Threshold for TDS Deduction on Employee Salary

For FY 2024-25, the threshold for no tax payable is indeed ₹3,00,000. However, there's an additional consideration: Rebate under Section 87A: -

 *Eligibility*: Employees with a net taxable income of up to ₹7,00,000 are eligible for a rebate under Section 87A. -

 *Rebate Amount*: The rebate amount is ₹12,500 or 100% of the income-tax payable, whichever is less. TDS Deduction:

As an employer, you should deduct TDS if the employee's annual salary exceeds the threshold. However, considering the rebate under Section 87A: -

 *No TDS Deduction*: If the employee's net taxable income is up to ₹7,00,000, you may not need to deduct TDS, as they are eligible for a rebate. -

 *Employee's Responsibility*: It's the employee's responsibility to claim the rebate in their Income Tax Return (ITR). To ensure compliance, consider the following: -

*Obtain Employee Declarations*: Get declarations from employees regarding their estimated income and eligibility for the rebate. -

*Monitor Employee Income*: Keep track of employee income throughout the year to determine if TDS needs to be deducted. Consult a tax professional or chartered accountant to ensure you're meeting your TDS obligations and following the correct procedures.

Very helpful. Thank you so much for your time!