Section 192 of Income Tax Act 2015-16: Understanding TDS on Salary
The Income Tax Act of 1961 governs the taxation of income earned by individuals and entities in India. Section 192 of the Income Tax Act deals with the tax deduction at source (TDS) on salaries. In this blog, we will discuss Section 192 of the Income Tax Act in detail and understand its implications.
What is Section 192 of the Income Tax Act? Section 192 of the Income Tax Act specifies the provisions for the deduction of TDS on salaries. According to this section, any employer who pays a salary to an employee is required to deduct TDS at the time of payment. The TDS rate for salaried employees depends on their income level and the applicable tax slab rate.
When is TDS on Salary Deducted?
TDS on salary is deducted by the employer at the time of payment of salary to the employee. The employer must calculate the TDS amount based on the employee’s income level and the applicable tax slab rate.
TDS on Salary – Applicable Rates The TDS rates on salary are determined based on the employee’s income level and the applicable tax slab rate. The TDS rates for the financial year 2021-22 are as follows:
- For employees earning up to Rs. 2.5 lakh per annum, no TDS is applicable.
- For employees earning between Rs. 2.5 lakh and Rs. 5 lakh per annum, TDS is applicable at the rate of 5%.
- For employees earning between Rs. 5 lakh and Rs. 10 lakh per annum, TDS is applicable at the rate of 20%.
- For employees earning more than Rs. 10 lakh per annum, TDS is applicable at the rate of 30%.
How to Calculate TDS on Salary? The TDS on salary is calculated based on the employee’s income level and the applicable tax slab rate. The employer can use the income tax calculator available on the Income Tax Department’s website to calculate the TDS amount.
How to Deposit TDS on Salary? The employer is required to deposit the TDS amount deducted from the employee’s salary with the government on a monthly basis. The TDS amount must be deposited by the 7th of the following month.
Conclusion
In conclusion, Section 192 of the Income Tax Act is an important provision that governs the TDS on salaries. The employer must deduct TDS on salary at the time of payment and deposit the same with the government on a monthly basis. It is important for both employers and employees to be aware of the TDS rates and comply with the provisions of the Income Tax Act to avoid penalties and legal issues.
Other Related Blogs: Section 144B Income Tax Act
Frequently Asked Questions (FAQs)
Q. What is TDS on salary? TDS on salary refers to the tax deduction at source on the salary paid by an employer to an employee. It is the responsibility of the employer to deduct TDS and deposit the same with the government.
Q. What is the rate of TDS on salary? The rate of TDS on salary varies based on the employee’s income level and the applicable tax slab rate. The TDS rates for the financial year 2021-22 are 5%, 20%, and 30%, depending on the employee’s income level.
Q. Who is responsible for deducting TDS on salary? The employer is responsible for deducting TDS on salary and depositing the same with the government on a monthly basis.
Q. How is TDS on salary calculated? TDS on salary is calculated based on the employee’s income level and the applicable tax slab rate. The employer can use the income tax calculator available on the Income Tax Department’s website to calculate the TDS amount.
Q. What happens if TDS on salary is not deducted or deposited? If TDS on salary is not deducted or deposited, the employer may face penalties and legal consequences. The employee may also face difficulties while filing their income tax return and claiming tax refunds.
Q. Can an employee claim a refund of TDS on salary? Yes, an employee can claim a refund of TDS on salary if they have paid excess tax or have invested in tax-saving instruments. The refund can be claimed while filing the income tax return.
Q. Is TDS on salary applicable to all types of employees? TDS on salary is applicable to all types of employees, including full-time employees, part-time employees, and contractual employees. However, the TDS rate may vary based on their income level and the applicable tax slab rate.
