TDS ON SALARY UNDER SECTION 192
TDS on Salary under Section 192 of the Income Tax Act, Tax deducted at source (TDS) on salary helps in aims to collect revenue at the very source of income. It is an indirect method of “collecting tax which combines the concepts of pay as you earn” and “collect as it is being earned.”
For TDS on salary, Your employer will be liable to deduct TDS from the salary payable to you. The salary you receive from your employer is categorized in ‘Income’ under the head ‘Salary’ and the employer will be responsible for deducting TDS at normal income tax slab rates applicable to you on your estimated income. In this post, we will understand all provisions and processes of TDS on salary under section 192.
Contents of this post
TDS on salary means a tax amount payable to the Government on a salary of an employee by the employer as per the TDS section 192 of the income tax act. And Section 192 includes section 192A (Payment to Government employee other than a union government employee and section 192B (Payment of employees other than Govt. employees. Here TDS on salary full form is “Tax Deducted at source on salary”.
The Indian Income Tax Act provides for chargeable tax on the total income of a person on an annual basis. The quantum of tax determined as per the statutory provisions is payable as :
For TDS calculation, An employer will calculate the annual provisional taxable salary and tax on that of his employee then the tax amount will be divided monthly for monthly TDS deduction on salary. Here are some examples of TDS calculation on salary are given-
A resident employee Raman (aged 40), who works for a Pvt Ltd company, is fixed as Rs 1,00,000 per month as salary during the FY 2022-23. Raman has investment Rs 50,000 in ELSS funds, Rs 60,000 in PPF, Rs 40,000 in NSC. What will be the monthly TDS deducted u/s 192?
| Particulars | Working | Amount (Rs) |
| Gross Salary | 12,00,000 | |
| Less: Standard deduction | 50,000 | |
| Gross Taxable income | 11,50,000 | |
| Chapter VI-A deductions | 1,50,000 | |
| Taxable income | 10,00,000 | |
| Tax as per applicable slab rates 0 to Rs 2.5 lakh – Nil Rs 2.5 lakh to Rs 5 lakh – 5% Rs 5 lakh to Rs 10 lakh – 20% | 0 12,500 1,00,000 | 1,12,500 |
| Cess @ 4% | 4,500 | |
| Total tax | 1,17,000 |
If there are 12 months remaining for TDS deduction in the financial year the employer will deduct TDS u/s 192 = Rs 1,17,000 / 12 = Rs 9,750.
In the above case, if the employee makes a declaration to the employer for opting new tax regime, the employer shall deduct tax at the source as below:
In the new tax regime, a standard deduction of Rs 50,000 and deduction for investment in ELSS, PPF, and NSC will not be allowed as a deduction. And tax will be calculated as per the new slab rate of individual residents for calculation of TDS on salary u/s 192, i.e. Rs 1,05,000.
Education and higher education cess of 4% on the income tax = Rs 4,200.
Therefore, the net tax payable = Rs 1,09,200.
Accordingly, TDS u/s 192 to be deducted per month = Rs 1,09,200 / 12 = Rs 9100.
Mr. Toni receives a pension of Rs 40,000 per month and income from interest on his pension account (savings account) is Rs 12,000 during the FY 2021-22. What will be the monthly TDS amount deducted from the pension?
As per Section 192, TDS is required to be deducted from all the monetary amounts paid by the employer under the head ‘Salary’. Since, ‘Salary’ also includes pension, TDS on the same needs to be deducted as per Section 192.
| Particulars | Working | Amount (Rs) |
| Income from salary | ||
| Pension | 4,80,000 | |
| Less: the standard deduction | 50,000 | |
| Net income from salary | 4,30,000 | |
| Income from other sources | ||
| Interest on savings account | 12,000 | |
| Gross total income | 4,42,000 | |
| Taxable income | 4,42,000 | |
| Income tax thereon 0 – Rs 3,00,000 – Nil Rs 3,00,000 – Rs 4,42,000 – 5% | 7,100 | 7,100 |
| Less: Rebate under Section 87A (up to Rs 12,500) | 7,100 | |
| Income tax payable | Nil |
Hence, since the income tax payable is zero, no TDS will be deducted by the employer from the monthly pension.
TDS on salary section 192 does not specify a TDS rate. TDS will be deducted as per the income tax slab and the rates thereof applicable to the taxpayer for the relevant financial year for which the salary is paid.
