Temps and Tax

Posted by:  | Mar 10, 2014 | Post comments
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Tax burden 300x300 Temps and Tax

And who said that Temp’s don’t earn taxable salary….. 

For payroll,  March is an exacting month.   Primarily, it is their last chance to deduct undeducted tax and remit to the IT department.  March is  a month of relief to some and agony to others.  Relief to the studious, who did their tax homework.  And invested accordingly.    And agony, to many, who will receive reduced take home pay this month.

Most of the Companies employing regulars, make sure that the tax declaration statement is followed up religiously.  However,  many of the temping companies, are not in tune  when it comes to this.   They merely inform the temps and expect them to follow up.  While over 80 % of the temps do not have intranet facilities, which are given only to a few where the Principals have demanded.  It is time that many of these facilities are given to the temps feel many of the leading staffing players in the Industry.    And many of the performing sales people fall into the tax bracket, because of their earnings.

In IT Staffing,  the procedures are well laid out, considering the quantum of payout to each employee.  Help desks are provided from January onwards for employees to invest in tax related savings.  The problem comes in the mass non IT temporary staffing.  A trying time for relationship teams of temporary companies to convince clients, associates and more importantly their own internal finance teams… 

We guide people on some of the deductions that can be included in the form 16, if employer is informed….

Section (IT Act)

Deductions

Maximum deduction

Eligible in Rs.

80 C

School fees of Children Rs. 1 lakh

80 C

Principal payment on home loan Rs. 1 lakh

80 D

Medical Rs.5000/-

80DD

Expenses on Handicapped dependents Rs.50,000/-

(Rs.1 lakh in case of severe disabilities)

80DDB

Expenses incurred for specific diseases Rs.40,000/-  (Rs.60,000/- for Senior citizens)

80 E

Interest paid on educational Loan Full amount

80G

Donations to specified institutions 50 % – 100 % of the amount subject to a cap

80TTA

Interest on savings bank account Upto Rs.10,000/-

 

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