In this help topic, you will learn how to configure TDS, calculate TDS, and generate STI report and Form 16. TDS on salary is mandatory for all employees earning taxable income.
You have to deduct TDS on salary based on the estimated income-tax computed. Compute the estimated annual income of the employee first. Then other income or losses are deducted along with allowed deductions declared by the employee, and income tax is computed on the estimated annual taxable income. The estimated annual income tax is then divided by the number of months applicable, and TDS is deducted every month from salary. You have to remit the TDS on salary with the Government Treasury.
To calculate TDS:
- Click on TDS menu and Select TDS calculation in the sub-menu.
- In the screen that opens, select Financial year & employee.
- Select Old or New regime
Click on List.
TDS calculation displays various information mainly, Salary details, Deductions u/s 16 & Chapter VI-A deductions.
Click on Salary details to view the Salary Component details of the employee.
Chapter VI-A Deductions
Click Chapter VI-A deductions button to display calculated deductions under Chapter VI-A.
Click on Email to email TDS reports to employees.
Click on the STI report, to generate State of Income Report
Form 16 Export
Click on Form 16 Export button to generate Form 16 Report.
Divide Tax payable as 12 equal divisions and allot in each month. Depending on the Payroll settings, TDS will reflect in the Monthly Salary.