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TDS Deduction - Professional Tax

vasanthig Started The Discussion:

I want to know how can I deduct TDS in salary if the employee works only for 8 months? Employee is a female person. Kindly let me know normally when can I deduct TDS? Am I have to deduct TDS every month or Quarterly or Half-Yearly or Yearly?

vasanthig - Contributing Member
Thanks for your immediate input. If I forget to deduct on monthly basis, am I able to deduct the same annually? Is it wrong?

Also I want to know how to deduct Professional Tax? By monthly or half-yearly or Yearly?

vishwa2 - Contributing Member
Hi,

If you have missed out to deduct earlier, you can make the deduction now. However, what is important to note here is you have to make estimated salary for full year(Actual salary paid so far + projected salary for balance part of year) an arrive at annual income tax liability and devide the liability by number of years that are there ie., 4 months if you are going to start from this year.

Hope this clarify the first part.

For Professional tax, you will have to deduct on monthly basis and remit to your prof. tax authorities as per local law.
rgds
vishwanath

vishwa2 - Contributing Member
Hi,
Attachment has an example of computation of Income. I have picked up the same from this site.

It may give you idea of how to make computation. Also find enclosed a Circular issued for Income tax dept last year pertaining to TDS salary. Hope this mayhelp you.

Rgds
Vishwanath


Attached FilesProvided by community member vishwa2. Join us to learn and grow with your peers.
File Type: pdf tdscircular2006-07_30112006_162.pdf (530.3 KB, 1139 views)
File Type: xls tds_2007_08_160.xls (21.5 KB, 1207 views)
maddy_6030 - Contributing Member
Hi Vasanth,

It is better if you deduct TDS every month.

To know TDS calculation, please find the attachment. It will definately help you, has it is very easy to calculate using this simple software.

rgds
Madhu


Attached FilesProvided by community member maddy_6030. Join us to learn and grow with your peers.
File Type: xls taxcalc_2008_105.xls (185.0 KB, 871 views)
maddy_6030 - Contributing Member
Hi Vasanth,

And since you need to calculate it for female, in my previous attachment, please move towards right of the sheet "IT 2007-08" & change it to "Female".

For your information i am attaching the file again.

rgds
Madhu


Attached FilesProvided by community member maddy_6030. Join us to learn and grow with your peers.
File Type: xls taxcalc_2008_107.xls (185.0 KB, 331 views)
vasanthig - Contributing Member
Our is a IT company and they may review in every three months. So the salary of a person may increase based on their performance say either within three months or six months. So I can't do the calculation for the whole year based on the salary what they are earning now. It may raise over a period of time. Because of that only I didn't deduct the TDS every month. I plan to deduct only at the end of the financial year. Is it wrong? Let me know that if it is wrong.

Vasanthi

vishwa2 - Contributing Member
Vasanthi,

To comply with Income tax laws, it is employers responsibility to ensure that all employees tax liability is properly estimated and deduction has been made monthly based on such estimation.

Assume you have not complied with such provision, it will be a non compliance for which the disbursement officer is accountable.

Further, all employee salary information should be provided to Income tax deparment by the way of e filing of salary return with respect to employees who are under tax braket.

I assume you have some portion of salary as fixed component and some portion is variable component. You may be finding difficult to estimate variable component. However, you will have to estimate the fixed component and arraive at tax liability.

You have all detail of actual payment of salary paid from April 2007 to till date. Add fixed component of salary payable for December to March 2008 (on the assumption that he will be on your rolls). Make tax computation and made the TDS. Take due care of their Investment declarations and Housing loan related exemption and deductions available under Income tax Act to arrive at net tax liability.

Rgds
Vishwanath

vasanthig - Contributing Member
Vishwanath,

Thanks for your input. We have fixed and variable component in salary break up. But the variable component is only allowances. Fixed part will be the basic salary, hra, conveyance. If we give any increment then the fixed component will affect right? In that case as per your saying I have to calculate the tax for the existing salary and if there is any increment happened then I have to amend the tax accordingly right?

Kindly clarify am I correct or not?

Vasanthi

vishwa2 - Contributing Member
Vasanthi,
You are right.
It may not be too complicated if you have some simple payroll application which takes care of tax computation on its own.
Incase you need any clarification feel free to contact me on 09845358280.

rgds
Vishwanath

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