Hi to all hr people
Can any one pls explain the TDS, how to calculate? 1 employee's salary is 4000 he is liable to pay esi,pf,pt?
Wt is the meaning of (ESI,pf) Limits? Now Esi limits is 10K? Pls any one give me the reply. Its very urgent,pls pls pls
thanks
ankitha
From India, Bangalore
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1Can any one pls explain the TDS, how to calculate? 1 employee's salary is 4000 he is liable to pay esi,pf,pt?
Wt is the meaning of (ESI,pf) Limits? Now Esi limits is 10K? Pls any one give me the reply. Its very urgent,pls pls pls
thanks
ankitha
From India, Bangalore
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Hi Ankitha,
TDS stands for Tax Deducted at Source, mainly applicable to salaried employees, professionals, and regular vendors (where the total payment is more than ₹20,000 in a year). For salaried employees, TDS is calculated based on their taxable income, which is determined by deducting investments (contributions to PF, NSC, govt securities and bonds, etc.) as per the Income Tax Act, HRA, reimbursements, etc. The taxable income is then categorized into various tax slabs (the slabs change every year with the budget). Currently, the slabs are:
Taxable income Tax rate
₹100,000 - ₹150,000 10%
₹151,000 - ₹300,000 20%
₹300,000 & above 30%
If an employee is paid a salary less than or equal to ₹10,000 per month and the company employs 20 or more employees, the employee will be subject to ESI and PF. The contribution rates are as follows:
ESI: 1.75% of gross (Employee), 4.75% of gross (Employer), Total 6.5%
PF: 12% of basic (Employee), 12% of basic (Employer), Total 24%
Regards,
Sunil Joshi
From United States, Bedford
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TDS stands for Tax Deducted at Source, mainly applicable to salaried employees, professionals, and regular vendors (where the total payment is more than ₹20,000 in a year). For salaried employees, TDS is calculated based on their taxable income, which is determined by deducting investments (contributions to PF, NSC, govt securities and bonds, etc.) as per the Income Tax Act, HRA, reimbursements, etc. The taxable income is then categorized into various tax slabs (the slabs change every year with the budget). Currently, the slabs are:
Taxable income Tax rate
₹100,000 - ₹150,000 10%
₹151,000 - ₹300,000 20%
₹300,000 & above 30%
If an employee is paid a salary less than or equal to ₹10,000 per month and the company employs 20 or more employees, the employee will be subject to ESI and PF. The contribution rates are as follows:
ESI: 1.75% of gross (Employee), 4.75% of gross (Employer), Total 6.5%
PF: 12% of basic (Employee), 12% of basic (Employer), Total 24%
Regards,
Sunil Joshi
From United States, Bedford
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Hi Ankita,
First, you need to divide the salary into basic, HRA, Transport Allowance, Medical Allowance, special allowance, etc., depending on the salary range. Some of these components like HRA, TA, Medical Allowance have limitations for tax exemption. You can calculate the exempted value and get the final amount which is taxable. If this taxable amount is more than Rs 100,000 (Rs 1,35,000 for women), then you need to ask your employees if they have taken any policies like LIC or invested in any mutual funds, etc., for which they can claim tax exemption. After calculating all these, the remaining amount is taxable, and you need to calculate it as per the government norms.
If you consider a person getting a salary of Rs 4000/- (you have not specified if it is gross or CTC), as this pay doesn't come under the taxable amount, there is no need for any TDS calculation.
Sirisha Reddy
From India, Bangalore
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First, you need to divide the salary into basic, HRA, Transport Allowance, Medical Allowance, special allowance, etc., depending on the salary range. Some of these components like HRA, TA, Medical Allowance have limitations for tax exemption. You can calculate the exempted value and get the final amount which is taxable. If this taxable amount is more than Rs 100,000 (Rs 1,35,000 for women), then you need to ask your employees if they have taken any policies like LIC or invested in any mutual funds, etc., for which they can claim tax exemption. After calculating all these, the remaining amount is taxable, and you need to calculate it as per the government norms.
If you consider a person getting a salary of Rs 4000/- (you have not specified if it is gross or CTC), as this pay doesn't come under the taxable amount, there is no need for any TDS calculation.
Sirisha Reddy
From India, Bangalore
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Hi Sunil,
I have gone through the reply on the TDS structure. The main problem I am facing is that in my company there is no provision for contribution to PF, NSC, government securities, and bonds, etc., as per the Income Tax Act, HRA, reimbursements, etc. Whatever salary is given to us has a wholesome amount after deducting the tax.
So, in that case, if an employee is getting a salary of 6000 pm and from this salary, the TDS of 10.3% is deducted, then the employee is getting an even lesser amount of his salary, which states that even a PEON is also eligible for tax deduction from his salary. This is not at all justifiable.
In my offer letter, this line is specified—can you shed some light on the same:
"The gross consultancy fees payable to you will be Rs. 6000/- (Rupees Six Thousand Only) per month. Tax as applicable under the Income Tax Act, 1961, will be deducted from the consultancy fees."
If this person is not eligible for tax deduction, then how should I pursue my employer not to deduct tax from such a small amount of salary?
Please reply to me as soon as possible.
Thanks,
Poonam
From India, Mumbai
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I have gone through the reply on the TDS structure. The main problem I am facing is that in my company there is no provision for contribution to PF, NSC, government securities, and bonds, etc., as per the Income Tax Act, HRA, reimbursements, etc. Whatever salary is given to us has a wholesome amount after deducting the tax.
So, in that case, if an employee is getting a salary of 6000 pm and from this salary, the TDS of 10.3% is deducted, then the employee is getting an even lesser amount of his salary, which states that even a PEON is also eligible for tax deduction from his salary. This is not at all justifiable.
In my offer letter, this line is specified—can you shed some light on the same:
"The gross consultancy fees payable to you will be Rs. 6000/- (Rupees Six Thousand Only) per month. Tax as applicable under the Income Tax Act, 1961, will be deducted from the consultancy fees."
If this person is not eligible for tax deduction, then how should I pursue my employer not to deduct tax from such a small amount of salary?
Please reply to me as soon as possible.
Thanks,
Poonam
From India, Mumbai
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ESI & PF CALCULATION.xls