Section 192: TDS on payment of Salary.

This article briefly covers about important provisions of Section 192 of Income-tax Act 1961: TDS on Payment of Salary.

According to Section 192 every person who is responsible for paying any income to employee Which is chargeable under the head 'Salary' is required to deduct TDS.

TDS Rate:

Average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.

Important Note:

1. There must be an employer and employee relation & The income chargeable under the head ‘Salary’ is over and above the maximum amount not chargeable to tax.

2. Payer( employer) shall consider details of
(a) such other income and of any tax deducted thereon under any other provision of this Chapter;
(b) the loss, if any, under the head "Income from house property" only.
furnished by the employee in such form and verified in such manner as may be prescribed for the purposes of making TDS u/s 192(1).

3. A person responsible for paying any income chargeable under the head "Salaries" shall furnish to the person to whom such payment is made a statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in Form 12BA along with Form 16

4. The Deductor / Employer who has deducted TDS on Salary is required to issue a TDS certificate in Form 16 on or before 15th june of the next Financial Year in which the TDS is deducted

5. The Employer may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct during the financial year.

6. Where salary is payable in foreign currency, the value in rupees shall be calculated at the prescribed rate of exchange For the purposes of TDS.

7. Where the employee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under section 89(1), he may furnish to the Employer, such particulars, in such form and verified in such manner as may be prescribed, and thereupon Employer shall compute the relief on the basis of such particulars and take it into account in making

the deduction under section 192(1).

Special Cases:

1. Where, during the financial year, an employee is employed simultaneously under more than one employer, or where he has held successively employment under more than one employer, he may furnish to the Employer (being one of the said employers as the assessee may, having regard to the circumstances of his case, choose), such details of the income under the head "Salaries" due or received by him from the other employer or employers, the tax deducted at source therefrom and such other particulars, in Form12B and verified in such manner as may be prescribed, and thereupon Employer shall take into account the details so furnished for the purposes of making the deduction.

2. Employer while paying any income in the nature of a non-monetary perquisite may pay, at his option, tax on the whole or part of such income without making any deduction therefrom at the time when such tax was otherwise deductable.
For the purpose of paying tax on Non-monetary perquisite tax shall be determined at the average of income-tax computed on the basis of the rates in force for the financial year, on the income chargeable under the head "Salaries" including perquisite income, and the tax so payable shall be construed as if it were, a tax-deductible at source, from the income under the head "Salaries" as per the provisions of section 192(1), and shall be subject to the provisions of this Chapter.

3. For the purposes of deducting or paying tax under section 192(1) or 192(1A), as the case may be, a person, being an eligible start-up referred to in section 80-IAC, responsible for paying any income to the assessee being perquisite of the nature specified in section 17(2)(vi) in any previous year relevant to the assessment year, beginning on or after the 1st day of April, 2021, shall deduct or pay, as the case may be, tax on such income within fourteen days—

(i) after the expiry of forty-eight months from the end of the relevant assessment year; or

(ii) from the date of the sale of such specified security or sweat equity share by the assessee; or

(iii) from the date of the assessee ceasing to be the employee of the person,

whichever is the earliest, on the basis of rates in force for the financial year in which the said specified security or sweat equity share is allotted or transferred.

Last modified date 03/08/2020.
Source "INCOMETAXINDIA"

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