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Tds on salary income

23 October 2020

I am doing business as trader
I pay salary to two employees more than
35000 is Maditory tds on those salary income
and one more thing my turnover less than 1 cr filed itr 4 section 44ad

please guide me this case

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15 Replies

JATINDER KUMAR (Accountant) (3662 Points)
Replied 23 October 2020

No need to deduct tds

1 Like

MAHARAJA SELVA ESWAR (285 Points)
Replied 23 October 2020

Assuming 35000 as per month per employee salary, the total salary exceeds basic exemption limit ,hence tds needs to be deducted under section 192 of the income tax act, 1961

JATINDER KUMAR (Accountant) (3662 Points)
Replied 23 October 2020

No need to deduct TDS

Total Salary - 420000
Less SD - 50000

Taxable Salary - 370000
Tax - 6000
Less Rebate u/s 87A - 6000

Bal Tax - Zero

No need to deduct TDS

MAHARAJA SELVA ESWAR (285 Points)
Replied 23 October 2020

As per section 192 ,tds needs to be deducted if the salary exceeds the basic exemption limit . Even after deducting SD, it exceeds the basic limit. Then obviously tds needs to be deducted

JATINDER KUMAR (Accountant) (3662 Points)
Replied 23 October 2020

@ Maharaja Selva Edwar Ji, No need to deduct TDS on Salary as per section 192

How can deduct tds on salary on Nil tax liability

only ITR filing mandatory if income above BEL

See calculation

MAHARAJA SELVA ESWAR (285 Points)
Replied 23 October 2020

Bro, even if there is no tax liability , tds needs to be deducted,he will get refund .Rule says,if it exceeds exemption limit tds needs to be deducted. Not depending on its tax liability

ayusmita (Tax consultant) (5885 Points)
Replied 23 October 2020

Assuming you gives them monthly salary of 35000+ to two employees
then calculated its total tax liability including his investment if there are comes under nil return then no tds cut
but if they're arising tax liability then tds will cut as per the particular financial year income tax slabs rate
by using the formula of tax liability on average rate of income tax
and average rate of tax liability is = total tax liability ÷ total income of an employee
by using this formula you get the tds rate at which you cut the tds
now total tax liability includes everything his savings investment ,lic n all
now your 2nd question if you want you can audit if you're turnover between 60 lkh to 1cr it's not mandatory fully depends upon you
but you should keep or maintain books of account

JATINDER KUMAR (Accountant) (3662 Points)
Replied 23 October 2020

Sorry, Not agree with your reply

ayusmita (Tax consultant) (5885 Points)
Replied 23 October 2020

He says he's giving more than 35000
and not even clarify it's annually or monthly
so obviously I can't predict a per investment and other deduction and says a yes or no for TDS so I simply state when it's TDS is cut or not cut and how to know the rate to cut