URGENT :TDS applicability, if salary paid only for 10 days ?

This query is : Resolved

CMA. Subhash Kumar Jha (Querist)
Follow

03 April 2010 Hi,

One of our employee , who was a regular since last 5 years, is going to be relieved on 10 th April,2010. Since the time is less, he has not submitted any investment declaration or actual proofs for FY 2010-11.

His salary is : basic - 35000/- p.m., HRA : 17500/- p.m. & other allowance 5500/- p.m.

Please tell me, how the TDS is to be calculated on this 10 days salary ?

URGENT please...

Subhash Jha

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
Follow

03 April 2010 salary paid only for 10days not exceed the basic exemption limit of rs 160000/- then not require to deduct tds,

kartik_somu

kartik_somu (Expert)
Follow

03 April 2010 No TDS need to be deducted as salary for the period of service in the relevant year is below the basic exemption limit.

Upgrade to CAclubindia Pro. Subscribe Now!

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Querist)
Follow

03 April 2010 Dear friends,

I am getting some different opinion on this issue also.

Some are suggesting that on the basis of estimation principle, I should calculate the estimated salary for the whole year of 2010-11 & deduct TDS proportionately on 10 days salary.

In other words, if the estimated tax for one month is Rs. 1000/-, I should deduct TDS @ 1000 / 30 X 10 = Rs. 333/-.

Can you clarify , what should be the actual position ?

Subhash Jha

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
Follow

03 April 2010 the employee is going to be relieved on 10 th April,2010 is clear,

then i think not require this process,

i you want to deduct tds no problem, you can

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

03 April 2010 If the person being relived is on his retirement then TDS is not applicable. If the person is resigning for better prospectus and you know that he is going to join some other organisation then you have to estimate for full year and then deduct the tds. If the employee who is going to be relived is silent about his future job then get a declaration in rs.20 stamp paper that he has no plans to join a new company in the near future then dont deduct tds on the basis of affidavit. If you can do this then you are discharging your duties as tds officer to the satisfaction of tax authorities.