How Do We Handle TDS Calculations for New Employees at the End of the Financial Year?

Hi, we have just started a company and are about to start paying employees from this month. How do we calculate TDS because we are at the end of the 2010-2011 financial year and have only 2 months left? Do we need to calculate one year's salary and compute the TDS for this month and the next month, or should we only calculate the 2 months' pay of the employee which may not require TDS deduction because the pay won't exceed the income tax deduction limit? Please advise.

Please let me know the salary you are paying per individual, provide the approximate figure, and also inform me about your company's status—whether it is a private limited company or a proprietorship concern. Feel free to ask for clarifications on taxation.

Regards,
Basappa M V
[Phone Number Removed For Privacy Reasons]

Thanks for your reply. It is a partnership company that pays a salary to all employees, approximately 20 to 30K each. Also, some of them have worked but have not received Form 16, which was not issued by the previous employer and no TDS.

I am working as an HR in a private Ltd. company in Mumbai. In the month of October, one male person joined the company, and his per month salary is 30,000. So, what about TDS for him?

Another male person joined the company in November, and his per month salary is 20,000. So, what about TDS for him?

You mentioned that "if you are paying professional charges and advertisement charges etc., TDS is applicable." What does it mean? Do professional charges refer to PT, or something else? We obtained the P.T.E.C. number in the company's name in January, and for employees, we are applying this month.

What do you mean by advertisement charges? Please explain to me.

I would be obliged.

Thank you.

TDS Applicability and Calculation for Various Payments

Sapna's query is regarding the applicability of TDS for various payments, such as contract payments, advertisement payments, salaries, and professional charges. As an HR professional, you are responsible for TDS on the salary part, while the other aspects will be taken care of by the Finance team.

Salary Calculation and TDS Deduction

Regarding your query on the salaries to be paid, for exact calculation, we need the salary breakdown, including Basic, DA, HRA, PF deduction, etc. For approximate calculation purposes, consider the following scenario:

A male employee joined on October 1. His expected salary at the end of March 31, 2011, is ₹1,80,000/- with PT & Conveyance deduction of ₹6,000. In this case, the tax amount will be ₹1,442 (subject to him not working for an earlier period).

For a male employee who joined in November, no deductions are needed if his income does not exceed ₹1,60,000.

For any assistance regarding Tax, Accounting, or Audit matters, feel free to contact me using the following details. I am a Chartered Accountant.

Regards,
Basappa
[Phone Number Removed For Privacy Reasons]
[Email Removed For Privacy Reasons]