As per Section 192, the employer is required to deduct tax at source on the amount payable at the average rate of income tax. This is to be computed on the basis of rates in force for the financial year in which payment is made.
The tax calculation is usually done by the employer at the beginning of the financial year. The TDS is to be deducted by dividing the estimated tax liability of the employee for the financial year by the number of months of his employment under the particular employer.
However, if there is no PAN of an employee, TDS shall be deducted at the rate of 20% plus 4% cess.
Income Tax Slabs & Rates for Individuals below 60 years for FY 21-22 & AY 22-23
| Income Slabs | Old Regime | New Regime |
| Up to Rs. 2,50,000 | NIL | NIL |
| Rs. 2,50,001 – Rs. 5,00,000 | 5% | 5% |
| Rs. 5,00,001 – Rs. 7,50,000 | 20% | 10% |
| Rs. 7,50,001 – Rs. 10,00,000 | 20% | 15% |
| Rs. 10,00,001 – Rs. 12,50,000 | 30% | 20% |
| Rs. 12,50,001 – Rs. 15,00,000 | 30% | 25% |
| Above Rs. 15,00,000 | 30% | 30% |
Income Tax Slab & Rates for Senior Citizens (60 to 80 Years) for FY 21-22 & AY 22-23
| Income Slabs | Old Regime | New Regime |
| Up to Rs. 2,50,000 | NIL | NIL |
| Rs 2,50,001 – Rs 3,00,000 | NIL | NIL |
| Rs. 3,00,001 – Rs. 5,00,000 | 5% | 5% |
| Rs. 5,00,001 – Rs. 7,50,000 | 20% | 10% |
| Rs. 7,50,001 – Rs. 10,00,000 | 20% | 15% |
| Rs. 10,00,001 – Rs. 12,50,000 | 30% | 30% |
| Rs. 12,50,001 – Rs. 15,00,000 | 30% | 25% |
| Above Rs. 15,00,000 | 30% | 30% |
Income Tax Slab & Rates for Super Senior Citizens (Above 80 Years) for FY 21-22 & AY 22-23
| Income Slabs | Old Regime | New Regime |
| Up to Rs. 2,50,000 | NIL | NIL |
| Rs 2,50,001 – Rs 3,00,000 | NIL | NIL |
| Rs. 3,00,001 – Rs. 5,00,000 | NIL | 5% (Tax Rebate U/S 87A is available) |
| Rs. 5,00,001 – Rs. 7,50,000 | 20% | 10% |
| Rs. 7,50,001 – Rs. 10,00,000 | 20% | 15% |
| Rs. 10,00,001 – Rs. 12,50,000 | 30% | 20% |
| Rs. 12,50,001 – Rs. 15,00,000 | 30% | 25% |
| Above Rs. 15,00,000 | 30% | 30% |
List of surcharge rates & cess applicable to different levels of income-
| Taxable Income (Rs.) | Surcharge Rate |
| 50 Lakhs to 1 Crore | 10% |
| 1 Crore to 2 Crore | 15% |
| 2 Crore to 5 Crore | 25% |
| 5 Crore to 10 Crore | 37% |
| 10 Crore & Above | 37% |
Education cess- 4% applicable and the tax liability of the employee should be determined on the basis of the rates in force for the financial year. Every month, the monthly calculated TDS on salary will be deposited to the govt.
For the various categories of employers, the persons responsible for making payments under the head salaries and for deduction of tax are as below:
| No. | Types of entity | Liable Person to deduct TDS |
|---|---|---|
| 1 | Private & Public Companies | The company itself is also the principal officer thereof. In the case of a company, it is to be noted, that the company may designate an officer /employee to make payments on the behalf of the company. |
| 2 | Firm | The managing partners/partners of the firm. |
| 3 | HUF | Karta of HUF |
| 4 | Trust | Managing Trustees of Trust |
| 5 | Proprietorship concern | The proprietor of the said concern. |
| 6 | Central/State Government/P.S.U | The designated drawing & disbursing officers. |
As per section 192, TDS will be required to deduct at source when
TDS on salary Section 192 says that the TDS deduction responsibility will be on the employer. At the time of actual payment of salary to the employee. Unlike the provisions of TDS, pertaining to payments other than salary where the obligation to deduct tax arises at the time of credit or payment, whichever is earlier, the responsibility to deduct tax from salaries arises only at the time of payment.
