How Do I Calculate TDS for Employees with Investment Plans Like LIC Premiums?

Please guide on how to calculate TDS for employees who show investments. Suppose my salary is Rs. 25,000, and every month I pay Rs. 3,000 for LIC premium. How is the investment calculated for TDS deduction? I know that there should be a 10.3% deduction on the gross amount. If I am mistaken, kindly correct me and guide me on how to calculate TDS for employees with or without investment plans.

If there is a specific formula to follow, please provide it.

Thanks,
Ravita

Generally, in the investment head, you may deposit up to Rs. 100,000 for income tax exemption. This includes the principal portion of the housing loan. In addition, an infrastructural bond of Rs. 20,000 is exempted. Towards the housing loan, the interest portion up to Rs. 1,50,000 is further exempted. These are only some tips.

Regarding your case, your annual income is 25,000 x 12 = 3,00,000. Savings, 3,000 x 12 = 36,000. Balance - 300,000 - 36,000 = 2,64,000. Tax limit for male - 1,80,000 and for female - 1,90,000. If you are a female, the tax will be 2,64,000 - 1,90,000 = 74,000 x 10% = 7,400. Cess @3% = Rs. 222. Total = 7,622. (This can be calculated as 74,000 x 10.3%, as you correctly wrote above.)

Regards,
Abbas.P.S

Thanks, Ms. Abbas. Now, it's clear to me. Based on the example you gave for my salary, I can calculate for other employees. I believe I will have to collect all investment papers as proof of investment.

Hello Seniors, I would like to seek your guidance regarding the implementation of TDS deduction in a company. Could you please advise on the minimum number of working employees required for TDS deduction to be applicable, as well as the annual salary threshold for this deduction to take effect? Your insights on this matter would be greatly appreciated. Thank you.

Hi Sonia, TDS stands for Tax Deduction at Source. It is not related to the number of working employees but rather to the income of the employee. I suggest you visit any site related to income tax. Please go through the Tax Slabs and rebate clause. (Please first understand salaried income)