Suman Khurana (ACS) (209 Points)
28 July 2009Hi
Please tell me how we calculate TDS on Salary through an Example also.
Further guide me that if the employee resigns from the Company during the month of June then in that case how we calculate how much TDS is to be deducted from his salary for settling his Full and Final.
Regards
Hinna Garg
siddh
(Article (Final Result waited))
(391 Points)
Replied 28 July 2009
we have to assue whole year salry according to salary paid to him and have to deduct tds
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 28 July 2009
Hinna
As siddh says that you shuld deduct TDS on the cuurent salary month wise. Like an example Toatal salary payable to A is 40000 Per month . So his salary for 12 month is 480000 ( Dont consider any increment which may be given during the month OR any one time payment to such emplyoee which is not given to employee but may be given at ant time during the month OR it means for the computation of tax consider onty that part of salary which is given to employee) So calaute tax of employee i.e. Rs. 52530 for full year & 4378 per month . So deduct Rs 4378 on monthly basis.....................
And about when employee leaves the company and at the time of full & final settlement deduct TDS on all taxable amount.
May be sometimes at time full & final employee claim some part of salary as a non taxable like MEDICAL REIMBURSMENT or LEAVE ENCASHMENT then dont consider that amount on such part of salary & deduct TDS on higher which is applicable to such employee.
Like in case of A , his higher rate of TDS is 20% then deduct TDS @ 20%.
Hope now you are clear abt that.
CA. Megha Topiwala
(Job)
(1534 Points)
Replied 28 July 2009
d said explaination is given by Mr. Sorabh is coorect....
Suman Khurana
(ACS)
(209 Points)
Replied 03 August 2009
Hi
One more thing i want to know that in the beginning of the Financial year i.e. FY 09-10, employees are asked to give the details of their investment plan for FY 09-10 and on that basis we calculate TDS.
However supporitngs for their investment plan are submitted by employees by the end of FY 09-10.
So while doing Full and final of any employee, who resigns in the mid of FY 09-10, we need to take into consideration the investment plan details provided by concerned employee, even if required supportings are not provided by him, for calculating tax for Full and Final Settlement.
IS THIS OK?
Regards
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 03 August 2009
Hinna
At the time of full & final , ony that much amount wuld be consider, of which he/she submitted the proof of investment to you. Otherwise then no amount shuld be consider on the basis of declaration OR in other words nil amount shuld be consider at the time of full & final if concerned employee doesn't submit the proof/supporting.
Hope there is no doubt about that
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
