tds rate
for the month july 2020
Hi,
Please refer this
2 Replies
Sagar Patel
(Tax and Business Consultant)
(11611 Points)
Replied 29 July 2020
Section 192 does not specify a TDS rate. TDS will be deducted as per the income tax slab and the rates thereof applicable to the relevant financial year for which the salary is paid.
At first, the salary of the employee is calculated after taking into consideration all the deductions applicable and then tax is calculated according to the tax rate applicable to you. The tax calculation is usually done by the employer at the beginning of the financial year. The TDS to be deducted by dividing the estimated tax liability of the employee for the financial year by the number of months of his employment under the particular employer.
E.g.The tax on salary will be deducted at an ‘average rate’ of income tax computed as follows:
Average rate of income tax = Income tax payable (calculated using slab rates) by estimated income of the employee for the financial year.
For instance: A resident employee Nikhil (aged 60), who works in company, is paid Rs 1,00,000 per month under the head salary during the FY 2019-20. What is the TDS deducted u/s 192 per month?
His total income would be estimated as Rs 12,00,000.
Estimated deduction under Chapter VI A would be Rs 1,00,000.
Therefore, the income chargeable to tax is estimated at Rs 11,00,000.
Tax is calculated as per the current slab rate of individual resident for calculation of TDS on salary u/s 192 = Rs 1,42,500.
Education and higher education cess of 4% on the income tax = Rs 5,700.
Therefore, the net tax payable = Rs 1,48,200.
According to the equation above = Rs 1,48,200/12,00,000*100, which equals to 12.35%.
Hence, TDS u/s 192 to be deducted per month = Rs 1,00,000 x 12.35% = Rs 12,350.
At first, the salary of the employee is calculated after taking into consideration all the deductions applicable and then tax is calculated according to the tax rate applicable to you. The tax calculation is usually done by the employer at the beginning of the financial year. The TDS to be deducted by dividing the estimated tax liability of the employee for the financial year by the number of months of his employment under the particular employer.
E.g.The tax on salary will be deducted at an ‘average rate’ of income tax computed as follows:
Average rate of income tax = Income tax payable (calculated using slab rates) by estimated income of the employee for the financial year.
For instance: A resident employee Nikhil (aged 60), who works in company, is paid Rs 1,00,000 per month under the head salary during the FY 2019-20. What is the TDS deducted u/s 192 per month?
His total income would be estimated as Rs 12,00,000.
Estimated deduction under Chapter VI A would be Rs 1,00,000.
Therefore, the income chargeable to tax is estimated at Rs 11,00,000.
Tax is calculated as per the current slab rate of individual resident for calculation of TDS on salary u/s 192 = Rs 1,42,500.
Education and higher education cess of 4% on the income tax = Rs 5,700.
Therefore, the net tax payable = Rs 1,48,200.
According to the equation above = Rs 1,48,200/12,00,000*100, which equals to 12.35%.
Hence, TDS u/s 192 to be deducted per month = Rs 1,00,000 x 12.35% = Rs 12,350.
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