Ajay s (Accounts Officer) (243 Points)
29 September 2011Dear All
How Tds @ 20% is applicable on salaries and on what basis tax to be deducted
For Eg:- One employee is drawing monthly salary of 19000/- having no PAN
Which is the right option to deduct tax
A)19000*12= 228000 - 180000 =48000*20% =9600*3%=288 so total 9888/12 =824pm
B) 19000*20% = 3800
A or B is applicable ?, pls explain
Jayesh
(Internal Auditor)
(214 Points)
Replied 29 September 2011
Option A is right. However, rate must be 10%(as per slab). Why are you applying 20%?
Ajay s
(Accounts Officer)
(243 Points)
Replied 29 September 2011
Am not agreeing with you jayesh , pls read my querry fully
If employee has not furnished his/her PAN no. then TDS will be deducted @ 20% which is higher than the apllicable rate of 10% in the present case. This is as per section 206AA.
Methodology A sholud always be followed for deducting TDS from salaries as tax is chargeable on "estimated net taxable income" after providing for all the allowable deductions under sectoin 80C, 80D, PF, etc. whichever applicable.
Jayesh
(Internal Auditor)
(214 Points)
Replied 29 September 2011
Hey Ajay, m sorry, 20% rate is correct (since PAN is not available). But still, option A would stand correct.
RAKESH SAH
(Senior Executive (Finance & Account))
(115 Points)
Replied 29 September 2011
Option A is right.
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 29 September 2011
My Dear friend , option( A) is always followed,if PAN number is provided....as per normal rate of tax....u should also considered,deduction of sec80.....
Option( B) is followed when no pan is provided...ie...Rate is 20%....
agree with,Mr Ravi.......
ARUN KUMAR
(Financial Consultant )
(992 Points)
Replied 29 September 2011
20% rate correct when PANNOTAVBL
vikas Agarwal
(Article & Ca Final Student)
(125 Points)
Replied 29 September 2011
Option A Is Right
& 20% Tds rate Used When PANOTAVBL
Ajay s
(Accounts Officer)
(243 Points)
Replied 29 September 2011
Dear All
All of you are telling Option A is correct but I think Option B is correct
Y because in E-TDS return u have to mention Higher Rate 20% on salary
If Option A is taking his salary should be 4120/- only accordingly 20% is 824
CS Bijoy
(Expert)
(6394 Points)
Replied 29 September 2011
In all case when PAN number is not provided the rate of TDS will be 20% as explained by Ravi thapa....
Ajay s
(Accounts Officer)
(243 Points)
Replied 29 September 2011
If u r telling option A is right
what is his gross salary ? that X 20% should be 824/- in e-return
CAclubindia
