How to Deduct Tax at Source on Salary Step by Step
Step 1
Gross Salary (including salary received from former employer, if details are submitted) and the value of benefits or perquisites or amenities provided free of cost or at concessional rate to the employee.
Step 2
Deduct the receipts which are exempt from income tax under Sec.10, such as, leave travel concession, gratuity, commuted pension, leave salary, retrencment compensation, payment on voluntary retirement, house rent allowance, allowlances specified u/s 10(14)etc., if include in income from salary.
Step 3
Allow deduction for entertainment allowance, if eligible, and also Profesional tax, if any to arrive at net taxable salary. Standard deduction is not available from A.Y. 2006-07.
Step 4
Allow set off of any loss under the head ‘house property’ relating to a self-occupied residential house on account of interset on loan subject to a Maximum of Rs. 30,000.(Rs. 1,50,000 in case of loan taken on or after 1.4.1999 for construction or purcahse of house within three years from the end of the financial year in which the loan was taken). Particulars of such loss shall be furnished by the employee in a statement duly verified by the employee, alongwith a certificate from the person to whom interest is payable on the capital borrowed.
Step5
Deduct the amount invested in LIC,P.F.,P.P.F., repayment of housing loan, subscription of certain equity shares or debentures tuition fees etc. subject to maximum of Rs. 1,00,000.
Step 6
Deduct the amount contribution to notified Pension Scheme by employees of Central Government or any other employer.
Step 7
Deduct the amount of health insurance premium (Mediclaim), subject to a maximum of Rs. 15,000.
Step 8
Deduct the amount of expenditure incurred, if any, on the medical treatment, training and rehabilitation or the amount deposited in a scheme of LIC or UTI for the maintenance of a handicapped dependent relative. Deduction allowable is Rs. 50,000 (Rs. 75,000 in case of severe disability), irrespective of the amount of expenditure incurred.
Step 9
Deduct the amount paid to a financial institution or an approved chartiable institution, towards interest on a loan taken for higher eduction, without any limit.
Step 10
Deduct the amount of house rent paid by the employee for his own residence, subject to specifieed conditions. Maximum deduction allowable is Rs. 2000 p.m.
Step 11
Deduct allowance for physical disability.
Step 12
Total Income as computed above should be rounded off to the nearest multiple of Rs. 10.
Step 13
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Step 14
Divide the amount of tax as calculated in Step 13 by twelve, to arrive at ‘monthly deduction’ of tax from salary. Check also Procedure for deposit or file TDS on Salary
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{ 12 comments… read them below or add one }
iam a contract employee of govt of india so what is the TDS ? iam getting salary of RS 180000/pa
I am Working in Private Concern my Annual Salary is Rs 1,50000
So How much is the TDS. Second Pl. Confirm the Range on Which the
the TDS is Chargeble
Hi,
Please help me if there is any plan to help me out from tax deduction, as from my salary more than Rs5000 is deducting.
For Muttu,
They will deduct straight cut 2.06% tax from your salary.
For Raza,
Though you have not mentioned whether you have made any LIC policy, Mediclaim Policy for you or not, Still check section 80 of Income Tax Act for reference. You can get an exemption of 115000.00 from your taxable salary or even more.
One employee has two house properties both of which are let out. He declares the income from house property, property taxes remitted and the interest/principal remitted by him for the borrowed capital. Net result is loss from house property (let out). No other income from any other heads. As an employer, while deducting tax on salaries, can I take into account the loss incurred by the employee from house property and deduct tax on the net amount. If so, what are the documents I should insist upon to support his declaration ?
I am having permanent physical disability. My both legs were amputated in an accident. My Extent of disability is 70% and I have the relevent certificate.
How much will be the deductions(extact figure) in income tax in my case (in section 80U) . I am not getting the calculations in this regard. Please help me….
Dear Sir,
I want to know, If i am employer i want to be deduct salary tds from our employees salary per month, But i deduct total TDS from salary in last month one time, then it is any interest i have to pay for total tds paid in one time of my employees.
Thanx & regards,
Sandeep
Dear…… My Gross Salary is @ Rs: 50000/- what is my TDS monthly / yearly. how much is the % ? pls help me?
Hi,
I’m going to become an contract employee of HCLT. and my consolidated salary will be set 10,500 per month . so will you please let me know what percentage and what kind of taxes will be deducted from my consolidated salary as TDS. And what will I receive take home salary.
Regards,
Pankaj Kumar
I have to calculate TDS liability of teachers. A teacher came with handicapped certificate. I am wanted to know the exemption limit for the same.
Dear Sir,
For the Current year I have employed with Pvt Ltd. company. the company will pay Rs. 10,000.00 per month without any deduction.
So, please tell me as such my total income will be under taxable income slabe then how can i get fully exemption from deduction TDS from my salary.
Please suggest me as soon as possible at my E-Mail ID mentioned as above.
Hope, you will coperate me.
Thanking you,
yours truly
Kamal Gupta
Hi I am abhishek
I am doing job under CA, and part time job in company,
I filled TDS return, but at the time of field of Tds return one confussion in my mind that , how i can entry to the salary income
so, please tell me about that