Hi to all hr people
Can any one pls explain the TDS, how to calculate? 1 employee’s salary is 4000 he is liable to pay esi,pf,pt?
Wt is the meaning of (ESI,pf) Limits? Now Esi limits is 10K? Pls any one give me the reply. Its very urgent,pls pls pls

From India, Bangalore
Sunil Joshi
Human Resources
Sirisha Reddy
Hr Executive
Hr Executive

Sunil Joshi

Hi Ankitha,
TDS stands for Tax Deducted at Source, mainly applicable to salaried employees, professionals, regular vendors (where the total payment is more than 20000/- in a year).
For salaried employees TDS is calculated on the basis of their taxable income, which is arrived at by deducting investments (contribution to PF, NSC, govt securities and bonds, etc) as per income tax act, HRA, reimbursements, etc. The taxable income is then put to the various tax slabs (the slabs change every year with the budget). Currently the slabs are
Taxable income Tax rate
100000 - 150000 10%
151000 - 300000 20%
300000 & above 30%
If an employee is paid a salary less than equal to 10000/- p.m. and the company employs 20+ employees the employee will be subject to ESI and PF.
The contribution is as under
Employee Employer Total
ESI 1.75 % of gross 4.75 & of gross 6.5%
PF 12% of basic 12% of basic 24%
Sunil Joshi

From United States, Bedford
Sirisha Reddy

Hi Ankita,
First you need to divide the salary in to basic, HRA, Transport Allowance, Medical Allowance, special allowance, etc depending on the salary range. Few of these components like HRA, TA, Medical Allowance has some limitations for tax exemption. You can calculate the exempted valve and get the final amount which is taxable. If this taxable amount is more than Rs 100000 (Rs 1,35,000 for women) then you need to ask your employees if they have taken any policies like LIC or invested in any mutual funds etc for which they can claim for tax exemption. After calculating all these, the remaining amount is taxable and you need to calculate it as per the govt norms.
If you say for a person getting Rs4000/- salary, (you have not specified it gross or CTC) as this pay doesn't come under taxable amount, there is no need of any TDS calculation.
Sirisha Reddy

From India, Bangalore
Hi Sunil

I gone through the reply on the TDS structure. The main problem am facing is that in my company there is no provision for contribution to PF, NSC, govt securities and bonds, etc) as per income tax act, HRA, reimbursements, etc. Whatever salary is given to us is having a whole some of the amount after deducting the TAX.

So in that case if a employee is getting a salary of 6000 pm and from this salary the TDS of 10.3% is deducted then the employee is getting even lesser amount of his salary,which states that a PEON is also eligible for Tax deduction from his salary. This thing not at all justifying.

In my offer letter this line is specified.. can u just put some light on the same

"The gross consultancy fees payable to you will be Rs. 6000/- (Rupees Six Thousand Only) per month. Tax as applicable under Income Tax Act, 1961, will be deducted from the consultancy fees."

If this person is not eligible for tax Deduction then what and how i should pursue my employer not to deduct tax from such less amount of salary.

Please reply me as soon as possible.



From India, Mumbai

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