Queries
1. TDS on salary to employee
a. What are advantages and disadvantages for Employer.
b. What are advantages and disadvantages for Employee

2. TDS on perks to employee
a . What are advantages and disadvantages for Employer.
b. What are advantages and disadvantages for Employee

3. GST ?on perks to employee
a . What are advantages and disadvantages for Employer.
b. What are advantages and disadvantages for Employee
4. IS perks given to sales team Exempted from TAx?

17th August 2017 From India, Bangalore

PARTICIPATING IN DISCUSSION:
Dinesh Divekar
Business Mentor, Consultant And Trainer
Saswatabanerjee
Partner - Risk Management
Rakeshrch
Consultatnt
+1 Other

Dear Rakesh,

It appears that you have some misgiving on the Tax Deduction at Source (TDS). Tax deduction is a compulsion and not a choice. If TDS is mandatory then where is the question of advantages or disadvantages to the either party? For timely deduction and further submitting the IT return, the employee has advantage by not getting notice from the IT department. Second advantage of timely payment is not required to pay the penalties. There are advantages to the employees also. When employer deducts TDS, at the time of filing of IT return, employee can take input credit for the amount that employer has deducted.

Secondly, TDS is on the gross salary. Thirdly, if the perks given to employee exceed Rs 50,000/- per month then it attracts GST.

Thanks,

Dinesh Divekar
17th August 2017 From India, Bangalore
Thank you for clarification Mr Dinesh.
Few more clarification on the same
1. Do the TA given to sales or any other Employee is tax exempted? Is there any limit
2. What happens to the following given perks given to senior executives/VP/Dir/MD/CMD?
Mediclaim
Mobile Expenses
Landline & Internet Expenses
Fuel Expenses
Travel Expenses
Vehicle Maintenance Expenses
News Paper & Journal Expenses

Is it tax exempted ?Is there any limit to it?
3. GST - as clarified it is above 50k, so does it includes the regular tax on perks (if deducted) and on that GST?
17th August 2017 From India, Bangalore
I think you better speak to the CA in your company or to your company's auditors. You are completely confused in all matters concerning tax.

As for GST, it does not apply on any employee related payments - ie - any payment made by employer to employee in course of employment
18th August 2017 From India, Mumbai
OK, Thanks
Is it fine if I reach you over your number?
18th August 2017 From India, Bangalore
Dear All,

AS per Schedule III of the Central GST Act, 2017, services by an employee to the employer in the course of or in relation to his employment will not be treated as supply of goods or services. Thus, the salaries and other allowances that are paid by the employer to the employee, as part of the employment contract are outside the purview of GST. Also, all reimbursements of expenses incurred by employees, in the course of their employment, would be outside the levy of tax under GST.

The employer and the employees are deemed to be ‘related persons’, in terms of Section 15(5) of the CGST Act. As per Entry No.2 of the Schedule I to the CGST Act, supply of goods or services or both between related persons when made in the course or furtherance of business would be subject to levy of tax under GST even when they are made without consideration.

Moreover, as per Schedule I, gifts exceeding Rs 50,000/- in value in a financial year by an employer to an employee shall be treated as supply of goods or services or both.

Experts in GST can add more value to this subject. But in future HR will be required to restructure the CTC based on GST compliance taking guidance from experts.

Thanks & Regards,

S K Bandyopadhyay(WB)
USD HR Solutions
+9198310 81531

18th August 2017 From India, New Delhi
Thank you for the clarification about the GST.
18th August 2017 From India, Bangalore
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