Hello,
I am working at a small software company. When I joined, my salary was around Rs. 12.5K per month. After a couple of months, it was raised to Rs. 17.5K per month.
Now, since it was raised to Rs. 17.5K, every month, Rs. 500 is being deducted from my salary under the name of TDS. I want to know if I am eligible for TDS and if the amount the company is deducting is correct. What is the procedure to estimate TDS on my salary?
Many of my friends say that no TDS should be deducted from my salary. I am confused and need urgent suggestions.
Thanks
From India, Bangalore
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I am working at a small software company. When I joined, my salary was around Rs. 12.5K per month. After a couple of months, it was raised to Rs. 17.5K per month.
Now, since it was raised to Rs. 17.5K, every month, Rs. 500 is being deducted from my salary under the name of TDS. I want to know if I am eligible for TDS and if the amount the company is deducting is correct. What is the procedure to estimate TDS on my salary?
Many of my friends say that no TDS should be deducted from my salary. I am confused and need urgent suggestions.
Thanks
From India, Bangalore
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Hi,
TDS depends on your salary structure as well as on your tax (investment declaration). I would suggest you to check your declaration and salary head as few salary heads are fully/partially non-taxable. In case you face any problem, just revert.
Regards,
Deepak Malik
From India, New+Delhi
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2TDS depends on your salary structure as well as on your tax (investment declaration). I would suggest you to check your declaration and salary head as few salary heads are fully/partially non-taxable. In case you face any problem, just revert.
Regards,
Deepak Malik
From India, New+Delhi
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Dear XYZ.. There are diffrent tax slab for male of female, in your scrap it is not clear wether u are male or female. so this things then revert back. regards, rajendra
From India, Mumbai
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From India, Mumbai
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I shall insert an Excel worksheet for Income Tax Calculation on salary for the Financial Year 2010-11 (Assessment Year 2011-12). Prior to that, I wish to explain some details to get an idea to enter the inputs.
On gross salary, the following deductions are applicable:
1) Professional Tax
2) House Rent in excess of 1/10th of salary subject to a ceiling equivalent to HRA
3) Interest on Housing loan subject to a ceiling of Rs. 1,50,000.
4) Refund on Housing loan, savings, tuition fee for 2 children, etc., altogether subject to a ceiling of Rs. 100,000.
5) In addition, savings on infrastructure bonds up to Rs. 20,000.
6) Other than the above, one lakh, 15000 to 20000 towards mediclaim premium, 40000 to 60000 towards treatment of specified diseases like Motor Neuron disease, 75000 to 100,000 towards disability, etc. are also admissible for deduction.
The details can be obtained from the following website: CENTRAL GOVERNMENT EMPLOYEES NEWS: New Income Tax Slab for FY 2010-11
Now, taxable income can be calculated as follows:
Gross salary - total deductions = Taxable income
Taxpayers can be categorized into 3 groups:
1) Non-Seniors - Male
2) Non-Seniors - Female
3) Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non-Senior Female has to pay in excess of Rs. 1,90,000 & Non-Senior Male in excess of Rs. 1,60,000.
Beyond the above income, one has to pay 10% up to Rs. 5,00,000, 20% thereafter up to Rs. 8,00,000, and 30% in excess of Rs. 8,00,000. In addition, an education cess at 3% will be charged on the Total Tax.
I shall provide an example:
Gross income of a Non-Senior Male - Rs. 12,00,000
Deductions (actual): Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000+150000+100000+20000+50000 = 332000
Taxable income: 1200000 - 332000 = 868000
For Non-Senior Male:
Rs. 1,60,000 is exempted.
For the next 340000 (500000-160000), 340000x10% = 34000 -(1)
For the next 300000 (800000-500000), 300000x20% = 60000 -(2)
For the next 68000 (868000-800000), 68000x30% = 20400 -(3)
Tax - (1)+(2)+(3) = 114400
Also, for Non-Senior Female Tax is 114400-3000 = 110400
and Senior Citizens Tax is 114400-8000 = 106400
Education Cess: 114400*3% = 3432
Total Tax: Rs. 1,17,832
See Excel Sheet. Enter gross salary and deductions/savings applicable in the green color column. Results will be shown in the yellow color. The red color is used for static data.
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667
From India, Bangalore
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On gross salary, the following deductions are applicable:
1) Professional Tax
2) House Rent in excess of 1/10th of salary subject to a ceiling equivalent to HRA
3) Interest on Housing loan subject to a ceiling of Rs. 1,50,000.
