Understanding TDS on CTC: How Does Having a PAN Card Affect the Rate?

Dear All,

Recently, I joined as an HR consultant in one company. I would like to know about TDS on CTC. I heard that if I have a PAN card, then TDS will be 10%; otherwise, it will be 20%. Could any one of you please help me with this?

Thanks in advance,

Regards,
Rajeshwari

You have joined as an HR consultant in one company. The company deducts TDS as consultancy, i.e., TDS on Consultancy @ 10%. If you have or quote your PAN No., they deduct 10%; otherwise, they deduct 20% on your amount without a PAN No.

With regards,

Sreenivasa Rao

Hi, I assume CTC stands for cost to company? TDS on salary is at the full tax rate applied to the employee concerned, irrespective of whether he/she has a PAN card. However, current TDS rules do not allow TDS returns to be filed without having PAN numbers for all employees from whom TDS is deducted. So, it's necessary for the employee to obtain a PAN card if the salary is above TDS limits.

Have you checked the details of CTC? There are many exemptions and investment avenues where we can save tax.

CTC is a hypothetical figure and it has nothing to do with the salary drawn. The TDS is deducted on the total salary drawn (to be drawn during the year) at the rate applicable to individuals in different slabs (10%, 20%, and 30% of the taxable income plus surcharge as applicable). The total tax payable is divided into 12 convenient installments so that the tax is deducted in easy installments throughout the year.

Rates are as follows:

Individuals and HUFs

I. In case of an individual (other than II and III below) and HUF:

Income Level / Slabs Income Tax Rate
i. Where the total income does not exceed Rs. 1,60,000/- NIL
ii. Where the total income exceeds Rs. 1,60,000/- but does not exceed Rs. 3,00,000/- 10% of the amount by which the total income exceeds Rs. 1,60,000/-
iii. Where the total income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/- Rs. 14,000/- + 20% of the amount by which the total income exceeds Rs. 3,00,000/-
iv. Where the total income exceeds Rs. 5,00,000/- Rs. 54,000/- + 30% of the amount by which the total income exceeds Rs. 5,00,000/-

II. In case of an individual being a woman resident in India and below the age of 65 years at any time during the previous year:

Income Level / Slabs Income Tax Rate
i. Where the total income does not exceed Rs. 1,90,000/- NIL
ii. Where the total income exceeds Rs. 1,90,000/- but does not exceed Rs. 3,00,000/- 10% of the amount by which the total income exceeds Rs. 1,90,000/-
iii. Where the total income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/- Rs. 11,000/- + 20% of the amount by which the total income exceeds Rs. 3,00,000/-
iv. Where the total income exceeds Rs. 5,00,000/- Rs. 51,000/- + 30% of the amount by which the total income exceeds Rs. 5,00,000/-

III. In case of an individual resident who is of the age of 65 years or more at any time during the previous year:

Income Level / Slabs Income Tax Rate
i. Where the total income does not exceed Rs. 2,40,000/- NIL
ii. Where the total income exceeds Rs. 2,40,000/- but does not exceed Rs. 3,00,000/- 10% of the amount by which the total income exceeds Rs. 2,40,000/-
iii. Where the total income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/- Rs. 6,000/- + 20% of the amount by which the total income exceeds Rs. 3,00,000/-
iv. Where the total income exceeds Rs. 5,00,000/- Rs. 46,000/- + 30% of the amount by which the total income exceeds Rs. 5,00,000/-

Surcharge: The surcharge on Income Tax for Individuals for total income exceeding Rs. 10 lakhs stands removed.

Education Cess: 3% of the Income-tax.