+2 Others

Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network
Hi, What is % of tds to be deducted on Incentive ? I find tds being deducted up to 40 % on my salary slip. Kindly let me know if it is legitimate. Regards Vishali
From India, Mumbai
Dear Vishali,
Incentive has to be treated as salary. And at what percentage they are deducting it is totally dependent on your salary bracket.
For eg if ur salary is
6 lakhs it would be deducted at 30.60.
5 lakhs it would be 30.60
4 lakhs it would be 20.60 so on.

In case if you get it in the middle of the year you are going to be deducted at the highest rate, after taking into consideration into which salary bracket you are falling.


From India, Pune
Dear Swathi & Vaishali,

As you are aware, the tax at source for salary gets deducted at the average rate. However, the incentive pertaining to the financial year may be paid during the year based on the performance criterion. Since this incentive is based on performance, it may not have been considered while calculating the average rate of TDS. Hence, once such incentives are paid, 2 points need to be considered

1. TDS shall be applied upfront on such incentive
2. If any impact is on the average rate of TDS, it needs to be taken in to account (e.g. impact of surcharge)

Example: If the taxable salary of the person is Rs. 3,50,000 for the average rate of TDS. The total yearly tax is Rs. 25,750 (Rs. 25,000 tax plus Education cess & SHE of Rs. 750). This tax will be deducted at source monthly at average rate i.e. around 2146 per month. Now if the employee is paid Rs. 1,00,000 incentive in the month of July 2008, TDS on the same will be Rs. 20,600 (Rs. 20,000 Tax plus Education cess & SHE of Rs. 600). This TDS will be in addition to the monthly average

Hope this had clarified your query.


From India, Pune
hai this anji please tell how much percentage will deduct on incentives for example monthly insentives is 25000/- how much percentage tds deduct in this amt anji 9395116326 hyd
From India, Hyderabad
It is linked to your total taxable salary. If it exceeds 8 lakhs, deduction will be 30% plus educational cess, etc.
From India, Lucknow
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2020 Cite.Co™