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TDS on salary

Tejas Gandhi (143 Points)

11 April 2019

if I m paying salary of 3,60,000 viz Monthly 30,000=00
how I supposed to deduct TDS & at which Rate

please advise

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5 Replies

Debolina Sahu (student) (278 Points)
Replied 11 April 2019

For FY 2018-19, If any investment declaration u/s. 80C of amount 60K or more no need to deduct TDS.

For FY 2019-20, no TDS liability for the salary income upto 5.0L

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prasad Nilugal ( GST Practitioner & Accounts ) (14574 Points)
Replied 11 April 2019

Your yearly salary is 360000/-

Nil Tax up to 250000/-

Your estimated taxable Income 110000/-

5% Tax on 110000/- 5500/- ( 5% Tax between 250000/- to 500000/- )

so divide 5500/- by 12 months 460/-

Your monthly TDS will be 460 /- per month

Above mention is estimated tax (TDS) on average basis .

please confirm with others also .

1 Like

Arif Malique (19 Points)
Replied 11 April 2019

87A is now updated to tax liability 12500. so no need to TDS

Puja Sharma (CA) (433 Points)
Replied 11 April 2019

The rate at which TDS to be deducted on Salary is not fixed. TDS is deducted according to the prevailing Income Tax Rate for that Financial Year.

The rates of Taxes also depends upon the age of the individual. If the person is 60 years or more then there are separate Tax Rates.

The simple formula to calculate tax in your case is:

Total Salary ___________

Less: Exempted allowances of salary ___________

Taxable Salary ____________

Less: Deduction u/sChapter VIA ____________

Total Taxable Income ____________

You can refer to the below link for the prevailing Income Tax Rates.

https://www.incometaxindia.gov.in/Pages/charts-and-tables.aspx

1 Like

Sarath Chandra (CA Final Student) (566 Points)
Replied 11 April 2019

There's is no flat rate of TDS on salaries. Tax has to be calculated estimating for the whole year based on the prevailing slab rates and then divide by 12 to arrive at monthly TDS amount.

For FY 2018-19:

If the employee is below 60 years of age, then the slab rates are as follows:

Taxable Income	Tax
0 - 2,50,000	0
2,50,001 - 5,00,000	5%
5,00,001 - 10,00,000	20% + 12,500
10,00,001 and above	30% + 1,12,500

If taxable income after all deductions under Chapter - VIA is below Rs. 3,50,000, then tax rebate of Rs. 2,500 is available u/s 87A. Otherwise, tax has to be calculated as follows:

Taxable Income = Rs. 3,60,000

Taxable Income	Tax
0 - 2,50,000	0
2,50,001 - 3,60,000	5%

Tax = (3,60,000 - 2,50,000) x 5% = 1,10,000 x 5% = Rs. 5,500

Tax has to be increased to Health & Education Cess @ 4%

Total Tax = Rs. 5,500 + (4% x 5,500) = Rs. 5,500 + Rs. 220 = Rs. 5,720

TDS to be deducted per month = Rs. 5,720/12 = Rs. 477 (approx.)

For FY 2019-20:

Sec. 87A is amended in FA 2019 by increasing the threshold to Rs. 5,00,000 and rebate to Rs. 12,500. So there will be no tax if income is below Rs. 5,00,000.