Understanding TDS: How Does It Affect Your Basic Salary and Tax Exemptions?

What is the system? Is that deducted from the basic salary? Or else, what is the limit for basic salary, HRA, and other allowances to get exempted from Income Tax. Please help me out with an example.

Thanks.

Hi!

Please see if this attached sheet might help you out.

Chitra Sharma

Dear Friends,

There is a master CIRCULAR NO. 8/2007 [F.No.275/192/2007-IT(B)] of the Income Tax Department for the deduction of TDS on salaries. I am attaching the same for your reference; it also provides examples for deduction.

Regards,
Sanjiv Sharma

Hi Vinit Srivastava,

I am working on a new structure for the senior management employees of my company. I would like to know if an employee who has received a handsome appraisal and wishes to attach the car, which is in his wife's name, on a hire purchase scheme with the company instead of taking a raise in his salary, will the amount paid to his wife attract TDS at 2.5% as in the case of contracts or as applicable for rent.

My accounts guy is not clear on this. Please advise if you are aware of this situation.

Thank you,
Vinit Srivastava