Friends,
It is the responsibility of the Drawing and Disbursing Officer (D.D.O.) to calculate and deduct the Income Tax (T.D.S.) out of the Salaries paid to its employees on Average basis. For the purpose of making the payment of tax mentioned , tax is to be determined at the average of income tax computed on the basis of rate in force for the financial year, on the income chargeable under the head "Salaries", including the value of perquisites for which tax has been paid by the employer himself.
Here is an Illustration:
The income chargeable under the head ―Salaries of an employee below sixty years of age for the year inclusive of all perquisites is Rs.4,50,000/-, out of which, Rs.50,000/- is on account of non- monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions discussed as above.
STEPS:
|
Income Chargeable
under
the head Salaries, inclusive of all perquisites
|
Rs.
4,50,000/-
|
|
Tax
on Total Salary (including
Cess)
|
Rs.
20,600/-
|
|
Average Rate
of Tax [(20,600/4,50,000)
X 100]
|
4.57%
|
|
Tax
payable on Rs.50,000/= (4.57% of 50,000)
|
Rs. 2285/-
|
|
Amount required to be deposited
each month
|
Rs.
190 ((Rs. 190.40) =2285/12)
|
The tax so paid by the employer shall be deemed to be TDS made from the salary of the employee.
