Sr. Hr Manager
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What is the difference between TDS and income tax? For calculating income tax we know the income tax slab for the different salaries(like0-250000 No tax,250001-500000 10%...) But in corporate (IT/ITES) companies are deducting monthly tds from the employee salary here i want to know is the slab rate for TDS deductions its calculated on CTC/NET salary?
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TDS is Tax Deduction at Source. I.Tax is calculated on your income projected and the tax is deducted every month from your salary and deposited with Tax authorities. If there is excess/shortfall in I.Tax, the same shall be claimed or shortfall paid wile filing your income tax returns every year.
Agree with Pon.
Further, IT is calculated on total projected earnings during a financial year. It has nothing to do with Net pay or CTC. As a thumb rule, all the items on the Earning side of your payslip is considered to calculate the Total Earnings, from which various investments as per your declarations (like u/s 80C, 80D, etc) are deducted to arrive at Taxable Earnings.
Dear SR,
I appreciate the views given by Pon & Dixon. But I really do not understand why we don't refer to relevant Act before posting our doubts/queries on this forum. If we find answers to our doubts by ourselves, it will be more satisfying and will get deep rooted in our heart and mind. So my humble suggestion is that pl refer to IT Act first and if any doubt remains, let that be posted on this forum.
I could have made additions to what has been posted earlier. But I am not doing so. I would appreciate if you go through Act and then post your query that remains uncleared.
AK Jain
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