Zoho Payroll annualises the employee’s monthly salary at the start of the year, adds declared other income, deducts exemptions (HRA, LTA) and investment declarations (80C, 80D, etc.), computes annual tax as per the selected regime, subtracts standard deduction (Rs 75,000 for new regime, Rs 50,000 for old) and Professional Tax deduction, then divides the remaining tax by remaining months. This is the monthly TDS deducted.
When employees submit their investment declarations (PPF, ELSS, home loan interest, health insurance premiums, etc.) through the ESS portal, Zoho Payroll updates the TDS computation for remaining months. Submitting declarations early in the financial year spreads the tax savings benefit more evenly. Year-end declarations may result in a large adjustment in the final month’s TDS.
Monthly TDS deducted from all employees must be deposited to the government by the 7th of the following month via Challan 281. Zoho Payroll generates the TDS challan summary. Quarterly, the employer files Form 24Q (TDS return for salaries) on TRACES. Zoho Payroll generates the Form 24Q data to support this filing.
TDS on Salary is the monthly income tax deduction from employee salaries under Section 192. Zoho Payroll computes each employee’s annual taxable income, applies slab rates for the selected tax regime, and divides the annual tax across remaining months. The result is deducted each month and remitted as TDS.
When an employee submits investment declarations through the self-service portal, Zoho Payroll recalculates the annual taxable income with the declared deductions applied. The revised annual tax is divided across remaining pay months, reducing monthly TDS from the next pay run.
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