TDS as per Income Tax Slab Rate for Salried Employees

For Salaried Employees,We do not deduct TDS at Flat Rate of 10%/1% etc

We first calculate Annual Tax as per Income tax slab rate and divide it by 12

Following Steps are Involved

1. Take Monthly Salary of Employee
2. Calculate Annual Salary by Multiplying by 12
3. Reducing Standard Deduction
4. Calculating Income from Salary(After Standard Deduction)
5. Calculate Tax,Rebate and Net Tax
6. Calculate Cess
7. Tax+Cess
8. Divide it by 12 to get Monthly TDS

STANDARD DEDUCTION FOR SALARIED EMPLOYEES 

 

 FY 2017-18

No Standard Deduction was available

 FY 2018-19

 Employees  get a Standard Deduction of 40000 per annum, Hence,their Income will be reduced by 40000 while calculating tax

FY 2019-20

Now all Employees will get a Standard Deduction of 50000 per annum, Hence,their Income will be reduced by 50000 while calculating tax

Example

PARTICULARS	FY 2017-18	FY 2018-19	FY 2019-20
MONTHLY SALARY	30000	30000	30000
ANNUAL SALARY	360000	360000	360000
STANDARD DEDUCTION	0	40000	50000
INCOME FROM SALARY	360000	320000	310000

 

Slab Rate for F.Y  2019-20

There is Rebate of  12500 if Income between 250000-500000

 Standard Deduction of 50000 p.a is available to salaried Person.

Lets study this step by step

Calcualtion of Tax

Calculation of Rebate

FY 2019-20

If Income between 250000-500000,Then 12500 Rebate is now available

Rebate cannot be more than tax

(Earlier,if income was between 25000-350000,there was 2500 Rebate)

 

Example 1

Suppose an Employee gets a Salary of 15000 per month.

What is Income Tax Payable by him?

Example 2

Suppose an Employee gets a Salary of 35000 per month.

What is Income Tax Payable by him?

Example 2 Continue

What is monthly TDS to be deducted in this case?

Example 3

Suppose an Employee gets a Salary of 75000 per month.

What is Income Tax Payable by him?

Example 3 Continued

What is monthly tax to be deducted in this case?

Assignment

Complete the following table in Excel

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