Jan 152013

TDS Projections for Salaried Employees.

TDS is one of the easiest way of collecting income tax from Employee’s Salary who come under tax payer’s bracket. This sort of income tax from the income of an employee is collected on the day of making salary payment at source and is  deposited to the credit of the Central Government in a given time frame.

Employer does the Tax projection of Employees in the beginning of the year. Employees can plan their Investments to save tax. Investments can be done in Life Insurance Schemes, Tax Savings Mutual Funds, National Saving Certificates, Long term Bank deposits, Education fees paid for the children, Medical Reimbursements, Provident Fund etc.  Based on this declaration, Employers will deduct tax from the projected taxable salary for the whole year.

TDS is deducted from the monthly salary of an employee before making payment of salary to an employee. The TDS is deducted by deductor who is an employer and from whose salary the tds is deducted is deductee.

Benefits to the Employee :

1.TDS is cut off every month and the entire record is maintained. An employee does not need to pay the large sum of tax at one time.
2. As the TDS projection is generally given in the beginning of the year, Employee can plan his investments to save tax.
3. Employee comes to know the TDS, which is done every month by an employer and taking into consideration the amount which he actually gets in his hand, he will be able to plan his monetary transaction or financial investment.
4. Employee does not have to worry about maintaining a record of tds transaction and it becomes employer’s burden of handling and keeping an employee’s record of tax deducted at source.