Tax Deduction !!!

[Former Member]

Hi All,

In our copmany we pay out bounus on the month of October & the bonus as usual vary employee to employee. From october onwards system deduct the income the tax till march subject to the gross salary of each employee.

Businees Reqmnt- Now the business need; if an employee get Rs.100000 bonus on the month of October. So that system should behaves like his income tax deuction start from 1^st April to 31^st  March each year subject to the bonus.

Regards

DR

[Former Member]

Dear All,

Business wants the tax should be calculated from 1st April onwards subject to the bonus of the employee. It's mandatory the bonus will pay on the month of October.

Please suggest is there any program or rules to apply into the system.

Regards

DR

[Former Member]

HI,

I understand your problem.

But this is Standard functionality, how do you assume that the employee has Taxable income and start deduction from April on-wards.

for example: Employee salary is 2,50,000/- after the exemptions of Conveyance, medical, Tax credit, etc... total taxable income is 1,90,000/- then employee is not taxable according to the TDS Slabs.

Now in the month of Oct' got 50,000/- bonus and added to the gross, then employee taxable amount is 2,40,000/- system will calculate TDS on 40,000/- and equal parts to the remaining months in the financial year.

Just tell me after running the live run in the system and statutory deductions done and deposited to the government accounts, how you can run again from the April month on wards ? system will not allow you to run like this.

Talk with your client and explain the process with example figures or with some test cases in the development server and convince them.

Best Regards.

[Former Member]

Hi Divya,

After giving Bonus amount it will add to the Gross for the whole year of the Employee wright?

The TDS will calculate on the Gross value only. If you are giving Bonus in the month of Oct' TDS deduct from the Oct' month for the added Bonus value in the Gross amount.

If you want to deduct from April on wards, you have to run retro payroll from the month of April, then if any changes in the Master in the middle of April to October period time those Arrears, Deduction carry forward,  brought forward, like these issues will raise and miss-match of figures will happen.

otherwise if you want to deduct on the particular Bonus amount TDS will deduct and give remaining Bonus to the employee, this has to done through Off-cycle.

Best Regards.

[Former Member]

Hi Ranjan,

If the bonus paid in the month of October say one lakh this should add to gross income only from the month of October.

So tax on bonus should calculate from October only.

If your company wants to deduct tax for bonus from April, as them to pay bonus in the month of April.

Regards,

Srikrishna