How Do I Calculate TDS for an Employee Earning 30,000 and Which Allowances Are Tax-Free?

I am working as an HR generalist. One of our employees' gross salary is 30,000/- per month. Now, he will come under the head of TDS. Please tell me how to calculate TDS. Also, I have heard that if we consider some amount as an Allowance (where this allowance will be tax-free), then there will be no TDS in such consideration. But I don't exactly know what allowance that is. I request seniors to help me get a clear picture of TDS.

Hi,

Tax is always considered on the taxable income only received in any financial year from April to March. The exemptions are:
- Conveyance allowance of 1600/- per month
- Medical allowance of 1250/- per month
- HRA based on the location: 40% on the basic for Metro areas and 30% for Non-metro areas.

You may also need to consider the employee's savings and housing loan, if any.

If you need more details, I have a TDS calculator in Excel that I can share with you.

Dear Jeevarathnam P,

As I know, medical reimbursement against bills up to Rs. 15,000 during the year is exempt, and medical allowance is fully taxable.

Thanks,

V K Gupta