How Do I Calculate TDS for Mid-Year Joiners Without Previous Employer Form 16?

Hello, Company intro: LLP company from TN, yet to get registered under PF, GST, etc.

TDS for Mid-Year Joiners

1. How is TDS/IT calculated for employees who join the organization in the middle of the F.Y. (2018-19) and have not submitted previous employer deduction details like Form 16?

For example: An employee joined in Nov 2018 with a salary of 90K per month (currently no PF deduction in our company) and had declared 80K under 80C, etc. There is no Form 16 from his previous employer. How should I calculate the IT now? Please guide.

TDS Calculation Period

2. Since the salary for March 2019 will be paid on the 2nd or 3rd of April 2019, should I calculate the TDS count from April 18 to Mar 19 or Mar 18 to Feb 19?

Regards, Amogha

Hello Amogha,

1. TDS Calculation: In such a scenario where an employee joins in the middle of the financial year and does not provide Form 16 from the previous employer, the income tax calculation can be a bit tricky. Here are the steps to do it:
- Firstly, calculate the salary for the remainder of the financial year, i.e., from November 2018 to March 2019. In your case, the salary would be 90K * 5 months = 4,50,000.
- Next, add the declared investment under Section 80C to this salary. So, the total income becomes 4,50,000 + 80,000 = 5,30,000.
- According to the Income Tax Act, no tax is applicable for income up to 2,50,000. So, subtract this from the total income: 5,30,000 - 2,50,000 = 2,80,000. This is the taxable income.
- Now, calculate the tax on this taxable income using the tax slabs applicable for the financial year 2018-19.
- Subtract the TDS already deducted by the previous employer, if any. As there is no Form 16, we'll assume it as zero in this case.
- The result is the TDS to be deducted by your company.

2. TDS Period: Regarding your second question, the TDS count is always from April to March of the following year, irrespective of when the salary for March is paid. So, for the financial year 2018-19, the TDS count should be from April 2018 to March 2019.

Remember, it's always recommended to consult with a tax advisor or chartered accountant to ensure compliance with all relevant laws and regulations.

I hope this information helps you. Feel free to reach out if you have any more questions.

🤗🧼😊