Case Study 1

Case Study 1

Task to Complete:Compute TDS to be deducted from all the employees for the month of April without considering rebate u/s 156 of Income Tax Act, 2025.Compute revised TDS amount to be deducted from all the employees for the month of March without considering rebate u/s 156 of Income Tax Act, 2025.Pay TDS for the month of April on 5th May and for the month of March on 7th April using simulation software

The details are as follows

A. Company Information:

Company Name: Finc Power Source Private Limited
TAN Number: BLRG22875G
Address: 2870, Phoenix Building, Bagmane Business Park, Outer Ring Road, Marathahalli Post, Bangalore – 560037
PAN Number: NHNCG2827L
Email: fincpower@gmail.com
Mobile: 9876543210

B. Login credentials for Simulation software (Income Tax Website):

User ID: BLRG22875G
Password: Fin@123

To Access Simulation Software to make TDS Payment please click here🔗

Refer following for more details:

Salary Statement for the month of April
Form 124 submitted by employees joined in April
Salary Statement for the month of March
Form 122 submitted by Kiran K joined in March as he had previous employment.
Shankar Kalyan, a fresher with no prior work experience, and hence no previous salary or TDS record.
Rebate under Section 156 has not been considered by the company while computing TDS for any of the employees.

1. Salary statement for the month of April

Gross Salary & Leave Data for the month of April:

Salary Structure for the month of April:

Employer Contribution for the month of April:

Note:

In the state of Karnataka, Professional Tax (PT) of Rs. 200 is deducted monthly, except in February when it is Rs. 300, as per the latest amendments. PT is applicable only if the gross salary exceeds Rs. 25,000. The total PT deduction for the year is Rs. 2,500.
Nithin Hegde has submitted Form 124, opting to continue under the old tax regime, despite the potential benefits of the new scheme.
Naveen Narayan has opted for the new taxation scheme under Section 202(1) of the Income Tax Act, 2025.

2. Form 124 submitted by employee joined in April

Form 124 of Nithin Hegde:

Solution:

Computation of TDS deductible per month for each employee at the beginning of the year:

EMP 101 Nithin Hegde:

Monthly Salary Calculation of Employee Nithin Hegde:

Computation of Net Taxable Income and Tax Liability of Nithin Hegde:

HRA Calculation of Employee Nithin Hegde

EMP 102 Naveen Narayan:

Monthly Salary Calculation of Employee Naveen Narayan:

Since Mr. Naveen took leave in the month of April, proportionate salary for April has been calculated. Further, in absence of information, it has been assumed that he has not taken any leave in rest of the months.

Computation of Net Taxable Income and Tax Liability of Naveen Narayan:

Since Naveen has opted for New Tax regime, no deductions have been considered and the tax has been computed on the Gross Salary itself.

For the month of April, we need to remit TDS within 7th May to the government using simulation software. The company has decided to remit TDS on 5th May

Nithin Hegde – Rs. 24,356
Naveen Narayan – Rs. 7,800
Total – Rs. 32,156

TDS Payable for the month of April

TDS paid Challan for Rs. 32,156 on 5th May. Learners are advised to pay challan on the said date. This option is applicable only on Simulation to give Learners an hands on experience and on the Original website, we cannot pay challan back dated.

Case Study 1A:

In the above case study, there is a change in a few employee details as mentioned below during the last Quarter. Please compute the TDS payable in March.

Mr. Naveen N left the job w.e.f. 31st January
Mr. Kiran K has joined the organisation from 5th March and submitted Form 12B. He has already opted for new scheme u/s 115BAC
Shankar Kalyan, a fresher joined the organisation with no prior work experience, and hence no previous salary or TDS record.

3. Salary & leave data for the month of March:

Gross Salary & Leave Data for the month of March:

Salary Structure for the month of March:

Employer Contribution for the month of March:

4. Form 122 submitted by Kiran K is as follows, with the assumption that the previous company had made contributions to both Professional Tax (PT) and Employees’ Provident Fund (EPF).

Solution for Case Study 1A:

At the year end, during the March month:

There is no change in the calculations of Nithin Hegde as he wishes to continue in old scheme. So calculations remain same.
We need to recalculate for Naveen Narayan as he left the organisation during the year.
We need to consider Form 122 submitted by Kiran K and calculate TDS to be deducted for the month of March.

EMP 102 Naveen Narayan:

Revised Monthly Salary Calculation of Employee Naveen Narayan:

Computation of Revised Net Taxable Income and Tax Liability of Naveen Narayan:

EMP 103 Kiran K:

Monthly Salary Calculation of Employee of Kiran K:

Gross Salary for Kiran K from the Previous Employer was Rs.6,60,000 / –

Computation of Net Taxable Income and Tax Liability of Kiran K

Considering the Form 122 submitted by Kiran, his salary income from the previous employer was Rs.6,60,000. Further adding march income, total income comes to 7,36,710/-.Also, TDS deducted by the ex-employer (As per 122), is Rs.24,000. He will claim refund of Rs.10,391 when he files his Income Tax Return as per New scheme

EMP 104 – Shankar Narayan:

Monthly Salary Calculation of Employee of Shankar Narayan

For the month of March, we need to remit TDS within 30th April to the government using simulation software. The company decided to remit TDS on 7th April.

Nithin Hegde – Rs. 24,356
Total – Rs. 24,356

TDS Payable for the month of March

TDS paid Challan for Rs. 24,356 on 7th April. Learners are advised to pay challan on the said date. This option is applicable only on Simulation to give Learners an hands on experience. On the Original website, we cannot pay challan back dated.

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