ACCOUNTING
COURSE
DAY-35
TDS ON SALARY
Computation of Total Income
Particulars Details Amount
Income from Salary xxx
Income from House Property xxx
Income from Business or Profession xxx
Income from Capital Gain xxx
Income from Other Sources xxx
Gross Total Income xxx
Less: Deductions under Chapter VIA – Section 80 C to U xxx
Net Taxable Income xxx
Income Tax xxx
Less : Rebate u/s 87A xxx
Income Tax after Rebate xxx
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Computation of Total Income
Particulars Details Amount
Income Tax after Rebate xxx
Add : Surcharge (If any) xxx
Income Tax including Surcharge xxx
Add : Ed. Cess @ 4% xxx
Income Tax including Surcharge and Ed. Cess xxx
Add : Interest u/s 234A to 234 C xxx
Add : Late fee u/s 234F xxx
Income Tax including Surcharge, Ed. Cess, Interest and Late Fee xxx
Less : Advance Tax xxx
Less : TDS/TCS xxx
Less : Self Assessment Tax xxx
Net Tax Payable or Refundable (+/-) xxx
Income Tax Slab Rates
Link: [Link]
1) For Individual/HUF: In case of an Individual (resident or non-resident) or HUF or Association of
Person or Body of Individual or any other artificial juridical person
2) From FY 2020-21 onwards two slab rates are available in this category
Financial Rate Individuals (other than senior Senior Citizen (Resident) Super Senior Citizen (Resident)
Old Slab Rate: first option
year citizens), (who is 60 years or more at (who is 80 years or more at
any time during the previous any time during the previous
HUF, AOP, BOI, AJP & NR
year) year)
(Upto age of 60 Years)
2022-23 Nil Upto 2,50,000 Upto 3,00,000 Upto 5,00,000
&
5% -
2023-24 2,50,001 to 5,00,000 3,00,001 to 5,00,000
20%
5,00,001 to 10,00,000 5,00,001 to 10,00,000 5,00,001 to 10,00,000
30% Above 10,00,000 Above 10,00,000 Above 10,00,000
Special Tax Rates
for Individuals & HUF
Sec.115BAC
New Slab Rate: Default option
Total Income (Rs) Till FY Tax Amount Total Income (Rs) From FY Tax Amount Net Benefit in
2022-23 2023-24 23-24 vs 22-23
Up to 2,50,000 Nil zero Up to 3,00,000 Nil zero Zero
From 2,50,001 to 5,00,000 5% 12500 From 3,00,001 to 6,00,000 5% 15000 7500
From 5,00,001 to 7,50,000 10% 12500+25000 From 6,00,001 to 9,00,000 10% 15000+30000 15000
From 7,50,001 to 10,00,000 15% 37500+37500 From 9,00,001 to 12,00,000 15% 45000+45000 25000
From 10,00,001 to 12,50,000 20% 75000+50000 From 12,00,001 to 15,00,000 20% 90000+60000 37500
From 12,50,001 to 15,00,000 25% 125000+62500
Above 15,00,000 30% Above 15,00,000 30%
Note:
1. From Financial Year 23-24, New regime is default regime.
2. The option to pay tax at lower rates shall be available only if the total income of
assessee is computed without claiming specified exemptions or deductions
Deduction & Exemptions
not available in New Slab Rate
Head Deduction & Exemption not available
Salary Entertainment allowance & Professional Tax
Leave Travel concession u/s 10(5)
HRA 10(13A)
Allowance u/s 10 (14) except: Travel allowance to physically challenged Tour Allowance, Daily
Allowance, Conveyance Allowance for commuting between place of duty and residence
HP Interest u/s 24(b) for self occupied property
Set off of HP loss against other head
PGBP Sec.10AA, 32(1)(iia), 32AD, 33AB, 33ABA, 35(1)(ii), (iia), (iii), 35 (2AA), 35AD, 35CCC
IFOS Allowances for income of minor u/s 10(32)
Allowances to MP/MLA u/s 10(17)
Deduction Deduction u/s 80 C to 80 U (except 80JJAA and 80CCD(2))
Deduction & Exemptions
available in New Slab Rate
Following Deductions are allowed under new regime:
Deduction under sub-section (2) of section 80CCD (employer contribution on account of employee in
notified pension scheme) and section 80JJAA (for new employment) can be claimed
Standard Deduction of Rs.50000 on Salary/pension under Section 16 (ia) (w.e.f. A.Y. 24-25)
Income in the nature of family pension as provided under clause (iia) of section 57 of the Act
Deduction in respect of the amount paid or deposited in the Agniveer Corpus Fund as proposed to be
provided under sub- section (2) section 80CCH of the Act,
Interest on Home Loan on let-out property (Section 24)
Deduction & Exemptions in
Old vs New Slab Rate (F.Y. 23-24)
Particulars General Sr. Citizens Super Sr Citizen New Slab Rate
Interest paid on Self Occupied House Property Yes Yes Yes No
LTA /HRA /Professional Tax Yes Yes Yes No
Mediclaim, LIC, Medical Treatment, Yes Yes Yes No
Pension Schème, Tution Fee etc.
