Tds
MOHAMED FIROZ
(Querist) 02 August 2014
This query is : Resolved
A PERSON IS WORKING IN A SCHOOL AND IS DRAWING A SALARY OF RS. 20000/- PER MONTH AND PAYS EPF RS. 780/- AND CARRIES HOME RS. 19220. IS TDS APPLICABLE FOR EACH MONTH ? THE SAME PERSON HAS TAKEN LEAVE FOR THREE MONTHS AND THE TOTAL EARNINGS PER YEAR HAS BEEN LESS THAN TWO LAKHS. IS TDS APPLICABLE ?
MOHAMED FIROZ
(Querist) 03 August 2014
I thought a taxation expert in this forum can explain it to me. Consult a C.A. is not a good answer
T. Kalaiselvan, Advocate
(Expert) 03 August 2014
If you are knowing the ceiling and exemption rules of Income tax, you can calculate the applicability yourself. Your query is very vague and devoid of proper details to give you proper advise hence you were suggested to consult an auditor with the details to clarify all the related issues.
ABDUL RAZIQUE
(Expert) 03 August 2014
Absolutely right, without any details no one can explain and provide right path.
FOR YOUR KIND INFORMATION here are some line as per your question:
Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax.
However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 40 lakh or Rs. 10 lakh respectively (the limits will be Rs.60 Lakh or Rs. 15 Lakh respectively w.e.f. 01.07.2010) in previous year, he is required to deduct tax at source.
These persons are mainly:
- Principal Officer of a company for TDS purpose including the employer in case of private employment or an employee making payment on behalf of the employer.
- DDO (Drawing & Disbursing Officer), In case of Govt. Office any officer designated as such.
- In the case of "interest on securities" other than payments made by or on behalf of the Central govt. or the State Government, it is the local authority, corporation or company, including the Principal Officer thereof.
Such person is called Deductor while the person from whom the tax is deducted is called Deductee.
Tax must be deducted at the time of payment in cash or cheque or credit to the payee's account whichever is earlier. Credit to payable account or suspense account is also considered to be credit to payee's account and TDS must be made at the time of such credit.
T. Kalaiselvan, Advocate
(Expert) 03 August 2014
I believe the author is satisfied that he finally got an answer from this section to his query through expert Mr. Razique.
MOHAMED FIROZ
(Querist) 04 August 2014
Let me redraft the question from the school point of view. Can the school pay the salary of Rs. 20000 minus her EPF amount of Rs. 780 which is Rs. 19220 without deducting TDS every month? She was on a long leave during the year. Her annual salary paid minus her leave taken is within Rs. Two Lakhs only and she is not an income tax assessee. She has no other income and has not invested in any tax free schemes. Is she free from TDS deduction by the school?
Guest
(Expert) 04 August 2014
First of all you have not stated how you are concerned personally with the problem. The experts are not concerned with the school point of view, rather concerned, how you are related with the problem.
Secondly, have you been appointed as an examiner to analyse the answers of the experts, as good or bad bad answer, and to declare the advice, "Consult a C.A. is not a good answer," if they have advised you to consult a CA?
Thirdly, if you are asking question on behalf of the school, the school management cannot be considered as so financially weak or poor not to be able to afford hiring services of some local tax practitioner.
Fourthly, do you think that the school could anticipate that the teacher would remain on leave at any point of time in the year with lesser pay or without pay to drop her earning below the level of taxable income? Mind it, the school is obliged to recover TDS every month on prorata basis on the estimated tax amount assessed on the basis of anuual salary amount of the employee. If tax has been recovered, the school is not at fault. Since the school will provide certificate of recovery on Form 16, the teacher can claim refund of tax from the Assessing Officer, as the school does not enjoy any power to refund the tax amount already deducted. This position you can get verified from any tax practioner, if not satisfied with this part of my answer.
