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TDS - Please clarify my doubts

sanju (Accountant) (348 Points)

19 September 2011

Friends,

ours is a partnership firm, for 10-11 financial year we have paid our employees salaries between the range of 10,000/pm to 20,000/pm. for this do we need to deduct tds while paying salaries?

for 10-11 an assesses income exceeds 160000 then he need to pay tax. is that 160000 is after the permissioble deductions and exemption of incomes according to income tax act? my doubt is if a person receives more than 160000 under the salaries( eg:15000*12) than do we need to deduct tds? pls clarify my doubts friends< THANKS IN ADVANCE

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12 Replies

CA Hemang Shah (PRACTICE) (658 Points)
Replied 19 September 2011

Yes he have to have pay tax

1 Like

Mihir (Wealth Manager) (5293 Points)
Replied 19 September 2011

Technically, you have to deduct TDS from salary, but if you have received a declaration from your employee stating his/her deduction amount and tax liability (Nil), then the you can decide whether to still deduct TDS or not.

1 Like

Prakash (Chartered Accountant) (560 Points)
Replied 19 September 2011

Well

Here criteria is not the total salary you paid,

its the total taxable salary to each employee

You can avoid paying TDS by Properly Planning Payslip Breakup, Provide for HRA, Conveyance, Medical, LTA etc in payslip. As you are paying in between 10K to 20K, there won't be any TDS

Please do't make their life miserable by Deducting TDS, as your salary package itself less than 20K

Ask them to provide for Rental bills, LIC, Medical Bills and a detailed declaration of savings

2 Like

valji (Accounts manager-MBA) (2150 Points)
Replied 19 September 2011

agree with mihir if income exceed the taxable limit then you have to deduct the TDS

2 Like

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 19 September 2011

Yes TDS on salary is deducted ....if payment of salary is exceed the exemption limit....

tax liability is caculated after taking provision of ,chapter vi a....80 c.....Deduction...ast deductee that if he provided detail of investment....made...for 80C...

tax liability is divided by 12.....and so on TDS is calculated monthly basis....as suitable....

2 Like

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 19 September 2011

TAXABLE SALARY WILL BE COUNTED AFTER TAKING ALL THE DEDUCTIONS FOR SALARY PURPOSE

1 Like

SANYAM ARORA (“It's hard to beat a person who never gives up.”) (20168 Points)
Replied 19 September 2011

Originally posted by : Mihir
	Technically, you have to deduct TDS from salary, but if you have received a declaration from your employee stating his/her deduction amount and tax liability (Nil), then the you can decide whether to still deduct TDS or not.

CS Bijoy (Expert) (6394 Points)
Replied 20 September 2011

Agreed with MIhir.......

tax liability raise if only the income exceed exemption limit after availing all deduction.

C.A. Sandeep Wawhal (Chartered Accountant PGDFM BCom.) (1823 Points)
Replied 20 September 2011

TDS is applicable if Salary payment is crossing the prescribe limits. Also you have to consider excempt allowances i.e. Conveyance/PF/PT etc. and his/her investments which is/are made personaly which are applicable for deduction under chapter VIA of income tax act. then if balance salary income is above the limits, then you have to calculate the tds and payment for the same.

Preparation of proper computation of salary income of each taxable employee is must.

1 Like

Dhananjaya.N (Asst. Manager Finance & Accounts) (57 Points)
Replied 20 September 2011

I agree with Prakash, get declaration from employees like actual rent paid, LIC premium paid and any other investment, normaly who drawn less than 20k no need of TDS deduction, plan the salary structure like providing the HRA, Conveyance, Telephone allowance, Medical and etc

1 Like

Ateeq (CA - Final) (213 Points)
Replied 22 September 2011

Agree with Sandeep, Further you can ask the employees for less deduction or no deduction of TDS on reasonable grounds such as lossed from investments not yet adjusted and so on......