Donations (Including Political party) Yes Yes Yes No
Deduction 80C to 80U except 80CCD(2) & 80JJAA Yes Yes Yes No
Interest on Home Loan on let-out property Yes Yes Yes Yes
Deduction on Family Pension [Sec. 57(iia)] Yes Yes Yes Yes
Standard Deduction of Rs.50000 Yes Yes Yes Yes
80CCD(2) (Notified Pension Scheme) and Yes Yes Yes Yes
Section 80JJAA (For new employment)
Rebate u/s 87A of Yes Yes Yes Yes
(Lower of 12,500 & 100% of Income tax.) – Old
(Lower of 25,000 & 100% of Income tax.) – New
Income Tax Slab Rates
Health & [Link]: If any tax is charged for any specific purpose, It is called Cess.
HEC shall be charged @4% on the amount of income Tax.
Rounding off of Tax (Sec.288B): Rounded off in the multiple of Rs.10 similarly as in section
288A
Rebate u/s 87A
Rebate u/s 87A: This is available only to Resident individual, not to non resident individual or any
other person.
Rebate is allowed:
Under Old Tax Regime: only if total income is not exceeding Rs.500000, Rebate shall be allowed
upto Rs.12500
Under New Tax Regime: only if total income is not exceeding Rs.700000, Rebate shall be allowed
upto Rs.25000
Note:
Rebate shall not be allowed from LTCG u/s 112A
Not Allowed to HUF
Not allowed to NR
Allowed for LTCG/STCG u/s 111A, Casual Income ex. Lottery
Section 192 (TDS on Salary)
Section Type of Payment Deductor Deductee No TDS Rate of TDS
192 Salary Employer Employee Basic exemption limit Average Rate of tax on total
income
(if employee wants to opt
old income tax slab rate
then they have to inform
the employer)
Note: Part-Time Directors of the company, visiting professors & visiting doctors are covered u/s 194J and not covered u/s
192. The whole-time directors are employees of the company and hence TDS is deductible u/s 192.
Computation of Income from Salary
Particulars Details Amount
Basic Salary xxx
Add: Misc. Benefits Like Bonus, commission etc. xxx
Add: Allowances xxx
Less: Exempt xxx xxx
Add: Perquisites xxx
Add: Retirement Benefits xxx
Less: Exempt xxx xxx
Gross Salary xxx
Less: Deduction u/s 16
(a) Standard Deduction xxx
(b) Entertainment Allowance xxx
( c) Professional Tax xxx xxx
Income From Salary xxx
House Rent Allowance (HRA)
Sec.10 (13A)
If Employee
Not paying any Paying Rent
Rent or staying
in his own house
Least of Following is Exempt:
No Exemption Actual Amount of HRA
Available
Rent Paid Less 10% of Salary
HRA fully 50% of Salary (Delhi, Mumbai, Kolkata,
Taxable Chennai) & 40% of Salary (for other
cities)
Salary= Basic Salary+ DA (In terms) +
commission (if Turnover based)
Note: It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more
than Rs.1,00,000 [Circular No. 08/2013 dated10-10-2013].
House Rent Allowance
Example
Salary of Ram Amount (Yearly)
Basic Salary 2,00,000
DA (as per terms of employment) 1,00,000
Bonus 50,000
House rent allowance (HRA) 24,000 (2,000 P.M.)
Rent paid during the year 36,000 (3,000 P.M.)
