My wife works part-time in a school, and earns Rs. 48,000 per year. Should her school cut TDS?

Question

The school is deducting 10% TDS every month, even though we have informed them that we do not need to pay any income tax in her account since she has no other sources of income. Her entire income is put in her PPF account every year. What can we do?

Answer 1

You have two options in this regards.

1. Your wife need not pay any tax since her income is well within the Exemption limit. So can ask the School to Refund the Tax deducted in her Salary. ( If the tax deducted has not been paid to the IT Department)

2. Otherwise you have to cliaim refund from the Income TAx department, if the Tax deducted has been paid by obtaining Form 16 from the Scool.

I think your wife can claim refund only because the Tax deducted by the school would have been paid by the Scooh to the IT department.

Regards

Sriram

Answer 2

The school should not deduct TDS as TDS is deducted based on projected income for the year and tax on that income.

Read this and ask school to read this:

http://mytaxes.in/index.php?topic=12.0

Answer 3

I am not sure I understand this - you said that the entire "income" is put in PPF account???

Does this mean that zero money is given to her every month, or did you intend to mean that the TDS (as you said) is put into PPF account?

If the first case is a yes, she should look for a job switch.

If it is second case, then the school is not deducting TDS but is deducting PF which is her retiral benefit.

It would help if you could elaborate the problem.

Added:

OK - so saving into PPF is your option - good.

1. If the School is issuing Form-16, then you claim this deducted amount as returns.

2. If the school is not issuing Form-16, there is only the legal way to approach this. One possibility could also be that the school has mentioned about this deduction in their appointment order. If yes, then once again your signature has stated that this is acceptable.

I hope this helps.