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TDS Salary

Ulaganathan (Accounts) (31 Points)

03 March 2008

Dear All,

Recently one employee joined in February. Previously he runs on his own business. He is saying april to january there no income. but he invested 80C 1 Lac also paying housing Loan regularly. In this case how to calculate TDS ? Whether Prorata basis (Average system) of not.

Please revert

Nathan

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9 Replies

M.Sriram Shenoy (CA Final) (814 Points)
Replied 03 March 2008

Mr.Ulaganathan. Relax!!!.If salary of an employee exceeds the maximum amount not chargeable to tax and such employee discloses investments or other expenditures which qualify for chapter VI A deductions, which inturn can bring his tax liability to NIL, then there is no need to deduct TDS for the employee.

Depending upon the information provided by you, i dont think so, that you need to deduct TDS for your employee as he can show amounts upto Rs.100000 which qualify for 80C deductions.Moreover, he wont be earning huge salary to be liable for TDS in this 2 months even after showing such huge deductions.

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(Guest)

I would like to registr as to know more and put my own quiries into the subject

CA. Kirti S. Ganatra (Service) (1461 Points)
Replied 04 March 2008

Salary Income - 80C =if more than 1.1 Lakh deduct TDS other wise nil TDS

O.D.SHARMA (DGM-F & A) (1734 Points)
Replied 05 March 2008

Business income+salary( Feb & March)-deductions=tax is applicable.

CA Dushyant Maharishi (CA) (178 Points)
Replied 06 March 2008

I think in this case there is no need to deduct tax if the salary does not exceed the maximum exemption limit for the two months & also the employee has make the investments in the 80c hence i think there is not much income provided that the business income for the April-Jan is as you said is not much or nil.

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Arpit Jain (management trainee) (26 Points)
Replied 08 March 2008

If and only if employee chooses to furnish the details of other income to his employer in writing, the employer can take such income into consideration for the purpose of TDS u/s 192, otherwise employer is not liable for TDS in respect of such income.

(Guest)

I joined company on Ist Apr' 07, and as of now I am not confirmed by the very organization. As per the joining letter which speaks about six month probation period and can also be extended upto further six months, I fall under the category of the further six months. As of now I earn 15k per month every month, and I don't fall under any deductions. My finance manager asks me about my LIC details and informed me that he will deduct TDS from my salary.

My question is whether I am eligible for TDS in the persent context, given that I am not yet confirmed then why should I pay TDS for? Please guide.

Gopal (Consultant) (20 Points)
Replied 02 May 2008

Hi I have started deducting the TDS for the employees from April onwards and they are protesting what does the rule says

Anuraag Sharma (Sr Executive Finance) (845 Points)
Replied 03 May 2008

@ harsh. . .

hiii c u hv earned a salary contributing 2wards the Total Income. . .sp if your Total Income is more than the tax exemption limit than you have to deduct TDS , no matter that you are permanent or nt in an organisation. ...as u r earning the Income from wtever source it is

also u hv to show all other Incomes u hv n the investment u made under sec. 80C or others. ..