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 –

Period 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 –

  • Applicability of TDS in case the employee is simultaneously working under more than one employer –

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.

  • Applicability of TDS in case of change in employment during the year –

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.

  • TDS applicability on non-monitory perquisites –

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.

Also Read-

Particulars
TCS – Tax Collection at Source – A Complete Guide
TDS Rate Chart for Financial Year 2019-2020
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

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8 Comments

  1. Piyush says:

    Sir,
    While calculating TDS u/s 192 B for employees, can employer consider rebate of 87A. as he is taking declaration from employees about their other heads income. but sometimes employee not mentioned all income appropriately or employer does not have thorough knowledge of employee income. Hence can employer go for 87A rebate or not. or as per amendment now is this mandatory for employer

  2. umjbsnl says:

    i am working as an Officer in BSNL. Income from LTCG is 25809. which ITR form is suitable for me. ITR 1 or ITR 2.
    Please Guide me. Thanks.

  3. Avinash Vishnu Bhadkamkar says:

    I am working as an adviser in one Company. They are paying me professional charges. In 2018-19 i have received payment for April and May 2018 only whereas the Company has paid TDS for full year 2018-19 as per statement in Form 26As i took from internet. Since the TDS is paid for full year i have to declare the income for ten months without receiving the same. When i will receive this year, it will appear in the bank pass book. What is the remedy for not receiving money but TDS is paid? In which account this money is lying in books of Company?

  4. Abhishek Bhasin says:

    My employer deducted TDS from my salary regularly &deposited in wrong PAN & issued TDS certificate of wrong PAN no, & nothing is appearing my 26AS, can i file my ITR based on Form 16 issued by my employer of wrong PAN

  5. Jagmohan says:

    I am pensioner the bank deducted TDS and the pension paid is shown in 26AS and form16 are very high for that month however total pension paid for year is much more than actual paid. They have not issued part B of form16.There is also another mistake they have included pension and TDS of some other pensioner in my form 16 and is reflected in 26AS the mistakes pertain to quarter IV. Please advice courses of action. Can I file return as per actual paid pension and tax deducted will it put me in trouble when TAX authority process my return.

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