4) Refund on Housing loan, savings, tuition fee for 2 children, etc., altogether subject to a ceiling of Rs. 100,000.
5) In addition, savings on infrastructure bonds up to Rs. 20,000.
6) Other than the above, one lakh, 15000 to 20000 towards mediclaim premium, 40000 to 60000 towards treatment of specified diseases like Motor Neuron disease, 75000 to 100,000 towards disability, etc. are also admissible for deduction.
The details can be obtained from the following website: CENTRAL GOVERNMENT EMPLOYEES NEWS: New Income Tax Slab for FY 2010-11
Now, taxable income can be calculated as follows:
Gross salary - total deductions = Taxable income
Taxpayers can be categorized into 3 groups:
1) Non-Seniors - Male
2) Non-Seniors - Female
3) Senior Citizens (65 years old & above)
If the taxable income is Rs. 2,40,000, a Senior Citizen is fully exempted from paying tax. Non-Senior Female has to pay in excess of Rs. 1,90,000 & Non-Senior Male in excess of Rs. 1,60,000.
Beyond the above income, one has to pay 10% up to Rs. 5,00,000, 20% thereafter up to Rs. 8,00,000, and 30% in excess of Rs. 8,00,000. In addition, an education cess at 3% will be charged on the Total Tax.
I shall provide an example:
Gross income of a Non-Senior Male - Rs. 12,00,000
Deductions (actual): Professional Tax - 12000, Housing loan interest - 2,00,000, Total savings/deductions - 2,50,000, Savings on Infrastructure bond - 25,000, other deductions over 1,00,000 - 50,000.
Admissible total deductions (subject to ceiling limits) - 12000+150000+100000+20000+50000 = 332000
Taxable income: 1200000 - 332000 = 868000
For Non-Senior Male:
Rs. 1,60,000 is exempted.
For the next 340000 (500000-160000), 340000x10% = 34000 -(1)
For the next 300000 (800000-500000), 300000x20% = 60000 -(2)
For the next 68000 (868000-800000), 68000x30% = 20400 -(3)
Tax - (1)+(2)+(3) = 114400
Also, for Non-Senior Female Tax is 114400-3000 = 110400
and Senior Citizens Tax is 114400-8000 = 106400
Education Cess: 114400*3% = 3432
Total Tax: Rs. 1,17,832
See Excel Sheet. Enter gross salary and deductions/savings applicable in the green color column. Results will be shown in the yellow color. The red color is used for static data.
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Ltd, PALAKKAD - 678 623,
KERALA, INDIA.
Ph. +91 9447 467 667
From India, Bangalore
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Hello Abbas,
That was a really wonderful explanation. Thanks for the file too. I calculated my tax and have saved it in the file, which I have attached here. Kindly go through it and let me know whether it is correct or not.
I get 1195 as the total tax. So, Rs. 1195 I have to divide by 12 months, right? And it comes to around 100 Rs per month. But I am still not understanding how and why these guys are deducting Rs. 500 per month in the name of TDS. Is income tax and TDS on my salary the same?
@rajendra: Yes, I am a male candidate.
Thanks
From India, Bangalore
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That was a really wonderful explanation. Thanks for the file too. I calculated my tax and have saved it in the file, which I have attached here. Kindly go through it and let me know whether it is correct or not.
I get 1195 as the total tax. So, Rs. 1195 I have to divide by 12 months, right? And it comes to around 100 Rs per month. But I am still not understanding how and why these guys are deducting Rs. 500 per month in the name of TDS. Is income tax and TDS on my salary the same?
@rajendra: Yes, I am a male candidate.
Thanks
From India, Bangalore
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Dear Rajendra,
I have gone through your income details entered in the Excel sheet. The tax calculated using the Excel sheet was found to be correct. Your total income is Rs. 2,10,000. If the deductions are not taken care of, you will be charged a tax of Rs. 5000 and a cess of Rs. 150. Please ensure that you have noticed the details of deductions before the authorities. If not, kindly contact the concerned authorities in this regard.
Abbas. P.S
From India, Bangalore
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I have gone through your income details entered in the Excel sheet. The tax calculated using the Excel sheet was found to be correct. Your total income is Rs. 2,10,000. If the deductions are not taken care of, you will be charged a tax of Rs. 5000 and a cess of Rs. 150. Please ensure that you have noticed the details of deductions before the authorities. If not, kindly contact the concerned authorities in this regard.
Abbas. P.S
From India, Bangalore
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EMPLOYEE SALARY INCOME TAX CALCULATION.xls x
SALARY CALCULATOR & INCOME TAX.zip