Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Help about TDS deduction

Sharad Gupta (Sales Head) (36 Points)

22 October 2011

Sir, can a sole properitorship firm deduct tds from his employes salary, if yes, what is the processedure to follow, what rates are applied.

Reply
Follow
Share

12 Replies

valji (Accounts manager-MBA) (2150 Points)
Replied 22 October 2011

rate is taken after the deduction of all benefit 80ccc & under sec 10 as specified slab by income tax

Upgrade to CAclubindia Pro. Subscribe Now!

Phalgun (Audit Manager) (327 Points)
Replied 22 October 2011

As per section 192 any person responsible for paying income under the head salaries has to deduct TDS after providing for basic exemption limit as applicable under relevant finance act. Deduction is to be made at the time of actual payment

AVTAR SINGH (Expert) (1873 Points)
Replied 22 October 2011

Hi Sharad,

Yes Every person including Sole Prop. who is making payment of Taxable Salary, is liable to deduct TDS from salary. The employer shall give deduction on account of section 80c, 80 D etc.

The TDS will be deducted monthly from salary by taking average amount of TDS..

Manoj kashera (Articleship) (64 Points)
Replied 22 October 2011

agree with Avtar singh

Vikas (Chartered Accountant) (162 Points)
Replied 22 October 2011

For this You should have TDS no. and after u deduct u have to file ur quaterly tds return as per the law.

Upgrade to CAclubindia Pro. Subscribe Now!

Hardik Patel (B.Com, CA Final) (158 Points)
Replied 22 October 2011

If he is covered under audit and if he pay any salary to his employee which exceed the maximum amount not chargeable to tax, then he should required to deduct tax from salary after considering his various investment.

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 23 October 2011

Agree with all above....

TDS is deducted after deducting basic exemption....slab exemption...and deduction of chapter vi-A...80C..AND other deduction available to individual assessee.....

then tax calculate and divide by 12....and deduct tds..each month...

Refer to sec 192 of it act...for detail....TDS ON SALARY....

Sharad Gupta (Sales Head) (36 Points)
Replied 23 October 2011

If someone get 20000 total salary, including basic, ta, da, with various deduction, the total salary is for tds or which insstrument or allowance not treated as income tor tds... Thax for previous sugessions.

CA. Anubhav Jaggi (CA) (104 Points)
Replied 23 October 2011

A sole proprietor is not by default liable to deduct TDS.

He becomes liable if he met the criteria of Tax Audit u/s 44AB. i.e Turnover of business exceeds Rs.60 Lacs or Gross receipts of Profesion exceeds Rs.15 Lacs.

In that case he also needs to maintain proper books of accounts u/s 44AA, and Tax Audit u/s 44AB also to be conducted.

Saket Sinha (Student) (129 Points)
Replied 24 October 2011

Proprietor is not liable to deduct TDS until and unless he is subject to tax audit u/s 44AB of the Income Tax Act,1962

Upgrade to CAclubindia Pro. Subscribe Now!

sadashiv Rupchand Gaikwad (Proprietor) (521 Points)
Replied 29 October 2011

TDS is applicable to the artificial person or sole properiotor under whose turnover is attract tax audit.All salary exemption are considered,excepect donation to private charitable trust.

Gaurav Khatter (Chartered Accountant) (58 Points)
Replied 04 November 2011

TDS provisions in case of an individual is applicable if the individual is liable for audit u/s 44AB in the previous year. only then the provision of TDS is applicable in the current financial Year.

The procedure for deduction of TAX u/s 192 is simple. You need to calculate the tax of the employees after considring deductions under chapter VIA on provisional basis. For this you can take Tax saving Investment details (like u/s80C, 80D, 80E etc. housing loan interest) from the employees and calculate the tax payable of each individual employees. and then deduct the proportionate tax from their salary on monthly basis. During January you can take the copies of actual tax saving documents and then you can finalise the tax liability of the employees and accordingly deduct the tax in the month of Jan, Feb and Mar.

Thanks and regards,