Dear sir/madam,
How to do the calculation of TDS on salary of an employee of a non-government company. Up to my knowledge the TDS rate on salary is, average rate of income tax of an employee. And the way to calculate the average rate of income tax is, Rs. 36,865 (monthly salary) * 12 = 4,42,380/- (annual salary). If the person's age is 61, then the tax slab is 3,00,000. He doesn't have any tax deduction things. Hence, 4,42,380 - 3,00,000 = 1,42,380/-, and 1,42,380 * 5% = 7,119/- + 4% Cess = 7,403/- (Tax Payable). (7,403/4,42,380)*100 = 1.67% (average rate of income tax). Therefore 1.67% * 36,865 = 615 (TDS deductible). In quarterly payment 615*3 = 1,845. For four quarters 1,845*4= 7,380 (annual deduction). Is my calculation method right? Please correct me if I am wrong. And can the employer deduct higher amount than this?, like 7,400 or 7,500. Because at the end of the time employee can get input credit right? So is it wrong if an employer deduct higher amount than Rs. 7,380/-?
CAclubindia
