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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