According to the income tax guidelines, income tax is deductible annually for each financial year commencing from 1st of April and ending on the 31st March. The responsibility of the employer has been affixed by the Income-tax Department to deduct income tax from the salary of employees monthly on a proportionate basis and deposit before the due date ( Monthly) as prescribed and report same to Income tax Department (quarterly as well as annually). The aggregate tax calculated on the estimated projected income will be deducted proportionately in 12 months, thus the assessment needs to be done on at the start of the year.
Download All in One TDS on Salary for Private employees for F.Y.2016-17 & A.Y.2017-18 [ This Excel utility can prepare at a time Tax Compute Sheet ( Income tax Declaration )+ Automatic H.R.A. Exemption Calculation + Individual Salary Structure as per Private Concerned Salary Pattern + Automatic Form 16 Part A&B + Automatic Form 16 Part B for F.Y.2016-17 + Form 12 BA, as per Finance Budget 2016-17]
Therefore, all employees are requested to declare their proposed investments for the financial year 2016–17 ,so that proportionate income tax could be calculated & systematic deducted from the salary can be started early
It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in Rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax.