tds on salary calculation

In case it is probable that the Salary payable to an employee exceeds the basic exemption limit after considering deduction u/s 80C then it is suggested to make TDS.

TDS on salary is deducted on average rate of income tax based on the prevailing rate during the financial year by considering the estimated income of the employee.

Thus, before deducting tax on salary, the basic requirement is to compute the estimated income of the employee. For this, the employer needs to obtain statement from employee in Form 12BB wherein details of deduction is declared by an employee.

The employer in accordance with the above form 12BB shall compute the income of the employee and the tax liability. The amount of tax payable by the employee is then divided by the no. of months and average amount of TDS to be deducted is calculated.

Yes, @ Manish Very well answered.