TDS Calculation for Non Govt Salary Employee
1. How the TDS shall be Calculated for a person receiving salary above B.E.L. for AY 2016-17?
Note: The Question is for Small scale Company who is having Less than 20 employees and Who cannot Afford Software. The Salary is paid as Gross Amount But Tax Advisor shall break up into Basic, HRA etc so that Employee will have benefit.
The steps involved in this are:
- First break the salary in most tax friendly structure. Break salary in different structures such as Basic, HRA, Medical allowance, Conveyance etc.
- Once the structure is made and accepted by employees or company management, you need to calcualte the tax liabiltiy.
- Devide the tax liability in 12 months and this is your TDS.
Can you Explain with an illustration for the follwing Employee:
1. Salary will be paid 50,000 per month (Residing at self occupied house)
2. Salary will be paid 70,000 per month ( Rent of Rs. 15,000 per month for House paid by Employee)
Check this sheet which i prepared, it is not accurate but you can break the salary in different structures. Ofcourse it needs to be updated for current AY.