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Salary tds

Vikash Agarwal (Student) (104 Points)

27 February 2013

as per section 192 tds is deducted on salary at the time of payment. so in case of march salary it will be paid in the month of april. Should this salary will be considered for next year because the salary is paid in april and tds sould be deducted as per next assessment year as per that

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7 Replies

CA Raviteja (Risk Management) (585 Points)
Replied 27 February 2013

Dear friend, you must remember the basic rule of Income tax: Salary is taxed on accrual or receipt basis, whichever is earlier. Hence, march salary is accrued on 31st march XX. Hence, even it is paid in April XX, it pertains to FY year ending March XX. TDS for march salary will be deducted on March 31st only. However, it will be paid in April. So, accrual concept applies here....

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Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 05 March 2013

Mr Raviteja, as per section 192 TDS shud be made at the time of making the payment. So for march salary whihc is paid in april how can we deduct tax in march. I think it shud be deducted in Apr while making the payment.

Santosh Mishra (AM) (1135 Points)
Replied 05 March 2013

Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2012-13. The income-tax is required to be calculated on the basis of the rates given above subject to provisions of section 206AA of the Act and shall be deducted at the time of each payment.

Yes, Sec 192 says income tax is required to be deducted at the time of payment but please note TDS would be deducted as per the tax provision of related year.

In your case tax can be deducted in April but it would be deducted as per the provision applicable for previous year ended in March( because income related to previous year) and such TDS can be remitted by 7th of May

CA Raviteja (Risk Management) (585 Points)
Replied 05 March 2013

Yes, Mr.Giridhar. TDS is deducted at the time of payment. In this case, where salary of march is paid in april, even though TDS is deducted in next FY (April), it relates to previous year only.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 05 March 2013

Yeah that's ok. But TDS for month of march will be deducted in april only if payment of salary is made in april itself and TDs to be remitted to govt on or before 7th May. If payment made on teh last day of march then TDS would be made in march itself and paid on or before 7th of april.

But while filing the TDS return for March quater we would be required to show the TDS for march salary in march quarter only. right?

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Mihir (Wealth Manager) (5293 Points)
Replied 05 March 2013

General practice is first recording the liability toward salary payable to employees for the month of march in the month of march itself. And then salary actually paid will be entered in the month of april which will cancel out the liability. This way TDS provision has been created in march and actual payment made in april is also in line. There is nothing wrong in creating an outstanding liability vis-a-vis salary payable to keep TDS provision in order.

CA Raviteja (Risk Management) (585 Points)
Replied 05 March 2013

Originally posted by : Giridhar S Karandikar
	Yeah that's ok. But TDS for month of march will be deducted in april only if payment of salary is made in april itself and TDs to be remitted to govt on or before 7th May. If payment made on teh last day of march then TDS would be made in march itself and paid on or before 7th of april. But while filing the TDS return for March quater we would be required to show the TDS for march salary in march quarter only. right?