Over deduction of TDS

[Asked by Guest]

Hi All,

Can a company over-deduct TDS on an employee. For e.g. as per the prevalent tax structure by TDS for the month of March comes to around 14,750/- however the company is persistent on cutting TDS at the rate of 16,000/-. The explanation given is it is good to cut extra, you can always get it back by filing your returns. Can you validate this explanation, please.

Regards,

Neil

[Ganeshan Kalyani]

Sir, this practice is incorrect in asmuch as the income tax slab is known to employer in the beginning of the year itself. Why one should pay extra hard earned money to the government when getting refund would of course take months time. They are supposed to tax what is actually deductible. Also there is responsibility of yours as well in giving correct income tax declaration and finally when declaration is actualised it is your responsibility to provide those proofs which will enable them not to deduct Tax at source more than what is deductible. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Thanks a lot for giving correct information. It has enriched my knowledge as I am a layman in Income Tax matters.

[Ganeshan Kalyani]

Sir, thanks for your appreciation. It encourages me. Thanks.

AI Summary

Over-deduction of TDS: employers must withhold only the tax actually payable; employees should supply declarations to prevent excess withholding.
Over-deduction of tax at source occurs when an employer withholds more than is actually deductible under income tax slabs. Employers must compute TDS in accordance with Tax Deducted at Source rules using the employee's declarations and proofs so withholding reflects the tax actually payable. Employees must provide accurate declarations and supporting documents to enable correct withholding; refunds through return-filing may correct excess deduction but do not justify routine over-deduction by employers.