TaxationTDS

How to Calculate Tds on Salary Under Section 192

Start the article by helping understand what TDS is on Salary Under Section 192. Continue the article by explaining who is responsible for deducting TDS on Salary. Provide an idea of the Rate of TDS on Salary under section 192. Then we talk about when TDS is Deducted from Salary. We explain the due date to deposit TDS on salary, followed by How to check TDS deducted on salary. Finally, we explain how to calculate TDS on Salary under section 192.

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Introduction

Tax Deducted at Source (TDS) is a form of indirect tax and was implemented to collect tax from the source of income. Section 192 of the Income-Tax  deals with tax deducted at TDS on an individual’s monthly income/salary. TDS on salary helps the government collect income tax from salaried individuals. The salary you receive from the employer will be categorised in ‘income’ under the head ‘salary.’ The employer will be responsible for deducting TDS at the regular income tax rate applicable to you on the estimated income for the relevant financial year. the The tax deducted under section 192 is reflected in Form 16, which the employer issues to the employee

The TDS rate on salary depends on the income you receive from the employer. You are categorised into different tabs Tax slab rates depending on your income. According to the Tax slab assigned, the rate of TDS will be deducted, which ranges from 10 % to 30%.

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Who Is Responsible For Deducting TDS On Salary?

Any employer who pays money to their employees is required to deduct TDS every month under section 192. The employee can be an

  • Individual
  • HUF
  • Trusts
  •  BOI
  • Local authority
  • Partnership firms
  •  Artificial judicial person.

All these employees must deduct TDS monthly and deposit it to the government within a specific period. According to Section 192 of the Income Tax Act, there should be an employer-employee relationship for tax deduction at the source. The employer’s status is not relevant for the deduction of taxes under this section. Moreover, the number of employees hired by the employer does not matter while calculating and paying TDS.

Rate Of TDS On Salary Under Section 192 

Under this section, there is no specific TDS rate. The amount to be deducted depends on tax slabs and rates applicable to the financial year for which the salary is paid. The employer should work out the requirement for deducting TDS under section 192 after considering all the exemptions, allowance rebates, and deductions available to the employee.

The total tax deducted from the estimated income of the employer for the relevant financial year is divided by the number of months of their employment. If the employee does not have a PAN number, tax should be deducted 20% without including health and education cess. If the employee has made any payment as advance tax, then the employer can adjust the same for TDS calculation, but the employee has to intimate the same to the employer.

When Is TDS Deducted From Salary? 

Under section 192, TDS is deducted at the time of salary payment and not during the accrual of wages. It means the tax will be deducted only when the employer pays the salary in advance or at the time of the payment in arrears. If the estimated wage is not more than the essential exemption list, the tax amount will be zero, so the TDS will not be deducted. This rule applies to those who do not have PAN. The table below shows the basic exemption limit as the age does not require TDS to be deducted.

Age Minimum income
Residents in India below 60 years ₹2.5 lacs
Senior citizens between 60 to 80 years ₹3 lacs
Senior citizens above 80 years ₹5 lacs

The Due Date To Deposit TDS On Salary 

The organisations’ responsibility is to deduct the TDS, and they are known as deductors. They are responsible for duly paying the applicable TDS to the government before the due date. Generally, the due date to pay TDS is always the 7th of the following month, but there are a few exceptions.

For instance, if the organisation wants to pay TDS for June, then the due date for the same will be the 7th of July. one notable exception is the month of March, the TDS payments for which can be made up to the 30th of April. For government assessees paying tax without challan, the TDS payment has been made on the same day, and the original transaction has been completed.

How To Check TDS Deducted On Salary 

Keeping track of the TDS deducted from my salary can be done using the PAN card. It can be done with the help of following steps.

  •  Visit this site 
  •  Key in the verification code
  •  Click on proceed
  •  Enter the pan and tan number
  •  Select  the financial year and the water and type of payment
  •  Click  on proceed/ go
  •  The  screen will display the details

Ways To Calculate TDS On Salary Under Section 192 

For calculating TDS on salary, you should consider the following points:

  • Income other than salary, such as rent, should be considered by the employer for calculating TDS on salary if the employee submits such details.
  • Interest on a home loan up to ₹2 lacs will be set off from salary income to arrive at estimated income for TDS calculation if the evidence is given in form 12BB by the employee.
  • Many employees make investments to enjoy tax benefits to reduce their tax liability, but you do not know about such investments as an employer. TDS amount increases when the actual tax liability. In these cases, you can declare information about all your tax-saving investments to the employer using Form 12BB. When an employee does this, they will consider these investments and calculate TDS accordingly.

How Can Vakilsearch Help You?

Nevagirarihg the laws, going over the crucial rules and regulations, and  calculating the applicable tax deductions can be as time-consuming and exhausting as it appears. But with professional assistance, it is certainly a piece of cake. So, if the above calculation has driven you insane, explore our platform, Vakilsearch. We offer simplified options. Our representatives will help you from the beginning of the return preparation process to the end of the reimbursement process. Vakilsearch offers services like calculating TDS  and submitting the TDS online. We also ensure that the entire process is done in compliance with government regulatory requirements. Visit our website or contact us for further assistance.

 

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