How does the TCS/TDS Declaration adjust tax liability?

Created by Product Content Team, Modified on Fri, 20 Dec at 1:45 PM by Product Content Team


The TCS/TDS declaration ensures that any Tax Collected at Source (TCS) or Tax Deducted at Source (TDS) is properly recorded and accounted for when calculating an employee's total tax liability for the financial year.

It adjusts the tax liability by subtracting the declared TCS (Tax Collected at Source) and TDS (Tax Deducted at Source) amounts from the total tax liability for the financial year.

Example:

  • Total Tax Liability: ₹1,00,000

  • Declared TCS: ₹10,000

  • Declared TDS: ₹20,000

After adjustment:
Remaining Tax Liability = ₹1,00,000 - ₹10,000 - ₹20,000 = ₹70,000

The adjusted amount is then used to calculate the monthly tax deductions, ensuring employees pay only the remaining liability through payroll deductions.



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Video - To watch the POI submission video, click here.

FAQs - To read more FAQs about the TCS/TDS Declaration, click here.

Documentation - To read more about TCS/TDS Declarationclick here.

Product Update - To read about the product update, click here.



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