About Tax Deducted at Source (TDS)
Explore TDS charges and processes in RazorpayX Payroll.
Tax Deducted at Source (TDS) is an indirect tax that salaried employees and other eligible entities pay to the Income Tax department of India per the Section 192 of the Income Tax Act (ITA), 1961.
In a company, TDS is deducted from the employee's salary income as per their annual earnings in Lakhs.
- This deduction is based on the tax regime that the employee has chosen.
- The employer is responsible for filing TDS, while the employee manages the tax returns.
Watch Out!
- registration is required by XPayroll to download Form 16/16A data.
- If your organisation is currently not registered on TRACES, so that XPayroll can do it for you after filing TDS returns for any quarter.
- We have moved to Tax Information Network (TIN) 2.0, in effect from 1st November, 2022.
- It is a government mandated initiative by the IT Department for the modernisation of the current system for collection, processing, monitoring and accounting of direct taxes using informational technology.
- You can find the CIN (Challan Identification Number) and Debit Advice (containing the bank transaction reference no.) for the TDS payments made in the TDS Payments Report.
- Challans are not available on the RazorpayX Payroll Dashboard. To download challans, visit and log in to your account.
- Go to e-File → E-Pay Tax → Payment History.
- Under the Actions tab, click on the 3 dot menu for the challan you want, and click Download.
- Go to e-File → E-Pay Tax → Payment History.
- If you do not have an existing account, follow to register.
Explore the various nuances of tax filing as an employer, the forms available, deduction processes, verification flow, and more available in RazorpayX Payroll below.
TDS is charged by the government based on the dual tax regimes, that is, the old regime and the new regime. Once an employee confirms their tax Regime, they cannot change it. An employee can only request the admin to access it if required.
Only an
can change the regime upon request. To change the regime:- Log into your as the admin.
- Navigate to People and open the employee's profile.
- Click View Tax Deductions from the right pane.
- Click Reverse Regime Selection.
Inform the employee to revisit the
on the Employee Dashboard and select the tax regime they want to continue with.XPayroll does not file tax for contractors working in your company, and it is generally
for companies to do so. However, XPayroll calculates the TDS that contractors incur so that they can simply pay the tax.XPayroll does not provide Form 16A by default. Form 16A is also called a TDS certificate, and is present in Form 26AS, which can be downloaded by the contractor themselves.
If the contractor insists on getting their Form 16A then
and obtain the same. When requesting, ensure you mention following:- The contractor's name/PAN.
- Quarter for which the form is required (Form 16A are generated for each quarter).
You can avail Form 16A from XPayroll's support team only when:
- You have used XPayroll when making payments to your contractor.
- You have filed the 26Q TDS returns for that quarter using XPayroll.
As per your request, we send the Form 16A. Post that, you can forward the form to your contractor.
XPayroll computes each employee's tax liability every month with absolute accuracy. TDS depends on a lot of variables, some of them being:
- Income/TDS from previous employer(s), if any.
- Each month's earnings in the current financial year.
- Prequisites (if any).
- Exemptions like professional tax, HRA, flexible benefits etc.
- Income tax deductions under different sections like Section 80C, Section 24, and more.
- Income tax regime.
XPayroll automates these calculations, thereby eliminating the need for manual work. If there is a mismatch between your manual calculations and XPayroll's calculation, please recheck the data entered into the system.
If for any reason you absolutely must change the TDS for an employee, you can do so on XPayroll. To do so:
-
Log into your
. -
Finalise payroll for the specific month for which you want to make the modification.
Watch Out!
Do not click REQUEST EXECUTION after finalising payroll. You are finalising payroll only to check your current TDS amount. You cannot make changes to your payroll and your employee's Form 16s
, and therefore we reccommend you to not request execution. -
Write to us at
. Do mention:- The Employee ID.
- The payroll month.
- The current and the revised TDS values.
Watch Out!
If you change the TDS for an employee, then XPayroll cannot file your TDS returns for Q4 in particular as it requires complete details of the TDS calculation.
Without the Q4 filing, XPayroll is unable to generate Form 16s for all your employees and not just the employee(s) for who the TDS was changed.
TDS can apply on One-time Payments, Razorpay charges, bonus provided, taxable column in Custom Salary Structure and more.
On one-time payments, you can choose whether you want to pay TDS at the time of making the payment, or club it as a part of your monthly payroll activity. Know more about
.For Custom Salary Structure, you can set your organisation's salary structure components to be taxable or not, and allow employees to avail felxible benefits. Know more about
.TDS is not required on Razorpay charges unless the annual amount paid is more than ₹30,000.
If the amount is more than ₹30,000, and you do want to deduct TDS, the process depends on if you are using XPayroll for filing your 26Q returns. To check that:
- Log into your .
- Go to Settings → TDS Filing Setup.
When you make a modification to an employee's payroll and give them an addition, like a bonus, that leads to an increase in the employee's TDS.
The entire additional TDS liability because of that bonus is included in the same month itself, so that the employee receives a steady in-hand pay in the months following the bonus. Know more about how to
to your employee's salary.For example, let's say an employee's earnings in a year are expected as ₹12,00,000.
- Total TDS for the entire year = ₹1,79,400.
- It gets distributed in equal amounts, leading to:
- An in-hand pay = ₹85,050
- TDS = ₹14,950.
Assume a bonus of ₹1,00,000 is given to the employee.
- Total earnings = ₹13,00,000.
- Total TDS on this = ₹2,10,600 (an increase of ₹31,200).
This additional liability of ₹31,200 is included in the same month as the bonus, and the employee's in-hand salary becomes:
- 2,00,000-(14,950 + 31,200) = ₹1,53,850.
This is done because if additional TDS liability is not deducted, the employee's in-hand salary for the remaining months of the year drops greatly. That happens since they are paying more TDS every following month even though the bonus was only given for one month.
On RazorpayX Payroll, you can file your TDS returns. To configure XPayroll to filed TDS, see how to
during account set up.To check if XPayroll is configured to file your 24Q/26Q returns:
- Log into your .
- Go to Settings → TDS Filing Setup.
In this section of the settings, you can configure whether XPayroll should file your 24Q returns (for employees), 26Q returns (for contractors), or both.
Handy Tips
If you want to take care of the current filing yourself, you can choose the FY quarter from when the filing should start.
TDS returns are filed by the following dates -
| Quarter | Due date for filing TDS return |
|---|---|
| Q1 (1 April - 30 June) | 31 July |
| Q2 (1 July - 30 September) | 31 October |
| Q3 (1 October - 31 December) | 31 January (of next year) |
| Q4 (1 January - 31 March) | 31 May |
XPayroll starts the filing process a week before the due date. During this period, you can view the TDS filing data under Reports → TDS → View TDS Filings, but you cannot find the acknowledgement in the attachments column.
After we receive the acknowledgment, you can view it on your
. You also receive an email confirming that your filing is completed.Watch Out!
XPayroll does not file nil TDS returns. If there was no TDS deducted for your company for an entire quarter, it implies that the TDS filing is not done.
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