TDS Calculation For Employees

My additional income tax liability is more than INR 10,000 and I am not a senior citizen. Paying advance tax is a hassle for me. I don’t even want to pay penal interest for non-payment of Advance Tax. Is there any way I can avoid paying Advance Income Tax?

You can avoid paying Advance Income Tax if you report the additional income to the payroll department of your employer organisation in which case, the income tax on additional income would be deducted by the employer from your salary TDS On Salary,Deductions, Calculation. However, while reporting the additional income with the employer, ensure that the amount reported is adjusted for the TDS on such income.

Additional Income (in the form of interest on fixed deposit) Tax Rate as per Highest Tax Slab Tax if already deducted
Rs.1,00,000 35.54% 10% (Bank TDS)

Now, Total payable tax on Additional income of Rs.1,00,000 = Rs.35,540.

TDS deducted by Bank = Rs.10,000.

Net payable tax = Rs.25,540.

If you decide to report this additional income with the employer organisation, it would deduct income tax @ 35.54%. This would result in total TDS of 45.54% on the interest income tds deduction percentage in Bangalore. Hence, you will have to claim a refund at the time of tax filing tds calculation for salaried employees bangalore. To avoid this, you may report additional income of only Rs.71,863 (instead of Rs.1,00,000) so that the total TDS on the income of Rs.1,00,000 equals the amount of income tax thereon.

Amount to be declared with the employer organisation as an additional income =1,00,000 *25.54/35.54 = 71,863 (rounded off).

If you declare this income, your taxes will be deducted by your employer as 71,863 x 35.54% = Rs 25,540.

How much Advance Tax am I required to pay by 15 September, 2017?

  • You are required to pay 45% of the Income Tax as Advance Tax by 15 September, 2017.
  • For example: Additional Income (Interest from Fixed Deposit) is Rs. 1,00,000.
  • You fall under the tax slab of 30%.
  • Total tax payable on additional income is (Rs.1,00,000 *35.54%) = Rs.35,540.
  • TDS deducted by bank @ 10% is Rs.10,000.
  • Net payable tax is total tax less TDS i.e. Rs.35,540 – Rs.10,000 = Rs.25,540.

This net payable tax is supposed to be paid in 4 Quarters as mentioned in the below table:

Quarters Due Date Tax Percentage Total Tax Due Tax to be paid in each Quarter
1st Quarter 15 June 2017 15% 3,831 3,831
2nd Quarter 15 September 2017 45% 11,493 7,662
3rd Quarter 15 December 2017 75% 19,155 7,662
4th Quarter 15 March 2018 100% 25,540 6,385

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