calculation of TDS on salary for the A.Y. 2010-11

Basic- Fully taxable

HRA- Fully Taxable( Provided any rent is not paid)

Conveyance- 6200( Assuming It is transport allowance)

Bonus Fully taxanble

Deduct any investment made as per 80C

Add above and apply tax slab rates

T.D.S on salary is deducted on the assumption basis.While making the payment of Salary, deductor should consider the following and deduct correct TDS from the payment being made.

1. Calculate the annual Approximate/Actual Salary
   1. Calculate the Exact Taxable Salary amount Paid/Payable till current month for the financial year.
   2. Calculate the approximate salary that will be paid for rest of the FY, assuming the current month salary for rest of the year salary.
2. Add any other income reported by the Assessee [Employee].
3.  Deduct if any Loss declared by the Employee, from the annual taxable salary. Note that, only House property loss (interest in case of Self Occupied House Property) should be considered.
4. Deduct the allowed deductions declared by employee under Section 80C, 80D, 80G, etc.
5. Calculate the Income Tax, Surcharge and cess on the net Income, as per the “Rates in Force”
6. Deduct if any rebate U/s 88E or Relief U/s 89. (explain the heads)
7. Keeping it as total tax, now deduct the TDS made till last month from it.
8. Divide the net TDS by “Remaining number of months in the FY, including current month”.
9. Deduct this amount from employees Salary

Basic-fully taxable

HRA-fully taxable if no rent is paid

Conveyance- if it is transport allowance, Rs.800 per month is exempt. If it is for conveyance actaul expenditure is exempt.

Bonus fully taxable.

Calculate GTI per anum

total tax/12 is tds to be deducted every month

The above example is for which A.Y

u can apply it for any A.Y as tax rates are not yet applied for that example

Taxable Income:

(A) Basic = 70000*12

(B) HRA = 21000*12 (if he/she is living in his own house & not in rented house)

OR

(B) HRA = if lives in rented house and pays rent, then least of the following * 12 months

252000 OR 40% of Salary OR Actual Rent paid - 10% of Salary

252000 OR 50% of Salary OR Actual Rent paid - 10% of Salary

(Here Salary = Basic + DA if considered for retirement benifits + % based comm. on turnover)

(C) Conveyance = 6200 * 12 (if transport allowance) otherwise 7000*12

(D) Bonus = 70000

(E) Total (A) to (D) LESS (i) P.T. = 200*12

The (E) will be Gross Total Income provided the employee has not reported to employer any other income or loss from house property.

(F) Net Taxable Income = Gross Total Income LESS (i) PF = 780*12 (ii) allowable deduction under chapter VI-A, if any

(G) On (F), apply the slab rate whichever is applicable to the assessee and find the tax.

(H) Thereafter, what-so-ever figure comes under (G), divide it by 12 months and the resulting figure will be the amt. of TDS per month from the salary of the said assessee.

Agreed with above answer

yes, i agee..

pls. forward annual return form in excel format at my email id thks

thanks

Please check this excel file. This will be helpful for you. It is free download.

if assesse is having GTI of 500000 & have contributed 50000 in LIC & is supposed to contribute 50000 more in the LIC in the next month then for deducting tds of this month whether to consider deduction of only 50000 or 100000?

we have to calculate the tax liability of the employee after claiming deductions under section 80.

then we have to make TDS on average ie., tax liability/12 months