The main purpose of ‘Tax deduction at Source’ is the collection of tax at the very source of income. The Deductor is required to deduct an appropriate tax and deposit the same with the Government. Different rates of TDS are prescribed for different payment. The present article would help the reader to understand the provisions of section 192 relating to TDS on Salary.
Understanding Basic Provisions of Section 192 relating to TDS on Salary –
Section 192 says that every person who is responsible for paying any income chargeable under the head ‘Salary’ is required to deduct TDS. Thus, provisions of section 192 apply only if the following conditions are satisfied –
1. There is an employer and employee relation;
2. The payment made by the employer to the employee is in nature of ‘Salary’; and
3. The income chargeable under the head ‘Salary’ is over and above the maximum amount not chargeable to tax.
The Rate of TDS to be deducted –
In case of TDS on salary, there is no fixed rate of TDS, however, the Deductor / employer is required to deduct tax at source at the average rate of income tax.
‘The Average rate of Income Tax’ is computed based on the rates in force during the relevant Financial Year.
It is pertinent to note that the employer i.e., the Deductor has been bestowed the right to make appropriate adjustment for any type of shortfall / excess in the TDS already deducted in the subsequent TDS deduction.
Time of deduction of TDS on Salary –
The liability to deduct TDS arises at the time of actual payment of Salary. It is important to note that the liability arises at the time of payment of Salary and not at the time of accrual.
The Time limit for deposit of TDS on Salary –
|Type of Deductor||Time limit||Remarks|
|Other than Government Office (i.e. normal Deductor)||Within 7 days of the subsequent month in which TDS is deducted.||Applicable for the months of April to February|
|On or before 30th April in case of income credited /paid in the month of March||Applicable for the month of March|
|Government Office||Same day||Where the sum deducted has been paid without the production of a challan|
|Within 7 days of the subsequent month in which TDS is deducted.||Where the tax is paid accompanied by an income tax challan.|
Please note that TDS is to be deposited vide challan no. ITNS 281.
Issuance of TDS certificate –
The Deductor / Employer who has deducted TDS on Salary is required to issue a TDS certificate in Form 16 within 31st May of the next Financial Year in which the TDS is deducted.
Filing of TDS return –
The Deductor / Employer is required to furnish a quarterly return in Form 24Q within the following prescribed due dates –
|April to June||On or before 31st July|
|July to September||On or before 31st October|
|October to December||On or before 31st January|
|January to March||On or before 31st May|
Specific Cases –
In case the employee is working with more than one employer, simultaneously, then, the employee is required to provide details of salary earned by him from other employers in Form 12B to any one of the employer. The employer to whom the details is provided in Form 12B would be responsible for deducting the TDS after considering the details so provided.
In case of change in employment, the employee is required to intimate his current employer details about previous salary and TDS deduction in Form 12B.
Based on the details provided by the employee, the current employer will have to deduct tax at source after taking into account TDS deducted by the earlier employer, salary received from the earlier employer etc.
As per provisions of section 192 (1A), the employer has the option to make payment of the whole of the tax or part of the tax due on the non-monitory perquisites. The tax, if any, paid by the employer shall be deemed to be the TDS made from the salary of the employee, however, in terms of section 198, the said tax will not be deemed to be the income of the employee.
FAQs on Section 192- TDS on Salary
1. What is section 192 in income tax?
Section 192 in the income tax covers the provisions relating to deduction of tax at source on salary income. As per the provisions of section 192, the employer, at the time of paying salary to his employee, is required to deduct tax at source TDS.
2. Is it mandatory to deduct TDS on salary?
Yes, the employer is mandatorily required to deduct TDS on salary as per provisions of section 192.
3. Is TDS applicable on advance salary?
TDS on salary is required to be deducted at the time of payment of salary. Thus, in case of advance salary, the TDS is to be deducted at the time of payment of advance salary.
4. What if TDS is not deducted on salary?
If TDS is not deducted on salary, the employer is liable to pay interest for non-deduction of TDS @ 1% per month from the date on which tax was deductible till the date tax actually deducted.
5. What happens if TDS is deducted by the employer but not deposited?
If TDS deducted by the employer is not deposited, the employer is liable to pay interest for late deposit @ 1.5% per month from the date on which tax was deducted till the date on which TDS was credited to the Government. Further, the Deductor would also be penalize with fine and rigorous imprisonment for a term not less than 3 months but may extend to 7 years.
|TCS – Tax Collection at Source – A Complete Guide|
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|Section 192A – TDS on Premature withdrawal from EPF|
|Section 193: TDS on Interest on Securities|
|Section 194 – TDS on dividend|
|Section 194A: TDS on interest other than interest on securities|
|Section 194B and Section 194BB – TDS|
|Section 194C – TDS on Contractors|
|Section 194D – TDS on insurance commission|
|Section 194DA – TDS in respect of Life Insurance Policy|
|Section 194E – TDS on payment to Non-resident Sportsmen or Sports Association|
|TDS under Section 194EE and Section 194F|
|Section 194G TDS on Commission on Sale of Lottery Tickets|
|Section 194H – TDS on Commission or Brokerage|
|Section 194I of Income Tax Act, 1961 – TDS on Rent|
|Section 194IA TDS on transfer of immovable property|
|Section 194IB – TDS on Rent paid by Individual / HUF|
|Section 194LA: Payment of Compensation on acquisition of certain immovable property|
|TDS under Section 194LB, 194LBA, 194LBB and 194LBC|
|Section 194LC: TDS on income by way of interest from an Indian Company or a business trust|
|Section 194LD TDS on income by way of interest on certain bonds and Government Securities|
|Section 194J TDS on Fees for Professional or Technical Services|
|Section 194N – TDS on Cash Withdrawals|
|Section 194M: TDS on Payment of certain sum by certain Individual / HUF|
|Section 195 TDS on payment of any other sum to a non-resident|