Income Tax India : Help Plz.?

Question

For the financial year 2007-2008 I worked with 2 companies. First company I worked from 2007 April 1st to 2007 May 21st (just for one and half months).

Second company I worked from 2007 May 21st to till date.

Now I got the form 16 from both the companies. Both companies have deducted the correct tax from me after deducting my investments amount of 82,000 Rs for the financial year 2007 -2008. But now when i showed the both orm16 to one tax consultant he said I will have to pay govt another 10 k Rs to tally the tax calculation due to the reason I changed the company. Bcz of that there is a high salary change. I really dont understand when my both companies have

deducted full tax from my salary and again I am asked to pay . If some body could make me explain this would be really helpfull.

My first comapny deducted 4365 Rs and second company deducted 50,000 Rs.

Answer 1

The TDS is like paying your income tax in advance. It may or may not be the correct amount. If you paid less than your tax liability as per your tax return, then you must pay the balance amount.

Complete your income tax return. Calculate your tax due based on your income and deductions. Then show what you have already paid (the TDS amount). If you still owe the tax, you must pay it.

If your income is more than Rs. 1,10,000 in 2007-08, you must file tax return.

Read: http://mytaxes.in/index.php?topic=16.0

Answer 2

This is easy and understandible - I had the same problem 2 years back when I switched Companies for the first time.

Note: I am using hypothetical values.

The first Firm deducts TDS on the projection that the same pay (as in April 2007) continues for the entire FY. In this case let us say your annual income if you had continued in the first firm was INR3,00,000 per annum; with 82000 as your investment for the FY, the tax could be about 18128 per annum for which you attracr a monthly TDS of 1510 a month. In two months you have paid only 3020 as TDS for an income of 50,000 (300000/12*2).

In the second firm where you have worked for 10 months, your monthly pay could be 50,000 which means you earn 5,00,000 in the second firm (for 10 months) which attracts total TDS of 71070 in the FY which attracts a TDS of 7107 a month.

In your case you might not have declared your previous emloyer's income and TDS details which is why this problem arises.

Now clubbing both for the FY, your total earnings is 5,50,000 which attracts a TDS of 86520 a year whereas you have paid a tax of only 71070+3020 = 74090 which means during returns you need to pay a Self Assessment Tax of 12430.

You can check these correctly with a tax calculator; one such for FY2007-08 is at http://prrajan-tax.blogspot.com/2008/01/... for download.

The reason for this difference is that you tax slabs have changed considerably. The best way to avoid surprises is to declare income from Previous Employer in the new company.

Answer 3

Mr Biju

You have not provide the details of your income so how can one tell you whether the consultanct is right or wrong. Send the detail of your income then the calculation can be made. You may write at [e-mail]