How Do You Handle Employee Confusion Over Monthly Tax Calculations? Seeking Advice!

Greetings to all readers! Many times, we face numerous queries from our employees regarding income tax calculation. It varies from month to month as we pay fixed and variable components (depending on target achievement). Despite explaining multiple times, we are unable to satisfy them.

Guidance Needed on Tax Computations

Please guide me on whether we can circulate tax computations with employees or how to handle this situation.

Regards,

You can arrange for a TDS awareness session for your employees from any internal or external expert. In fact, TDS calculation is no rocket science and is pretty easy and can be done by any CA in your company. You may do it by way of a PowerPoint presentation with simulations in Excel.

Mandhar, you can arrange for a TDS awareness session for your employees, from any internal or external expert. In fact, TDS calculation is not rocket science; it is pretty easy and can be done by any CA in your company. You may do it by way of a PowerPoint presentation with simulations in Excel.

Thanks for your valuable suggestion, but we have already explained it many times. However, the same kind of queries keep arising repeatedly. Sometimes, they even question our authenticity.

Regards.

TDS is the responsibility of the employer. If the tax liability of an individual is assessed as Rs. 5000/- or more, it is the responsibility of the employer to deduct and deposit advance tax. The Income Tax so assessed is to be equally distributed over the year on a month-to-month basis. If you go through the Income Tax Law book, you will be able to satisfy the queries of your employees in a better way or ask your finance team to prepare a presentation for you, which should be displayed in prominent places for mass information.

You can also calculate the monthly liability of tax and circulate it among the employees either in the form of a general notice or an individual notice giving the earning details, tax liability after known sources of savings, various sections, and monthly distribution of the proposed tax deduction. You may ask employees to provide details of other savings which have not been reckoned in the statement due to non-availability or error, if any.

This will bring transparency and reduce day-to-day queries in this regard.

Regards,
AK Jain