What is Income Tax Act Section 192?
TDS on salary earnings is addressed in Section 192 of the
Income Tax Act of 1961. TDS is deducted from your pay by your employer.
The company is responsible for deducting the correct TDS
for the relevant fiscal year based on your taxable income and tax rate. Your
employer provides Form 16, which shows the TDS deducted after the fiscal year
ends.
Who must deduct TDS under Section 192?
Employers are required to deduct applicable TDS under
Section 192 of the Income Tax Act of 1961.
Individuals, local governments, Hindu Undivided Families
(HUFs), Association of Persons (AOPs) or Body of Individuals (BOIs),
partnership firms, co-operative societies, trusts, companies (public and
private), and any artificial judicial person are all examples of employers.
According to the provisions of this section, the presence of an
employer-employee relationship is required.
However, when calculating and deducting
the applicable TDS, the employer status and the number of employees are
irrelevant.
When should TDS be deducted in accordance with Section 192?
Employers are required to deduct TDS and deposit it
into a government account. Employers must deduct TDS when the salary is paid,
not when it accrues, according to the provisions of the Income Tax Act of 1961.
Furthermore, TDS is deducted if your employer pays you in
advance or if you receive past-due wages. Furthermore, even if the employee
does not provide their Permanent Account Number (PAN) details and their salary
income exceeds the basic exemption limit, the employer is required to deduct
TDS on salary.
The employer will not deduct TDS if your estimated salary
income is less than the basic exemption limit.
When TDS is not applicable, the exemption limits are as follows :
●
Indian residents under the age of 60: INR 2.50 lakhs
●
Senior citizens aged 60 to 80: INR 3 lakhs
●
Super senior citizens over the age of 80: INR 5 lakhs
How do you deduct TDS from your salary?
TDS refunds are not claimed in any way, shape, or form.
Typically, the deductee is only required to file income tax returns. If the
amount of TDS levied on salary in a given year exceeds what the employee is
required to pay, a refund will be due and must be noted in the returns filed.
When is TDS on salary deducted under Section 192?
TDS is required to be deducted by the employer at the time
of salary payment when an employee’s taxable income (i.e. Gross Total Income less
Deductions under Chapter VIA) exceeds the basic exemption limit, which is – Rs.
2,50,000/- if under 60 years old
– Rs.
3,00,000/- if the age is 60 years or older but less than 80 years
– Rs.
5,00,000/- if the age is 80 or older
TDS is required to be deducted by the employer at the time
of payment in the case of advance salary and arrears of salary.
TDS is required to be deducted on salary even if the
employee does not have a PAN if the salary exceeds the basic exemption limit.
How do you compute the tax deduction under Section 192?
The following points must be considered when calculating TDS on salary:
●
Income other than salary, such as rent, shall be
considered by the employer for the purpose of calculating TDS on salary if
details of such income are submitted by the employee.
●
If the employee provides evidence in Form 12BB,
interest on home loan (if any) up to Rs. 2,00,000/- will be deducted from
salary income to arrive at estimated income for the purpose of TDS calculation.
● It
is also common for employees to make investments in order to benefit from tax
breaks,
i.e. to reduce their tax liability. However,
because the employer is unaware of the
investment, the TDS amount exceeds
the actual tax liability. When an employer notices this, he or she will take
these investments into account and calculate your TDS accordingly.
What is the deadline for depositing TDS under Section 192?
To avoid interest, TDS deducted from wages must be
deposited to the government within the timeframe specified below.
TDS deducted for April-February: 7th of the following month
TDS deducted for March: April 30th
Conclusion
Tax Deducted at Source was designed to collect tax directly
from the source of revenue. The deductee is entitled to a credit for the amount
deducted based on the deductor’s Form 26AS or
TDS Certificate if income tax was deducted at source.
Because of the online TDS (Tax Deducted at Source) payment method, taxpayers
will be able to make payments at their convenience.
FAQ’S
Q. Is TDS deducted from my salary every month?
Section 192 requires that tax be deducted at source from
salary at the time of payment. As a result, TDS must be deducted from salary
every month if the estimated salary income exceeds the basic exemption limit.
Q. Where is the TDS section on salary?
Section 192 of the Income Tax Act of 1961 governs TDS on
salary.
Q. How much TDS is deducted from my salary?
There is no set rate of TDS deducted from salary. TDS on
salary is deducted at the average income tax rate for the fiscal year. The
average income tax rate must be calculated using the income tax slab rates in
effect for that year.
Q. What is Income Tax Act Section 192?
Section 192 of the Income Tax Act addresses the employer’s
deduction of TDS on salary income. This section only deals with TDS on salary
income.
Q. What is the standard deduction for salaried workers?
In Budget 2018, a standard deduction of Rs. 40,000/- was
introduced (Interim Budget 2019 Standard deduction increased to Rs. 50,000/-
for FY 2019-20).
Rs. 19,200/- for transportation
Rs. 15,000/- Medical Reimbursement
Q- What is Section 89 Relief?
Section 89 provides relief when you receive salary arrears
or advance salary.
Arrear salary is a wage dispute or a retroactive salary
increase. To claim this relief, you must include the relief calculation in your
return, as well as file Form 10E online.
Q. What proportion of TDS is deducted?
TDS on salary is deducted at the average income
tax rate for the fiscal year. The average income tax rate must be calculated
using the inc