• Saving tax on salary

Hi, my name is kamlesh varma. I am working in garment Retail Company as a sr. quality assurance executive.  After 11 months from leaving my previous job, I got this job. But I said I resigned from my previous job and I join this job. I produce all duplicates salary slips of previous company. So my income tax for previous job is Nil. This company offering me grosses salary of 417600 pa which includes Basic+DA=208800, HRA=104400, conveyance=19200, Medical=15000, other allowance=70200, EPF=21600, EPF employer=23688, Bonus=17393, group ins. Policy=3160, gratuity=10038, leave benefits=10038. Total CTC=481917. An amount of 1600 is deducted per months TDS from my salary. On what basis they are deducting this amount?
How can I save this Tax? I have only PPF account and I am depositing 2000 rs per month in it. Can I pay rent to my father as I am living in my father’s home?  How much rent I can pay to them?
Company is asking me for salary slips and form16 or form12B from previous company. can i give them form 26as?
Asked 9 months ago in Income Tax from Mumbai, Maharashtra
Hi Kamlesh

The company would be deducting TDS on the basis of your tax liability calculated fit the year.  You can claim refund at the time of return filing if TDS deducted exceeds the tax liability.

If you pay rent, then only HRA will be exempt. Otherwise, it will be a part of taxable income.

You can't give Form 16 as you don't have and if you give 26AS, they will come to know that no salary was credited to you for those 11 months and you'll be caught.
Lakshita Bhandari
CA, Mumbai
2016 Answers
63 Consultations

5.0 on 5.0

Hi kamlesh,

TDS is calculated based on your yearly income. Hence, in order to calculate your yearly taxable income, kindly let us know the date on which you joined the company.
Abhishek Dugar
CA, Mumbai
3452 Answers
155 Consultations

5.0 on 5.0

Hi Kamlesh, 

Deduction of TDS is based on taking entire year income. 
The company can ask you Form 16 and not salary slips. 
You have to make the calculation of TDS after taking into account all the deduction.. 
Vidya Jain
CA, Kolkata
614 Answers
13 Consultations

4.8 on 5.0

Hi,

In that case, your income is not liable to any TDS if you don't have any other income. You can ask your company why are they deducting TDS.
Abhishek Dugar
CA, Mumbai
3452 Answers
155 Consultations

5.0 on 5.0

It is the responsibility of the employer to compute the tax liability of its employees and deduct tax accordingly. Hence, the salary from the previous employer also needs to be considered for determining your tax liability. The employer also has to consider the declarations given by the employee for payment of rent, Life Insurance premium, tuition fee and other eligible expenses and investments. If you have not given this declaration, then the employer will not be able to allow these payments and accordingly deduct tax , which may be more than your actual tax liability. Sp you need to declare your eligible expenses and payments to your employer with documentary evidences to enable him to deduct your tax liability properly.
You can save taxes by investing in Life Insurance policies or specified mutual funds or NSCs or payments towards repayment of housing loan and tuition fees, if any.
B Vijaya Kumar
CA, Hyderabad
857 Answers
55 Consultations

5.0 on 5.0

Hello, 

They are deducting the TDS considering that your salary is above the basic exemption limit of Rs.250,000/-

Yes, you can pay rent to your father to claim deduction for your HRA which can be in the range of 10-12000/-.

You can also invest in LIC, PPF, NSC, ELSS, a total sum of Rs.150,000/- per year in order to save up on taxes.

Trust this clarifies your query. 

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

Thanking You. 

Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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