TDS should not be deducted, if the salary is ZERO

[Former Member]

Dear All,

I am processing salary of one employee ( April 09 ) and he was absent full month. His salary is zero in total but system is deducting TDS. TDS should not be deducted, if the salary is ZERO. what to do for this ?

With Regards

Ashwani

[Vivek_V · Accepted solution]

Hi,

Income Tax deduction is statutory deduction and it gets deducted irrespective of the net salary payable to an employee in a month.

Note that the annual income tax is spread into number of months in a year and deducted accordingly. As such in case employee is not getting any salary in amonth his tax will get deducted. If it is not done then it may lead to statutory default.

For example, an employee annual tax liability is Rs 12000 and Rs 11000 has been deducted till February. Now in the month of March employee is on LWP and does not get any salary. If you do not deduct the remaining tax of Rs 1000 (or lesser amount as his taxable income will reduce due to LWP) then it will mean less deduction of tax and tax authorities will levy penalty on the company. So you have to deduct tax. Also you can not carry forward this amount to next month as the next month falls in different financial year.

Hope it helps.

VK

[Former Member]

Hi Ashwani,

wat are the values of /124, /125 and /416 stored in the final RT.

Regards,

Praveen

[Former Member]

Dear Praveen,

/124 and /125 are not coming in RT and /460 showing gross salary( yearly ) of employee.

Ashwani

[Former Member]

well, in that case it seems kind of problem inside the payroll driver/ schema in ur system.

Because /460 will never hold the gross amountin normal scenarios.

have u done any customization or change the source code of the INTAX payroll function.

Regards,

Praveen

[Former Member]

By mistake wrong fugure given. In /460 it is showing income tax. RT table as below.

• /113 ESI Basis N 500000.00 24,231.00

• /120 Nom. ExGrat 500000.00 24,231.00

• /121 Nom. ExGrat 500000.00 24,231.00

• /129 Voluntary R 24,231.00

• /136 1DSD Basis 18,431.00

• /3FE Interest ac 75.00

• /401 Projection 11.00

• /403 Marginal ta 10.00

• /404 Mrgnl tax r 10.00

• /410 Ann Reg Inc 266,541.00

• /416 Gross Salar 266,541.00

• /418 Balance 266,541.00

• /426 Incm under 266,541.00

• /430 Gross Tot I 266,541.00

• /434 Total Incom 266,540.00

• /436 Tax on tota 11,654.00

• /446 Tax payable 11,654.00

• /447 Sec and Hig 117.00

• /449 Education C 233.00

• /450 Tax payable 12,004.00

• /458 Net tax pay 12,004.00

• /460 Income Tax 1,000.00

• /4ME Monthly Edu 1,941.75 19.42

• /4MH Monthly Hig 970.87 9.71

• /4MI Monthly Tax 22,211.67

• /4MT Monthly Tax 97,087.38 970.87

• /840 Diff.curr.f01 188.00

• /846 Total unpai01 208.00

3 /001 Valuation b01 1,211.55

3 /002 Valuation b01 1,211.55

3 /119 PTax Basis 01 500000.00 24,231.00

3 /12N Monthly Reg01 24,231.00

• /550 Statutory n 1,000.00-

• /561 Claim 1,000.00

[Former Member]

Hi Ashwini,

Please note that /129 is getting generated and that is getting projected for the rest of the year and

thats why the whole issue is there.

As pe rmy thinking employee has VRS and thats why he is paying tax. If this is not the case then

check teh configuration of the /129 and the wage type by which u r giving VRS which is containing

the amount of Rs. 24231.

regards,

Praveen

[Former Member]

Dear Ashwani,

If you dont want to deduct the Income tax amount, maintain MVT1 wage type either in 14 or 15 info type for that period. Then IT will not deducted from the emp salary. Just try it out and let me know.

Thanks & Regards

Bharathi

[Former Member]

Hi,

You can maintain the minimum net pay amount and carry forward rest of the amount to the next month and deduct the same from the next month salary. System will automatically stores the amount in Statutory net diff and reduce the same in the next month.

Good Luck.

Om.

[Former Member]

Dear Om,

Thanks for reply.

Will you please give more light on this. Where and how to maintain minimum net pay amount. If you can provide steps it will be more helpful.

With Regards

Ashwani