Question: Is It Mandatory To Deduct TDS On Salary On Monthly Basis?

Who is required to deduct TDS on salary?

Under Section 192 of the Income Tax Act, every employer who is paying a salary income to his employee is required to deduct TDS from the salary income if it exceeds the basic exemption limit..

How is monthly TDS on salary calculated?

Here’s how an individual can calculate TDS on income:Add basic income, allowances and perquisites to calculate gross monthly income.Compute the available exemptions under Section 10 of the Income Tax Act (ITA)Subtract exemptions found in step (2) from the gross monthly income calculated in step (1)More items…

What is TDS rule?

Tax Deducted at Source (TDS) is a system introduced by Income Tax Department, where the person responsible for making specified payments such as salary, commission, professional fees, interest, rent, etc. is liable to deduct a certain percentage of tax before making payment in full to the receiver of the payment.

Is TDS is refundable?

If the deductee fails to submit the required certificates on time, to claim various deductions under Section 80C, the deductor may deduct TDS in excess of the liability. You can easily claim a refund while filing the ITR and provide your bank details to expedite the refund process.

What is section 15 of Income Tax Act?

– For the removal of doubts, it is hereby declared that where any salary paid in advance in included in the total income of any person for any previous year, it shall not be included again in the total income of the person when the salary becomes due.

When should we pay TDS?

TDS payment due date every quarterMonth of DeductionQuarter endingThe due date for TDS Payment through ChallanMay30th June7th JuneJune7th JulyJuly30th September7th AugustAugust7th September9 more rows•Sep 29, 2020

What happens if TDS is not deducted on salary?

Penalty for companies for not depositing or not deducting TDS on time. The employer can make the interest payment on such late payment of TDS before filing TDS returns or demand raised by TRACES. Also, the interest paid delay while depositing TDS is not allowed as an expense under the income tax provisions.

Why TDS is not required to be deducted on salary paid to partners?

Explanation 2 of section 15 says that “Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as “salary”. Therefore no TDS is to be deducted on salary paid to the partners.

On what amount of salary TDS is deducted?

How to calculate TDS on Salary?Income Tax SlabTDS DeductionsTax PayableUp to Rs.2.5 lakhsNILNILRs.2.5 lakhs to Rs.5 lakhs5% of (Rs.5,00,000-Rs.2,50,000)Rs.12,500Rs.5 lakhs to Rs. 6.33 lakhs20% of (Rs.6,33,000-Rs.5,00,000)Rs.26,600

What is the minimum amount of TDS?

Minimum Amount of Payment for Deduction of TDS under Section 194C. If the payment that is being made to the contractor does not exceed Rs. 30,000, No TDS on payment to contractor is required to be deducted. However, if the total of all such payments made or to be made during a financial year exceeds Rs.

How can I save TDS?

However, for those earning more, following pointers could help them avoid paying excess TDS:Submit all investment proofs for deduction under Section 80C. … Housing loan repayment (principal) … Leave Travel Allowance. … Public Provident Fund (PPF) … Sukanya Samriddhi account. … Benefits under Section 80EE for first-time homebuyers.More items…•

Is TDS deducted every month?

An employer deducts tax at source (TDS) and not advance tax. An employer is required to deduct TDS at the time of payment of salary to employees. Since the employer is paying salary every month, he is liable to deduct TDS every month else he shall be liable to pay interest and penalty.

Is TDS and income tax same?

Here is simple difference between Income Tax and TDS: 1) Income tax is levied on all individuals or corporates for the income earned above the tax limit for that particular period. TDS is tax deducted at source. … TDS is deducted in cases such as from salary income, fixed deposits, etc.

Is a partnership firm required to deduct TDS?

An Individuals or an H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession where accounts are required to be audited u/s 44AB, in the immediately preceding financial year. All the companies and Partnership firms are liable to deduct TDS.

Is TDS deductible on audit fees?

In the instant case, the assessee had made provision for audit fees to the account of the payee which fact has been mentioned by the ld CITA. Hence the provisions of section 194J of the Act are clearly attracted and non-deduction of tax at source would automatically invite disallowance u/s. 40(a)(ia) of the Act.

How much is the tax deduction in India?

As per the current income tax slabs, taxation of income of resident individuals below 60 years is as follows: Income up to Rs 2.5 lakh is exempt from tax, 5 per cent tax on income between Rs 250,001 to Rs 5 lakh; 20 per cent tax on income between Rs 500,001 and Rs 10 lakh; and 30 per cent tax on income above Rs 10 lakh …