Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

Explaining the Basics of TDS Calculations in India: What All is Factored?

Tax deducted at Source, or simply TDS, is an indirect form of tax collection, wherein an employer or organization is required to occasionally deduct a fixed percentage of employees’ salaries. The practice is a mandate for every employer in India, as they disburse salaries to employees. The government makes sure that people pay their taxes. TDS calculation isn’t a uniform procedure, as the amount to be deducted depends on the total monthly or annual income of an individual. For employers, it’s important to deduct TDS and timely deposit the amount in the government account to stay compliant with tax guidelines. Most organizations do the job manually, which is next to impossible if Calculations are to be done for hundreds and thousands of employees. The blog post explains the basics of TDS in India and the way to simplify the whole process.

Calculation
Employers need to deduct TDS before paying salaries, which is a mandate as per government guidelines. Since TDS is calculated at the first point of origination of any income, savings are not factored when calculating the amount. That said, your employees can claim refunds for any excess TDS amounts after furnishing proof that qualify as “savings” to the Income Tax Department.

Deduction
Income and expenditure such as salary, bank interests, and pretty much everything that counts as income, comes under the scope of TDS deduction. The source of any income is referred as the “deductor” and the person receiving the money, such as an employee, is called a “deductee.” In other words, the deductor can be an organization or a person; however, they must withhold the TDS amount before making any payments. The money is then forwarded to the tax collecting body of the government.

Advantages

  • A definite method to collect taxes
  • Prevents tax evasion
  • Minimizes hassles for deductors and deductees, as the money goes directly to the government
  • A win-win proposition for the government and taxpayers, whether deductor or deductee

Wrapping Up
Manually calculating the TDS amount for employees in your organization can be overwhelming for the accounts department, especially when the head count ranges from a few hundred to thousands. Chances of human errors are high in manual calculations, leading to late submissions and hefty penalties. To streamline your TDS calculation process, go for a Tds Calculations software that can process the TDS calculations of thousands of employees without any errors. If you are looking for a reliable financial management software that not only helps with TDS calculations, but also in general accounting tasks; eLite Business Automation has got you covered. Our finance management module can help you with all aspects of TDS calculations, minimizing manual efforts. To learn more about our business automation products and services, fill out our contact form. You can also call us at (+91) 120 6127 000.

The post Explaining the Basics of TDS Calculations in India: What All is Factored? appeared first on .



This post first appeared on ELite BAM, please read the originial post: here

Share the post

Explaining the Basics of TDS Calculations in India: What All is Factored?

×

Subscribe to Elite Bam

Get updates delivered right to your inbox!

Thank you for your subscription

×