How to Deduct Tax at Source on Salary Step by Step
Step 1
Gross Salary (including salary received from former employer, if details are submitted) and the value of benefits or perquisites or amenities provided free of cost or at concessional rate to the employee.
Gross Salary (including salary received from former employer, if details are submitted) and the value of benefits or perquisites or amenities provided free of cost or at concessional rate to the employee.
Step 2
Deduct the receipts which are exempt from income tax under Sec.10, such as, leave travel concession, gratuity, commuted pension, leave salary, retrenchment compensation, payment on voluntary retirement, house rent allowance, allowances specified u/s 10(14)etc., if include in income from salary.
Deduct the receipts which are exempt from income tax under Sec.10, such as, leave travel concession, gratuity, commuted pension, leave salary, retrenchment compensation, payment on voluntary retirement, house rent allowance, allowances specified u/s 10(14)etc., if include in income from salary.
Step 3
Allow deduction for entertainment allowance, if eligible, and also Professional tax, if any to arrive at net taxable salary. Standard deduction is not available from A.Y. 2006-07.
Allow deduction for entertainment allowance, if eligible, and also Professional tax, if any to arrive at net taxable salary. Standard deduction is not available from A.Y. 2006-07.
Step 4
Allow set off of any loss under the head ‘House Property’ relating to a self-occupied residential house on account of interest on loan subject to a Maximum of Rs. 30,000.(Rs. 1,50,000 in case of loan taken on or after 1.4.1999 for construction or purchase of house within three years from the end of the financial year in which the loan was taken). Particulars of such loss shall be furnished by the employee in a statement duly verified by the employee, along with a certificate from the person to whom interest is payable on the capital borrowed.
Allow set off of any loss under the head ‘House Property’ relating to a self-occupied residential house on account of interest on loan subject to a Maximum of Rs. 30,000.(Rs. 1,50,000 in case of loan taken on or after 1.4.1999 for construction or purchase of house within three years from the end of the financial year in which the loan was taken). Particulars of such loss shall be furnished by the employee in a statement duly verified by the employee, along with a certificate from the person to whom interest is payable on the capital borrowed.
Step5
Deduct the amount invested in LIC,P.F.,P.P.F., repayment of housing loan, subscription of certain equity shares or debentures tuition fees etc. subject to maximum of Rs. 1,00,000. (All About Section 80 C)
Deduct the amount invested in LIC,P.F.,P.P.F., repayment of housing loan, subscription of certain equity shares or debentures tuition fees etc. subject to maximum of Rs. 1,00,000. (All About Section 80 C)
Step 6Deduct the amount contribution to notified Pension Scheme by employees of Central Government or any other employer.
Step 7
Deduct the amount of health insurance premium (Mediclaim), subject to a maximum of Rs. 15,000.
Deduct the amount of health insurance premium (Mediclaim), subject to a maximum of Rs. 15,000.
Step 8
Deduct the amount of expenditure incurred, if any, on the medical treatment, training and rehabilitation or the amount deposited in a scheme of LIC or UTI for the maintenance of a handicapped dependent relative. Deduction allowable is Rs. 50,000 (Rs. 75,000 in case of severe disability), irrespective of the amount of expenditure incurred. (Section 80 DD)
Deduct the amount of expenditure incurred, if any, on the medical treatment, training and rehabilitation or the amount deposited in a scheme of LIC or UTI for the maintenance of a handicapped dependent relative. Deduction allowable is Rs. 50,000 (Rs. 75,000 in case of severe disability), irrespective of the amount of expenditure incurred. (Section 80 DD)
Step 9
Deduct the amount paid to a financial institution or an approved chartiable institution, towards interest on a loan taken for higher eduction, without any limit.
Deduct the amount paid to a financial institution or an approved chartiable institution, towards interest on a loan taken for higher eduction, without any limit.
Step 10
Deduct the amount of house rent paid by the employee for his own residence, subject to specifieed conditions. Maximum deduction allowable is Rs. 2000 p.m.
Step 11
Deduct allowance for physical disability.
Deduct the amount of house rent paid by the employee for his own residence, subject to specifieed conditions. Maximum deduction allowable is Rs. 2000 p.m.
Step 11
Deduct allowance for physical disability.
Step 12
Total Income as computed above should be rounded off to the nearest multiple of Rs. 10.
Total Income as computed above should be rounded off to the nearest multiple of Rs. 10.
Step 14
Divide the amount of tax as calculated in Step 13 by twelve, to arrive at ‘monthly deduction’ of tax from salary. Check also Procedure for deposit or file TDS on Salary
Divide the amount of tax as calculated in Step 13 by twelve, to arrive at ‘monthly deduction’ of tax from salary. Check also Procedure for deposit or file TDS on Salary
Don't Download any thing before free Registration on the TOP of this site and check your Inbox for clicking on activation link of Feed Burner.
