How to disable TDS for a salary structure

What is TDS (Tax Deducted at Source)?

TDS (Tax Deducted at Source) is a method of tax collection by the government of India. Under this system, a certain amount of tax is deducted at the time of making payments like salary, interest, commission, rent, professional fees etc. TDS is deducted as per the income tax slab rates and is aimed at collecting tax revenue in advance instead of collecting it at a later date. The person making the payment deducts the tax amount and deposits it with the government. The deducted TDS can be claimed as a credit against the total tax liability of the deduction in the year of filing Income Tax Returns.

How to disable TDS for a custom salary structure

Tax Deducted at Source (TDS) is not applicable to all income groups and all transactions. Though TDS calculation cannot be disabled for range-based salary structures, it can be done for custom salary structures. 

Click on the Payroll (1) menu and then on Settings (2). Under Pay groups (3), choose your pay group (if you have multiple ones). Then, click on the configure icon (4) against it. 

On the window that pops up next, click on Salary structures (5) and choose Custom salary (6). Now, use the search bar (7) to search out the name of the salary structure. Once it appears, click on the edit icon (8) against it. 

On the Update custom salary structure window, find the Configure PF, ESI and TDS for this structure section. Use the toggle (9) against Tax deducted at source (TDS) to disable TDS. Then, click Update (10). 

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