Hi Friends, I would like to understand the income tax compliance a company HR needs to follow. As per my understanding, every year in April an investment declaration is to be taken by the HR from the employees and then accordingly TDS calculated and to be deducted from the salary every month from April onwards.

However, some of the employees are objecting to this and saying "it's too early to deduct TDS. It sounds like the company is forcing to do declaration as early as April and not giving chance to do market strategy on investments."

The employee has not given any declaration of investment and suggesting that declaration should be asked from Sept-Oct onwards & till then tax should not be deducted OR to be deducted as low as possible. Kindly advise what is the exact process for salary TDS compliance for employees.

From India, Mumbai

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As per the Income Tax Act, you need to start TDS from April itself reckoning the present salary to continue till the end of the financial year and the TDS has to be tallied for every quarter presuming the same income for the rest of the year. This helps in the uniform distribution of Tax deduction throughout the year. Actually, you have to multiply the salary for the month of April by 12 and calculate the income tax payable for it and then divide that amount with 12 to arrive at the TDS for April, thereafter depending on the increase or decrease in salary the TDS is to be adjusted with every such payment. You are doing a great service to the employees by seeking the Tax declaration and reckoning it in arriving at the deduction to be made. But it is the personal responsibility of the salary drawing and disbursing officer to ensure due compliance of the IT Act provision.
The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS and TDS return is to be submitted quarterly; Q1 – 31st July, Q2 – 31st October, Q3 – 31st January & Q4 – 31st May.

From India, Mumbai

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