16 April 2009
Some employees have resigned during the month of Feb-Mar, 09. Their final settlement will be done in the month of May,09. The books are closed in the month of 30th April.
How the TDS of the employee will be deducted? Will it be deducted in the next year when he was not the employee of the company and form 16 after the adjustment of FFS will be given in the next year taking only FFS amount payable? Further we can’t take in the previous year in which he has resigned because the PF amount will be determined only at the time of FFS
16 April 2009
Section 192 TDS on salaries clearly states that the TDS has to be deducted at the time of payment of salary.
Therefore the day on which you pay full and final settlement the TDS will apply.
Eventhough they resigned in earlier financial year, you can treat them as employee of next financial year also when paying the full and final settlement for the purpose of pf, esi, gratuity and tds.
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