Is it compulsory for Indian companies to deduct TDS on salary paid to employees or can their employees manage their taxes on their own?
Before analysing the provisions, let’s see what the language of bare Income Tax Act says in this regard. Section 192 deals with the provisions related to Tax deducted at source on salary payment.According to Section 192,“Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.”Hence, according to the provisions mentioned in Section 192 of Income Tax Act, all persons have to deduct TDS on salary paid to the employee(s).Employer will deduct TDS at the time of paying the salary if the total income of the employee (Gross Total Income minus Deductions declared by the employee) is more than basic exemption limit.According to section 2(31), Person includes -(i) an individual,(ii) a Hindu undivided family,(iii) a company,(iv) a firm,(v) an association of persons or a body of individuals, whether incorporated or not,(vi) a local authority, and(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.Hence, in your case, the company has to mandatorily deduct TDS while paying the salaries to the employees.
Why is the PAN number of the landlord required for HRA?
Earlier, tax payers didn't have to provide owner's PAN unless the rent was Rs. 1,80,000 p.a or Rs. 15,000 per month. However, since 2013, IT department decided to lower the limit to declare landlord PAN to Rs. 1 lakh p.a or Rs. 8,333 per month. The reason is because it believes there are a lot of dummy receipts being submitted while claiming HRA exemption.Under section 10 (13A) of the Income-tax Act, if you are a salaried individual and get HRA from your employer, you are entitled for tax exemption. In order to claim tax exemption, you need to produce house rent receipts. For administrative ease, salaried employees who get house rent allowance up to Rs.3,000 per month don’t have to produce rent receipt.This concession is only for the purpose of tax exemption at source. However, the assessing officer can ask for a receipt, if required, as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent.For any rent above Rs.3,000 per month, you have to produce a rent receipt to claim tax exemption.