TDS deduction for non pan card holder below the 1.80Lakhs salary

[Former Member]

Hello Seniors,

i updated the sap note 1568264 - budget changes 2011

but the issue is with non pan card holders. Employees who are having morethan 1.60 lakhs salary, tds is deducting flat 20% & 2% & 1%

but according to the IT dept upto 1.80 Lakhs is exemption.

please suggest me the latest sap note for the non pan card holders to avoid deduction of TDS whose salary is below the 1.80 lakhs

thanks & regards,

praneeth kumar

[Former Member · Accepted solution]

Hi Praneeth,

As mentioned in the text of Note 1558475, in case Section 206AA applies, the applicable tax rate is compared with the average rate of tax and the higher of the two is applied on the taxable income. Average rate of tax is calculated based on the following formulae:

     Average rate of Tax =       Total Tax / Gross total Income

However, the threshold limit is exempted while calculating the taxes for the employee on the applicable rate.

Make sure the below mentioned Notes have been implemented in the given sequence before the implementation of Note 1568264:

SAP Note 1558475- Amendments to IT calculation notified under circular:08/2010.

SAP Note 1572614- Tax calculations inconsistent for emp. without a vaild PAN.

SAP Note 1575366- HINCALC0:Tax calculation inconsistent in case of invalid PAN.

With this your problem will be solved.

Regards,

Nishtha

[Former Member · Accepted solution]

thank you Nishtha,

can you tell me the slabs for the non pan card holders (men & women).

in my system all sap notes are implemented but still tds deducting for below the salary 1.80lacs, employees who are not having the pan card.

give me the slab code for the FY 2011-12 for the both pan card holders & non pan card holders.

thanks in advance

praneeth kumar

[sikindar_a · Accepted solution]

There will no slabs for the non pan card holders (men & women)

i feel 20% Tax is being deducted from the employee in case if is salary is less than 1 80 K please do check and let us know

[Former Member · Accepted solution]

yes itis deducting 20% and 2% and 1%

see example:

Gross Salary                   179,416.00

Exemption U/S 10                10,800.00

Balance                        168,616.00

Empmnt tax (Prof Tax)            2,500.00

Aggrg Deduction                  2,500.00

Incm under Hd Salary           166,116.00

Gross Tot Income               166,116.00

Agg of Chapter VI                5,646.00

Total Income                   160,470.00

Tax on total Income                 94.00

Tax payable and surcharg            97.00

Tax deducted so far                 58.00

Income Tax                          39.00

but my client asking that below 1.80lacs no income tax is there, why it is deducting?

regards,

praneeth kumar

[former_member210568 · Accepted solution]

Hi Praneeth,

For non-pan card holders, the SAP has been set the percentage as 20% in the table V_T511k. Please check the constant PNRTE. Based on this it will deduct the tax for non-pan card holders. System will check the IT0185, subtype 02, if Pan number is not available then tax will be deducted as per the constant table.

Thanks,

Sagar

[Former Member · Accepted solution]

hai friends,

TDS is deducting 20% if PAN details are not their in the IT0185.

but upto 2,00,000/- it has to exempted and after that 20% on remaining. but it is calculating 20% as on whole salary.

example:

Gross Salary                   349.812,00

Exemption U/S 10               9.600,00

Balance                          340.212,00

Empmnt tax (Prof Tax)         2.400,00

Aggrg Deduction                  2.400,00

Incm under Hd Salary       337.812,00

Gross Tot Income             337.812,00

Agg of Chapter VI              17.280,00

Total Income                    320.530,00

Tax on total Income           64.106,00

Tax payable and surcharg      64.106,00

Tax deducted so far               5.342,00

Income Tax                           5.342,00

it is calculated on whole total income (i.e., 320530*20% = 64106)

according to the IT rules upto 2,00,000/- is exemption

can any one help me

regards,

praneeth kumar

[Former Member · Accepted solution]

Hi

As per IT rules, Tax calulation for Non PAN holder:

His/Her highest tax slab is checked and compared with constant 20% and higher of both is taken to deduct tax on whole taxable income above the basic tax exemption limit. Basic tax exemption limit remain same for both PAN holder and Non PAN holder. Its Rs 200000 for FY 2012-13.

Please implement SAP Note 1706872 for Budget 2012 and then check

Amit Goyal

[sikindar_a]

Hi

It means even though if employee is below the tax exemption limit.....Tax is deduction for those employees for those who is not having pan card details