TDS Tax Declaration & Filing

1. TDS,Tax Declaration&Filing:AQuickWalkthrough TDS&Remittance What is TDSortaxdeductedat source? As per Section 192 of the Income Tax Act, 1961, employers are required to deduct tax while paying salaries to employees. Usually deducted on a monthly basis, the amount is deposited at abankauthorisedtocollect taxesonbehalfof the Governmentof India. Whatis thedifferencebetweenfinancialandassessment years? The financial year is the year in which the income is earned. The assessment year is when the actualcomputationhappensforthatfinancialyear. When shouldtheemployerremitthedeductedtax? After deducting the tax, the employer has to pay the same to the government by the 7th of the following month. Thedue date forremittingthetaxfor thesalaryofMarchis30thApril. Is thereapenaltyin caseof non-remittance? There is an interest of 1% per month for non-deduction and 1.5% per month for non-remittance. The employer also has to pay an additional penalty of INR 200 per day (The maximum penalty cannotexceedtheTDSamount).

2. Whatisa tax declaration? Employees have to submit a tax declaration, to their employer, at the commencement of the financialyear.Alsocalledinvestmentdeclarationor expendituredeclaration,itconsistsofall the tax-saving investments, deductions and expenses in that year. At the end of the year, the employeehastoprovideproofofinvestment(POI)foreverything. TaxComputation byEmployers Howdoesan employer calculatetax? The computation of the monthly tax amount is based on the average tax rate, the estimated annual income ofthe employeeandthetax declarationmadebytheemployee atthebeginning oftheyear. WhatisTaxFiling? All employees have to file an income tax return (ITR) every year. This form has the concerned employee’s income and tax details for the financial year. Form 16, provided by an employer to the employee, has all the details. Filing can be done online on the income tax department’s portal. If an excess tax is paid, the employee will receive a tax refund from the income tax department. Ifthereisashortage,the concernedindividualhastopaythe same. Theemployerhastofileaquarterlyreturn(inForm24Q)bythe15thofthefollowing month.