Basic salary 2,00,000 Particular Amount
Dearness allowance 1,00,000 Actual HRA received 24,000
Total 3,00,000 Rent paid Less 10% of salary 36,000 – 30,000
10% of salary 30,000 = 6,000
40% of salary 1,20,000 40% of salary 1,20,000
SECTION 115BAC: An employee who opts Available exemption (least of the above) 6,000
for the provisions of section 115BAC would
not be entitled for HRA Taxable HRA (24000-6000) 18,000
Deductions from Salary
Standard Deduction 16(ia)
• Standard deduction of Rs.50000
• or the amount of salary,
whichever is lower.
(amended by FA 2019)
SECTION 115BAC: An employee who opts for the provisions of section 115BAC would also be entitled for standard
deduction w.e.f A.Y. 24-25
Entertainment Allowance
16(ii)
This deduction is specifically allowed to govt. employees only as follows:
Actual amount received
20% of Basic (only) Salary
Rs.5000
(Whichever is Lower)
It is fully taxable for all other employees.
Section 192 (TDS on Salary)
Example 1 – Salary Rs. 20,000 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 2,40,000 Rs. 2,40,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 1,90,000 Rs. 40,000
Tax on Total Salary Rs. NIL Rs. NIL
Add : Ed. Cess @ 4% Rs. NIL Rs. NIL
Total tax Payable Rs. NIL Rs. NIL
Amount required to be deposited each month (Divide by 12) Rs. NIL Rs. NIL
Section 192 (TDS on Salary)
Example 2 – Salary Rs. 30,000 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 3,60,000 Rs. 3,60,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 3,10,000 Rs. 1,60,000
Tax on Total Salary (after deduction of Rebate u/s 87A) Rs. NIL Rs. NIL
Add : Ed. Cess @ 4% Rs. NIL Rs. NIL
Total tax Payable Rs. NIL Rs. NIL
Amount required to be deposited each month (Divide by 12) Rs. NIL Rs. NIL
Section 192 (TDS on Salary)
Example 3 – Salary Rs. 40,000 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 4,80,000 Rs. 4,80,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 4,30,000 Rs. 2,80,000
Tax on Total Salary (after deduction of Rebate u/s 87A) Rs. NIL Rs. NIL
Add : Ed. Cess @ 4% Rs. NIL Rs. NIL
Total tax Payable Rs. NIL Rs. NIL
Amount required to be deposited each month (Divide by 12) Rs. NIL Rs. NIL
Section 192 (TDS on Salary)
Example 4 – Salary Rs. 50,000 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 6,00,000 Rs. 6,00,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 5,50,000 Rs. 4,00,000
Tax on Total Salary (after deduction of Rebate u/s 87A) Rs. NIL Rs. NIL
Add : Ed. Cess @ 4% Rs. NIL Rs. NIL
Total tax Payable Rs. NIL Rs. NIL
Amount required to be deposited each month (Divide by 12) Rs. NIL Rs. NIL
Section 192 (TDS on Salary)
Example 5 – Salary Rs. 60,000 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 7,20,000 Rs. 7,20,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 6,70,000 Rs. 5,20,000
Tax on Total Salary (after deduction of Rebate u/s 87A) Rs. NIL Rs. 16,500
Add : Ed. Cess @ 4% Rs. NIL Rs. 660
Total tax Payable Rs. NIL Rs. 17,160
Amount required to be deposited each month (Divide by 12) Rs. NIL Rs. 1,430
Section 192 (TDS on Salary)
Example 6 – Salary Rs. 66,667 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 8,00,000 Rs. 8,00,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 7,50,000 Rs. 6,00,000
Tax on Total Salary Rs. 30,000 Rs. 32,500
Add : Ed. Cess @ 4% Rs. 1,200 Rs. 1,300
Total tax Payable Rs. 31,200 Rs. 33,800
Amount required to be deposited each month (Divide by 12) Rs. 2,600 Rs. 2,817
Section 192 (TDS on Salary)
Example 7 – Salary Rs. 70,000 per month
Income Chargeable under the head “Salaries” inclusive of all perquisites New Regime Old Regime
Salary Rs. 8,40,000 Rs. 8,40,000
Less : Standard Deduction Rs. 50,000 Rs. 50,000
Less : Deduction under Section 80C NIL Rs. 1,50,000
Net Taxable Income Rs. 7,90,000 Rs. 6,40,000
Tax on Total Salary (after deduction of Rebate u/s 87A) Rs. 34,000 Rs. 40,500
Add : Ed. Cess @ 4% Rs. 1,360 Rs. 1,620
Total tax Payable Rs. 35,360 Rs. 42,120
Amount required to be deposited each month (Divide by 12) Rs. 2,947 Rs. 3,510