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Sole prop firm have turnover of 30 lakhs needs to pay tds?

ravi (owner) (30 Points)

31 January 2016

Hello

Thanks for such a informational forums. Please anwser below questions.

1. Do a sole properitorship firm established in oct 2014 i having turnover of 30 lakhs and paying employees salary aboved 2.5 lakh per year needs to pay tds?

2. If he needs to pay TDS do he needs TAN Number?

3. Can TDS be paid yearly same as income tax?

4. If TDS will be paid it will be calculating including employee invesment?

Thanks again.

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4 Replies

Namit chhabra (CA-Final) (141 Points)
Replied 01 February 2016

TDS on salary is to be deducted if salary to an "individual employee" is exceeding Rs.2,50,000.

If salary to individual employee is not exceeding this limit, then no need for deduction of TDS as per section 192. For calculating this limit, also consider any tax saving investments done by the employee, i.e which are claimable u/s 80C.

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Shivani Mittal (Practice) (425 Points)
Replied 02 February 2016

Hi Ravi,

I am assuming that turnover of Rs. 30 lakhs is from business and not profession. In such a case, there is no liability to deduct TDS. Sole proprietorship is the same as individual assessee as per income tax act. Hence, responsibility to deduct TDS and related compliances are applicable to individual only when such assessee is subject to tax audit during the previous year or any preceeding previous years.

If above mentioned criteria is not satisfied, then it doesn't matter even if the assessee pays salary of more than Rs. 2.5 lakhs to any of his employee.

Regards

CA Shivani Mittal

ravi (owner) (30 Points)
Replied 02 February 2016

Originally posted by : Shivani Mittal
	Hi Ravi, I am assuming that turnover of Rs. 30 lakhs is from business and not profession. In such a case, there is no liability to deduct TDS. Sole proprietorship is the same as individual assessee as per income tax act. Hence, responsibility to deduct TDS and related compliances are applicable to individual only when such assessee is subject to tax audit during the previous year or any preceeding previous years. If above mentioned criteria is not satisfied, then it doesn't matter even if the assessee pays salary of more than Rs. 2.5 lakhs to any of his employee. Regards CA Shivani Mittal

Hello Shivani Mittal g,

Yes, turnover is from sole properitor business. I assume tax audit is required if turnover of sole properitor business is greater than equal to 1 crore.

Thanks