Tds on salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2014 Dear Sir

We are a trust and our school have teachers & other staff of State Govt.

We prepare the salary bill 5th of the current month and salary gets credited into teachers account on 1st of next month.

For eg. For June 14, we prepare salary bill on 5th June and submit the same to state education dept. Salary to teachers credited on 1st Jul.

TDS is being deducted from salary and state govt reimburse the TDS into our trust account.

Please advise,
1. When should I pay TDS into govt account in above example ?

Is it 7th Jul or 7th Aug ?

i.e TDS deduction on accrual or payment ?

2. If it is on payment basis, then for the March 15 the salary will be paid on April 1, 2015 and TDS payment on May 7,2015.

In such case, form 16 will not have March 2015 as date of deduction falls beyond the quarter date.

Form 16 will state the details from March 2014 to Feb 2015.

Please advise if above is right or wrong ?

Your expert view will help us in correct compliance.

@VaibhavJ

@VaibhavJ (Expert)
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15 July 2014 Hi

On whose payroll Teachers are? It is employers liability to meet tax liability.

Your understanding of TDS is correct however form 16 will always contain data for April to March only.

Since for March TDS due date in your case is on 7th may but while remitting tax you will have to include it under FY 2013-14 & not FY 2014-15. So form 16 will be issued accordingly.

Thanks//Vaibhav

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2014 Thanks for the prompt feedback.

The teachers & other staffs are employees of state education dept. The salary & other benefits are as per state govt employee scheme only.
However, these have been deputed to school for day to day functioning.

Please note, salary grant is first credited into our account and then as per the state govt standard instructions gets debited to same for further credit to employee account.

Hence, these are being treated as grant and amount paid is being treated as salary expense.

I am still clueless if this has to be paid on 7th Jul or 7th Aug.

Request to you if you can clarify above in detail.

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@VaibhavJ

@VaibhavJ (Expert)
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15 July 2014 Hi,

In this case TDS is borne by State govt.

Due date for TDS on salary is within 7 days of next month from the date of actual salary payment to employee.

So if salary is paid on 7 June due date for TDS deducted on it will be 7 July.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2014 So the TDS on salary has to be deducted on payment basis.

Is this understanding correct ?

However, for last quarter the period will be covered Dec 14 to Feb 14 (payment period Jan 15 to Mar 15). And, TDS on Salary for March will be considered in next financial year.

Further, Form 16 will have an issue as period of employment will be from Mar 14 to Feb 15 instead Apr 15 to Mar 15.

@VaibhavJ

@VaibhavJ (Expert)
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16 July 2014 For your first Qn ans is Yes!

For 2nd query dont mix up income to nbe shown under form 16 & TDS payment.

Form 16 is issued for financial year only!!

Though due date of TDS for Payment made on April 7 is May 7, E-TDS app of NSDL very well allows its inclusion while filing E-TDS return & you can very well include TDS deducted in your Form 16 generated for FY 2013-14.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2014 Thanks a ton for your help.

@VaibhavJ

@VaibhavJ (Expert)
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16 July 2014 Thanks for acknowledgement.

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