Ramesh (Audit Manager) (111 Points)
18 December 2012Hi frnds,
I want to know the standard procedure for calculation tds on salary for any assessment year. whether it is based on salry or it is based on gross total income to be taxable. please tell me the procedure to calculate or give me tds calculator on salary in excel
Regards
D.Ramesh,
Article student
Harish
(CA Student)
(568 Points)
Replied 18 December 2012
TDS on Salary is dealt in sec. 192 of IT Act orf 1961. According to which Employer can deduct tds only on salary income and not on any other income. Hence, Salary income alone will be considered for Deducting TDS.
Whereas at the time of issuing Form No.16, apart from salary income, remaining all income heads, deduction details will be taken into account. This is how TDS on Salary procedure followed by most of the organisations.
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 24 December 2012
TDS on Salary is computed on an average basis as per the slab rates depending upon the tax bracket in which the asessee falls. While computing the TDS on salary if there's any home loan going on then the interest portion of the EMi would also get deducted from the taxable salary. Also deductions under Chapter VI-A would be considered.
For instance if you total taxable salary is say Rs 5lacs. Interest on home loan come to Rs 1lacs. Deductions u/s Chapter Vi-A comes to 1lacs, then your taxable salary would be Rs 3 lacs. Now total tax liability on Rs 3lacs would be computed, say if it comes to Rs 35000. Then 35000 would be divided by 12 and from each months salary TDS would be made. The TDS however changes due to the additional investments made by the assessee. So accoridngly Taxable salary would again be calculated and TDS would be made on monthly basis.
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