| How the Tax generally be deduted for Income from Salary? Generally employers pay the employees' salary after deduting their PF contribution, Income Tax and Professional Tax. In case of Income tax deduction- there are some procedures to be followed by most of the companies which are listed below: 1. First, the finance/HR department of an organisation will send a "Proposed Investment Declaration Form" to all its employees (This should be done in the beginning of the every financial year) The proposed investment form will have the various tax saving investments details 2. All employees should give the details in the form regarding their expected investments for that particular financial year (April to March). These investment details that every employee is providing is not necessarily be their actual investments for that financial year 3. Based on the details that each employee provided, the finance department will calculate each employee's tax liability for that particual financial year and that would be converted into monthly installment and will get deducted every month under the head of Income Tax 4. Then again the finance department will send a "Actual Investment Declaration Form" to all its employees and here all employees are expected to give only their "ACTUAL" Investments details along with the supportive documents for their investments for that financial year (This will be done generally in the end of the financial year, Say February) 5. Obviously there will not be any difference in the Tax liability, if there is no difference in the details provided on the proposed and actual investments forms - if there is any difference, then the finance dept will again calculate his/her tax liability based on the "Actual investment Declaration form" and deduct his tax accordingly. 6. Then again for the next financial year the process will start from point 1 Please let me know if you need any further information/clarifications, i would be glad to assist you Thanks, Venkat
|
|
