How monthly TDS is worked out
Each month Verdeshell projects the employee's taxable income for the whole financial year — what has been paid so far plus the current month's pay for the months left — works out the year's tax under their regime, takes off the TDS already deducted, and spreads the rest over the remaining months.
- Months already paid are locked. Tax deducted in a finalised month is not reworked; a change in declarations or pay is absorbed by the months still to come.
- The regime is the employee's choice. Anyone who has not chosen the old regime is taxed under the new regime, which is the default in law.
- Rates are maintained by Verdeshell for each financial year — slabs, standard deduction, rebate, surcharge and cess — so you do not edit formulas after a budget.
- TDS never exceeds net pay. A shortfall in a low-pay month is recorded and caught up in later months.
Investment declarations and proofs
- The employee fills in their declaration on the web — the regime, investments and deductions, rent for HRA, and income from a previous employer — and can compare the tax under both regimes before submitting.
- Declarations can be changed each month until the last day your company sets, so the next payroll uses the latest figures.
- The employee uploads proof against each item before the proof deadline your company sets.
- HR works through the tax review queue: each declaration with its proofs, a projection of the year's tax, and actions to verify proofs, approve, or reopen an approved declaration with a reason.
- Payroll uses the reviewed figures. Form 12BB, the employee's declaration form, is available to the employee for the year.
Mid-year joiners and mid-year switches
An employee who joins mid-year declares the taxable salary and TDS from their previous employer for the same financial year. The previous income counts towards the year's tax once the declaration is submitted, and the previous TDS counts once HR approves it — so tax is neither under-deducted nor deducted twice.
If your company moves to Verdeshell part-way through a financial year, HR enters each employee's opening year-to-date figures from the old system, and the rest of the year's TDS is worked out from there.
Form 16, Form 12BA and Form 24Q
| Document | What Verdeshell does | Who uses it |
|---|---|---|
| Form 16 (FY 2025-26 and earlier) | Generated for one employee or everyone, then released to employees on the web, where they download it and acknowledge it | Employees, for their income-tax return |
| Form 12BA | Built from a perquisites worksheet HR fills in per employee, by perquisite category | Employees with perquisites, alongside Form 16 |
| Quarterly TDS return worksheet (Form 24Q; Form 138 from tax year 2026-27) | Deductor details, the challans you record for each month (for Form 138, under section 1002 with the minor head), the deductee breakup for each challan, and reconciliation notes — exported as a CSV worksheet | Your team or CA, who enter it in Protean's Return Preparation Utility each quarter; it is a worksheet, not a file to import |
| Annual salary statement | The year's pay and deductions for each employee | Employees, on the web |
Form 16 is produced only once the financial year is complete and every India payroll run in it has been finalised, so the certificate matches what was actually paid.
From tax year 2026-27, under the Income-tax Act, 2025, the quarterly return is Form No. 138 and the employee's certificate is Form No. 130. Verdeshell provides Form 16 for FY 2025-26; from tax year 2026-27, Form 130 is issued through TRACES. For Form 138, Verdeshell records challans under section 1002 with their minor head and exports the worksheet; the fourth-quarter annual salary annexure is not yet included.
What to know before you choose
- Form 16, Form 12BA and the quarterly TDS return (Form 24Q, or Form 138 from tax year 2026-27) apply to employees working in India.
- Employees see Form 16 and tax declarations in self-service on the web.
- Income tax and TDS are part of the Starter plan, with the rest of payroll; there is no tax add-on.