In Indian payroll, there are certain compliances set by the central and state legislation. The common statutory requirements that apply to Indian businesses include computation of salary as per income tax act, computation of director’s salary as per company act, provision of TDS deduction, contribution to social security schemes such as PF, ESI, etc.  While computing salary an organization needs to consider all these deductions and contributions. Income tax is one such deduction. At the beginning of the year, the employee is asked to make a declaration about his additional income, tax-saving investments, etc. called as ‘income tax declaration.’ Accordingly, the employee’s tax liability is calculated, and TDS is deducted.