Understanding TDS Deduction Norms for 2014-2015: Can Anyone Help Clarify?

TDS Deduction Norms for 2014-2015

Please brief me about the current TDS deduction norms for 2014-2015. I require this information for TDS deduction for employees working as HR Manager.

Regards.

As per Section 192, the Employer is required to deduct Tax at source on the amount payable at the average rate of Income Tax.

Rate of Deduction of Tax

In the case of an individual & HUF (other than II and III below):

- (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.5,00,000/-: 10% of the amount in excess of Rs.1,60,000/-
- (iii) Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-: Rs.34,000/- + 20% of the amount by which total income exceeds Rs.5,00,000/-
- (iv) Where the total income exceeds Rs.8,00,000/-: Rs.94,000/- + 30% of the amount by which total income exceeds Rs.8,00,000/-

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

- (i) Where the total income does not exceed Rs.1,90,000/-: Nil
- (ii) Where total income exceeds Rs.1,90,000/- but does not exceed Rs.5,00,000/-: 10% of the amount by which the total income exceeds Rs.1,90,000/-
- (iii) Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-: Rs.31,000/- + 20% of the amount by which total income exceeds Rs.5,00,000/-
- (iv) Where the total income exceeds Rs.8,00,000/-: Rs.91,000/- + 30% of the amount by which the total income exceeds Rs.8,00,000/-

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

- (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.5,00,000/-: 10% of the amount by which the total income exceeds Rs.2,40,000/-
- (iii) Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-: Rs.26,000/- + 20% of the amount by which the total income exceeds Rs.5,00,000/-
- (iv) Where the total income exceeds Rs.8,00,000/-: Rs.86,000/- + 30% of the amount by which the total income exceeds Rs.8,00,000/-

Reference: Income Tax Act 1961, Income Tax Rule 1962, Wealth Tax Act 1957, Wealth Tax Rules 1957. Notifications issued from time to time.

Regards.

I am attaching the file of TDS saving sections to provide a comprehensive understanding of tax savings from income.

Regards,
Arpit Sharma
[Phone Number Removed For Privacy Reasons]

The attached notes will help you understand the salary, TDS, etc., in a nutshell and keep them updated for any corrections.

Regards,

It's also necessary to know some more things like "Perquisites," exemptions, computation of taxable income, etc. Attached notes will give you some more information on these.

Before proceeding to effect TDS from the employees, you should obtain the tax planning declaration incorporating those items and amounts that every employee plans with respect to other incomes like house rent, bank interest, dividend, etc., which are outside the payroll and likely income tax for the whole year in the month of April itself. Based on this, you should estimate the likely IT computed and determine the monthly proportion of TDS to deduct from their salary. This should be reviewed and re-estimated after completion of the 3rd Quarter, i.e., in January of the following year, and revise the applicable tax based on actuals after obtaining copies of relevant savings and revise the TDS to be effected in the last Quarter, i.e., January to March. You must further confirm by working out the final IT and fully account for the TDS or refund for the month of March. If you do the computation systematically like this, you will have no problem.

Kind regards.