TDS on Salary

[Reshma kochar]

Hello Members,

What to do in a case where one of our new employee is going onsite for a long period on US payroll, as will be considered a non resident then. Right now he gets only one month salary in India, our payroll team is confused about TDS provision about his one month salary? Should be this on one month salary ( non tds as its less than tax slab) or on annual estimated salry ?

[T Ravi Chand]

As that is the total salary paid in India for the whole year, no need to deduct the tax



[Reshma kochar]

Hi, Ravi,

In our view, while deducting TDS u/s 192, would it be feasible to consider any upcoming future event which is not so determined ? More likely it would be saferside to deduct TDS on the basis of his annual salary based on his current one month salary, to aviod any further discripancies with TDS rules.

Until he is on company's payroll, we should treat him as a regular employee and follow the TDS rules.

AI Summary

TDS on salary: treat India-paid remuneration as taxable basis; annualise pay for deduction if residency status is uncertain. If only a single month's salary is paid in India and that payment is below taxable thresholds, no TDS need be deducted on the India-paid remuneration; however, employers uncertain about future payroll and residency changes may prudently annualise current pay and apply TDS procedures, and must treat the employee as a regular employee on company payroll until formally shifted.