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TDS Rate on salary


Shyam Lal Naik (Service)     16 June 2010

Shyam Lal Naik
Service 
 187 likes  6151 points

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The income from salary does not exceed the exemption limit. The employee does no have PAN. Should TDS be deducted @ 20% u/s 206AA.

 

In response to a query, eminent author Dr. V. K. Singhania has opined that, in such a case TDS has to be deducted @ 20%,  In case PAN is furnished, the rate will be 0%.  Ref - [2010] 18 CPT 117

 

If the law is constructed in the above manner, it shall be a undue hardship to employers and employees in the unorganised sectors.

 

Whether contrary construction possible ? 

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CA VINAY BANSAL (In job with KPMG)     16 June 2010

CA VINAY BANSAL
In job with KPMG 
 13 likes  289 points

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NO TDs is to be made if total salary does not exceed basic exemption limit.

 

Refer Section 192.

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RITESH KOTHARI (B.COM, FCA, DISA(ICAI))     16 June 2010

RITESH KOTHARI
B.COM FCA DISA(ICAI) 
 40 likes  778 points

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Yes liability to deduct TDS arises only when the salary of employee exceeds the minimum exemption limit

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V Sumanth (CA Final student)     16 June 2010

V Sumanth
CA Final student 
 9 likes  77 points

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   The deduction of TDS arises when the salary exceeds the maximum exemption limit . But in cases where PAN is required to be quoted but not quoted, TDS is maximum of 20% or the TDS rate which ever is higher  as per the recent amendment. So what Dr. V. K. Singhania  said is correct.

  But  per IT Act, The employer should  also consider the information given  by the employee while deducting tax at source regarding his other incomes and deductions.  


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