TAN number and TDS deduction

Hi,

I would like to know about applying for TAN number and deducting TDS. Questions:
1. Are we to deduct tax for employees who don't come under income tax slab i.e if we are paying INR 15000 / month salary?

2. What about employees whom we are paying salary of INR 40000 / month?

3. What about a contractor from whom we have got any work done - Say we paid him INR 50,000 as one time payment do we deduct TDS?

4. How are tax slabs calculated? Are they same as that of Income tax slabs?

5. Can I apply for TAN number online - Are there any other liabilities associated with TAN number?
Asked 7 months ago in Income Tax from Amritsar, Punjab
Hi,
TDS on salary to be deducted , when after taking all the income from other sources and taking all the deductions into consideration. there is still taxable income.
1) if the gross salary of the employee is more than taxable slab (income tax slab) and after deductions under section 80cce (for which employee is required to give documents proofs) there is taxable income, then TDS is need to be deducted @ average rate.
so ans for ques 1 & 2 is NO
3) Yes, as per section 194 C, if the one time payment of a contractor exceeds Rs 30000/- then TDS has to be deducted.
or  Aggregate amount of such sums credited or paid  exceed and  likely to exceeds Rs. 75,000 (Rs. 1 Lakh from financial year 2016-17).

4) tax slab is same as income tax slab.

5) yes, you can apply for TAN online, Once you get TAN, you are required to deposit TDS on time and file TDS return regularly.

Vishakha Agarwal
CA, Bangalore
399 Answers
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  Talk to Vishakha Agarwal
Dear Sir,

1.No you don't need to deduct.

2. Yes you have to deduct the TDS.

3. Yes, you have to deduct the TDS if you were liable for tax audit in the last year.

4. Dint get your question.

5. Yes, you can apply for TAN number online. Yes, you have to file the quarterly tds returns

Please feel free to call/ revert in case of any doubts

Thanks and Regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
1574 Answers
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Here is the method to Calculate TDS on salary for future reference:
You can calculate TDS on your income by following the below steps.

    Calculate gross monthly income as a sum of basic income, allowances and perquisites.
    Calculate available exemptions under Section 10 of the Income Tax Act (ITA). Exemptions are applicable on allowances such as medical, HRA, travel.
    Reduce exemptions according to step (2) for the gross monthly income calculated in step (1).
    As TDS is calculated on yearly income, multiply the corresponding figure from above calculation by 12. This is your yearly taxable income from salary.
    If you have any other income source such as income from house rent or have incurred losses from paying housing loan interests, add/subtract this amount from the figure in step (4).
    Next, calculate your investments for the year which fall under Chapter VI-A of ITA, and deduct this amount from the gross income calculated in step (5). An example of this would be exemption of up to Rs.1.5 lakh under Section 80C, which includes investment avenues such as PPF, life insurance premiums, mutual funds, home loan repayment, ELSS, NSC, Sukanya Samriddhi account and so on.
    Now, reduce the maximum allowable income tax exemptions on a salary. Currently, income up to Rs.2.5 lakhs is fully exempt from paying taxes, while income from Rs.2.5 lakhs to Rs.5 lakhs is taxed at 10%, and Rs.5 lakhs to Rs.10 lakhs income bracket is taxed at 20%. All income above this amount is taxed at 30%.
    Do note that senior citizen have different tax slabs and receive higher exemptions than those discussed above.
Vishakha Agarwal
CA, Bangalore
399 Answers
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  Talk to Vishakha Agarwal
Yes
Vidya Jain
CA, Kolkata
261 Answers
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  Talk to Vidya Jain
It should be individual.
Abhishek Dugar
CA, Mumbai
1574 Answers
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  Talk to Abhishek Dugar
Hi,
you need to choose individual
Vishakha Agarwal
CA, Bangalore
399 Answers
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  Talk to Vishakha Agarwal
Hi,

1. No need to deduct Tax if the Salary paid is below basic exemption limit
2. You will have to deduct tax provided the Income after allowing all Exemptions and Deductions is more than the Basic Exemption Limit
3. Yes. You have to deduct TDS u/s 194C at 1% if the Contractor is an Individual or a Proprietary Concern or an HUF. 2% in all other cases.  TDS u/s 194C is applicable if a single payment exceeds 30,000 or aggregate of all Payments in a Financial Year exceeds Rs. 1 Lakh
4. Yes. They are same as Tax slabs in case of TDS on Salary
5. Yes you can Apply for TAN Online. You will have to file TDS returns for every quarter in which TDS is deducted

While applying for TAN as a Proprietary concern, you have to select Individual
Pradeep Bhat
CA, Bengaluru
329 Answers
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I assume that your question is satisfactorily answered .

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
1456 Answers
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  Talk to Rohit R Sharma
individual.
Shyam Sunder Modani
CA, Hyderabad
1363 Answers
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