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Tds query

Sireesha Gorti (Sole Proprietor) (174 Points)

01 November 2012

Hi,

I am looking after the accounts of our client and in this regard i have some query relating to calculation of TDS of individuals/staff of the Co.

It is :-

As per sec 192 of IT Act, tax should be deducted when the payment is made.

But, some staffs of my client is on leave without pay for 2 months.

So, kindly advise me whether i should calculate their TDS on the bases of 10 months or i have to pass the provisional entries and calculate TDS for 12 months

Thanks

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4 Replies

Yogesh Kumar (Job) (180 Points)
Replied 01 November 2012

TDS should be deducted on average basis during the year and at the end of the year if there is fluctuation in the taxable income of the employee you can recalculated the amount of the TDS and now if he no more liable for futher TDS then no TDS should be deducted. But the TDS should be on average basis form the point you caculate the TDS till the end of the month and it will not be effected by the leave taken up employee.

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CA Saroj Kumar (Keen to learn something new every moments) (2588 Points)
Replied 01 November 2012

At the beining of the year u have to calculate TDS on provisional basis. and tds should be deducted on average basis. If the employee on leave u may recalculate the tds and deuct accordingly.

Yogesh Kumar (Job) (180 Points)
Replied 01 November 2012

now in this case we have to see that whether salary has been given to employee for the period for which he is on leave, if yes u have to deduct tds at the time of payment and if no, then no TDS since you are not paying anything.

So you can recalculate the amount of TDS and deduct accordingly.

But practicaly the TDS will deducted on average basis on the basis of the Saving decleratation given by Employee and contiue to deduct in the same manner at the time of payment but this situation may create a situation where TDS can deduct more than required.