Assistance required in TDS calculation for the new employee in the middle of FY

[Jitender Sharma]

Dear Sir/Madam,

 

I have two queries first one is Medical allowance is fully taxable or not. If it is taxable how could we adjust employees bill of Rs. 15000/- per year  as per sec 10 of income tax act

and the second one is I need help in the calculating the exact tax for the new employee he didn't gave form 16 of previous employer for current F.Y.; instead he gave Form 26AS for the first quarter. HIS Salary details for Previous employer as per salary slips are :: 

 

Month	Amount	Company            TAX Deducted
Apr	46620.00		Previous Company	Rs. 1,000/-
may	46620.00		Previous Company	Rs. 1,000/-
june	46620.00		Previous Company	Rs. 1,000/-
july	46620.00		Previous Company	NIL

August

23310.00

Previous Company

NIL

 

 

His salary Details is as follow for our company. Joining Date  : 15-08-2013

 

BASIC	31000.00
HRA	15500.00
MEDICAL	1250.00
CONVEYANCE	800.00
TPT ALLOWANCE	1600.00
SPECIAL ALLOWANCE	11850.00
TOTAL	62000.00

 

Please advice regarding the exact amount of tax to be deducted and how it need to be calculated

 

Thanks in advance

[MANDAVILLI RAMAKRISHNA]

you can rely on 26AS instead of form no. 16.

medical allowance exempt to the extent of medical expenses incurred 

transport allowance is exempt to the extent of incurred amount

HRA as per section 13A read with rule 2A

you can rely on the details given by the employee regarding on previous incomes

AI Summary

Tax treatment of allowances: apply exemptions for medical, transport and HRA before computing TDS for mid year joiners. Medical allowance is exempt to the extent of medical expenses actually incurred; transport allowance is exempt to the extent of incurred transport costs; HRA exemption must be computed under the statutory HRA rules. Where the employee lacks Form 16, the employer may rely on Form 26AS and the employee's declared prior salary and tax details, aggregate prior income and tax credits with projected current earnings, apply the applicable exemptions, and compute TDS on the resulting taxable income using standard salary tax calculation methods.