Is It HR's Job to Handle Employee TDS? Seeking Guidance on Tax Deductions

Hi friends,

I require some urgent help from your side. I'm currently working in the IT sector as an HR Executive, where I'm asked to calculate the taxation part of all the employees and the TDS that has to be deducted from their salary. I would like to know if this is to be done by the HR Department. If yes, how do we go about it? What are the things which are to be taken care of? Kindly help me out with the same, please. Thanks in advance. :)

Regards, Nikhil Gadodia HR & Administration Executive Broadllyne Infoservices Pvt. Ltd. Consultant www.managementparadise.com

Hi Nikhil,

Based on my personal experience, I know that HR coordinates with employees and gets their Income/Investment Details. The person handling payroll is responsible for TDS calculations. It has to be supported by Finance. So, both the departments play an equal role in it.

Hope this might be of some use. Waiting for others to reply on the same.

Regards,
Poorna

Forgot to add a couple of things...

Get the investment declaration from the employees. Also, check for other posts on the site. There are some tax calculators that have already been posted, and they will certainly be of use to you.

Regards,
Poorna

Thank you, Poorna.

To add something, we don't have a payroll department as such. Currently, I'm the only person in the HR department out there. But being a fresher in all these aspects, I don't have much idea regarding the same. I have asked my accounts team to help me out with it.

However, I would like to have some idea on my own to work something out. I will wait for some more advice from seniors.

Hi,

TDS Calculation is a joint responsibility of HR and Accounts. The Accounts team is responsible for calculating the TDS, while the HR Department will provide all the salary details to Accounts. Subsequently, the Accounts team will calculate the TDS and inform HR. Alternatively, there are some payroll packages available that can automate all the calculations.

Thanks,
Vaitheeswaran

Nikhil,

That's not a big ask. You can download a Tax Calculator from the internet and calculate the same. You only need to know a couple of things: the taxable income of an employee, which is generally Basic+HRA+Special Allowance (or any other allowance), and their total investments (within 1 lac) in the last financial year for claiming tax exemption.

Amit

HR people should know about the TDS. But to my knowledge, the operational part is carried out by Finance. Neither can HR be so well aware of the taxation laws of the country nor are they particularly popular for understanding the intricacies of the system.

Generally, there is either a separate payroll section in HR which employs people with a finance background more than HR, or Finance is responsible for it.

My recommendation would be that you make a small list of your industry organizations and find out who handles their TDS and present it to your boss. But if you have to do it, at least request your boss to let you hire a consultant to understand the law - what investments are exempt to what extent, etc. This will at least help you get started.

I have a query. An employee has taken a loan from PMRY when he was unemployed. Now he is working in a corporate. Can he get a tax benefit on this loan? Please reply.