Thus, when advance salary and arrears of salary have been paid, the employer has to take the same into account while computing the tax-deductible.
There are simple steps required to use for payment of TDS on salary online-
1st step: Firstly, Go to NSDL’s website for e-payment of taxes directly or through https://eportal.incometax.gov.in/ then the e-payment option.
2nd step: Select ‘CHALLAN NO./ITNS 281’ under TDS/TCS section. You will be directed to the e-payment page.
3rd step: On this show page, the following details have to be entered as per the requirement
4th step: On submission, a confirmation screen will display. If TAN is valid, the full name of the taxpayer as per the master will be displayed on the confirmation screen.
5th step: On confirmation of the data entered, you will be directed to the net banking site of your bank.
6th step: The taxpayer should log in to the net banking site with the user id and password provided by the bank and make the payment.
7th & final step: On successful payment, a challan counterfoil will display containing CIN, payment details, and bank name through which e-payment has been made. This counterfoil is proof of the payment. After payment of TDS, you have to file your TDS return.
Here is the table showing the due dates for payment of TDS on Salary and TDS returns for any financial year–
| Months of deduction | Quarter-end | TDS Payment due date | The due date for TDS return filing |
|---|---|---|---|
| April May June | 30 June | 7th May 7th June 7th July | 31st July |
| July Aug Sept | 30 Sept | 7th Aug 7th Sept 7th Oct | 31st Oct |
| Oct Nov Dec | 31 Dec | 7th Nov 7th Dec 7th Jan | 31st Jan |
| Jan Feb March | 31 March | 7th Feb 7th March 7th April Govt,30th April (other) | 31st May |
Every person deducting tax at source is required as per Section 203 to furnish a certificate to the payee to the effect that tax has been deducted along with certain other particulars. This certificate is the TDS certificate. Even the banks deducting tax at the time of payment of pension are required to issue such certificates.
In the case of employees receiving salary income including pension, the certificate has to be issued in form No.16. The certificate is to be issued in the deductor’s own stationery.
However, there is no obligation to issue a TDS certificate in case of tax at source is not deducted /deductible by virtue of claims of exemptions/ deductions.
Yes, You can claim a refund if you have paid excess TDS. Tax Deducted at Source (TDS) is the sum that is deducted from a taxpayer’s income like salary, interest from bank accounts, rent, etc. If the TDS collected is more than what you owe to the government, you can get a TDS Refund.
A TDS Refund arises when the taxes paid by way of TDS are greater than the actual tax payable calculated for the Financial Year. It is calculated after consolidating income earned from various sources.
When the tax deducted does not match your actual tax payable, you can calculate your taxable income and taxes, file an income tax return (ITR), and claim a refund.
In normal course liability to deduct TDS is imposed on the person making payment for consumption of services or goods i.e. deductor. If the deductor does not deduct TDS then he shall face interest, penalty, and prosecution proceedings. But assessee is also not relieved from the payment of taxes if TDS has not been deducted by the deductor. Every person has to do his work with honesty whether the other person does or not. You are always required to declare correct income whether TDS has been deducted by another person or not.
Section 191 provides that the assessee shall pay the tax directly where TDS has not been deducted by the deductor. If the assessee does not pay taxes directly then the assessee shall also be treated as assessee in default u/s 201 and interest shall be leviable subsequently.
You can save taxes on your salary by investing in tax-saving investments such as LIC, PPF, and Sukanya Yojna.
TDS section 192.
TDS on salary will be calculated on the basis of income tax slabs for the taxable current financial year.
If you are engaged with two or more employers simultaneously, you can provide details about your salary and TDS in Form 12B to any one of the employers. Once the employer receives all kinds of information from you, he/she will be responsible for computing your gross salary to deduct TDS. Subsequently, if you resign and join a different employer, you can provide details of your previous employment in Form 12B to your new employer. This employer will consider your previous salary and TDS will be deducted for the remaining months of the financial year. If you choose not to provide details of income of other employment, each employer will deduct TDS only from the salary paid by him respectively.
The employer is required to provide Form 16 to you containing the details of salary such as the amount paid and tax deducted. This can also be accompanied by Form 12BA, to show particulars of perquisites, and profits in lieu of salary.
TDS is to be made vide challan No.ITNS 281.
Every deductor is required to file the quarterly statement of TDS in form No. 24Q for each quarter as per the dates specified above.