Income Tax Module of Payroll Software
A manual payroll system is a hectic task if company has a large number of employees. A company with few people can maintain a manual payroll process with accuracy. However, it is a time consuming task. Payroll software makes your task much easier and error free, which reduces legal issues.
Calculation of Income tax is another routine and pain staking activity that needs to conform to government regulations and norms – If organizations have just one or two employees it may seem relatively easy to compute salaries outstanding, taxes etc, but as small business starts adding employees they find spending more and more time in computation of salaries, Income tax.
A payroll solution software or program could make small and medium enterprises improve the overall operational efficiency. It helps in Computing salaries including statutory computation of PF and ESI, Reimbursements as per CTC norms, computation of income tax, maintaining employee master details and correspondence in respect to letters, emails and documents in an organized manner, Keep track of Employee leave taken and loan availed.
With the help of Income tax module in the Payroll Software, it is easier to manage complex tax calculation at ease. Companies generally use spreadsheets to maintain details, while spreadsheets are free and easily available to everyone, they bring with them a host of problems.
Spreadsheet errors can cause wrong payouts or wrong PF/ESI deductions leading to fines.
Only the spreadsheet programmer can understand the complex relationships between the dozens of sheets and hundreds of cells. Any change in law requires rewriting the formulas which could easily break the logic somewhere else.
Complex work like income tax computation, digitally signed form 16s, reports like PF form 3A, etc. are very time consuming to prepare and cannot be easily done on a spreadsheet.
Keeping track of loans or salary advances, automatic monthly deduction, stopping loan deductions once principal is fully recovered — all such features are not possible in a spreadsheet.
Since you need to create new sets of spreadsheets every month, the total number spreadsheets keeps multiplying month after month and can get quite difficult to manage
Income Tax module of Payroll Software allows the user to:
Specify monthly components, one-time payments, income from previous employer, and other incomes. Relevant employee declaration details can be entered under each section and the employee documents uploaded, and in cases where the declaration documents are pending, an MIS report can also be generated or emailed
Complete flexibility to define the treatment of tax on various components including treatment on reimbursements like LTA, Medical, etc.
Auto calculations of Exemptions & Deductions and compute income tax payable for the entire year & the tax to be paid current month
Income tax for each individual is computed and transferred to the payroll module where the TDS amount is deducted from the individual’s salary.
Email or print detailed Income Tax calculation sheets to employees.
Generates requisite forms such as Form 16 for the employee and facilitate quarterly and annual e-filing for the Income Tax department.
You can check Pocket Payroll Software at http://www.pocket.in and its income tax module in payroll software.
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