TDS Configuration

Under Section 192 of the Income Tax Act, every employer who is paying a salary income to his employee is required to deduct TDS from the salary income if it exceeds the basic exemption limit.

However this configuration can be incorporated in the system so that the TDS for those employees who's salary income exceeds the basic exemption limit is deducted from their gross salary.

Roles

Finance Admin

Path

Finance Admin >> Salary Configuration >> Tax Structure

Functionality

1. Tax Slab

• Under the Income Tax Act, 1961 – the percentage of income that is payable as tax to the Government is based on the amount of income that a person has earned during a year.
• Keeping in mind, the fact that the outgoing of tax is tougher for people earning lower income –in India the rate of tax gets higher for people earning higher amounts in a financial year. This is done by applying a different tax rate for different amounts of annual income. These slabs are tweaked by the government in the annual budget announcements.
• Hence for any given financial year the Tax slabs can be configured in the system. The tax slabs can be created individually for Male / Female, Senior Citizen Male / Female, Super Senior Citizen Male / Female employees.
• The system provides the functionality to deduct the TDS (Tax Deduction at Source) on monthly basis. Its is the responsibility of the employee to deposit this amount to the government as TDS for whom the TDS amount has been deducted.

1. Tax Exemptions
2. Tax Additional Configuration