TDS Will be deducted  Total amount less Threesold limit = 330000-250000

    = 80000/-

= 80000*10.3%= 8240 amount will be deducted.

Going through Sec192, it appears every employer, including households, shops should apply for TAN and start deducting tax from salary payments. There may be some exemptions in the rules, notifications, circulars etc, need to check.

Sridhar----> are u aware of any circular etc exempting some employers (like those not liabile for audit) from the TDS provisions?