08 June 2012
I was just going through the TDS Rate Chart & found out that TDS is to be deducted on Salary at the "Average Rate" . What does this Average Rate mean . Can you please explain in detail ?
Is TDS also deductible on Salary that has not actually been paid but is Payable (Accrued) ?
08 June 2012
Compute the estimated total income of the employee for the whole year. Compute the tax liability on such estimated total income. Tax liabilty/estimated total income is the average rate.
TDS is to be calculated on a monthly basis using this average rate.
08 June 2012
What are the provisions for penalty in case this TDS has not been deducted monthly ? Will the Person responsible to deduct be penalized or the deductee ? To what extent ? And ultimately when such TDS is deducted (albeit at a later date) , will any interest be charged on it & at what rate ?
08 June 2012
I just read section 221(1) & it says the assessee will have to pay the amount of tax arrears as Penalty .
So , can we conclude that the total liability will be the amount of TDS not deducted plus interest on it till it is paid .
However , I have a Question . Suppose the Tax payable by the assessee for a particular year was Rs. 15,000 . If his employer had deducted his TDS (say Rs. 10,000) , then he would have had to pay only Rs. 5000 tax for that year .
However , his employer didn't deduct the TDS amount and as a result the employee paid the full Rs. 15,000 as Tax since he didn't have any Form 16A to furnish .
Now ,as we can see the I-T Dept. has got it's full tax from this assesse for that year . Will the TDS STILL need to be deducted & interest paid on it ?? What is the Logic ?
08 June 2012
Who is liable for deduction of TDS...EVERY PAYER.
IF PAYER(DEDUCTOR) NOT DEDUCTED TDS OR SHORT DEDUCTED OR IF DEDUCTED NOT DEPOSITED TIMELY IN GOVT A/C..IS THIS CASE DEDUCTOR WILL LIABLE FOR INTEREST & PENALTY.NOT DEDUCTEE.
RATE WILL BE AS WRITTEN ABOVE... INTEREST 1.5% PER MONTH. PENALTY AS PER SEC 221 OF IT ACT.
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