by Tax Deducted at Source (TDS) under Section 192 of the Income Tax Act, 1961, is a provision that mandates employers to deduct tax at the source from the salary income of employees. This section specifically deals with the TDS on income from salaries. The primary objective is to ensure the timely deduction and payment of income tax by individuals who earn salaries.
Section 192 plays a vital role in ensuring the systematic deduction and payment of income tax on salary income. Employers are entrusted with the responsibility of deducting TDS accurately and depositing it with the government. On the other hand, employees benefit from the convenience of having tax deducted at the source, making compliance with tax regulations more efficient. Understanding the provisions of Section 192 is crucial for both employers and employees to ensure proper adherence to tax laws and regulations.
Points under Section 192:
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Applicability:
Section 192 applies to employers who are responsible for paying salaries or pensions to employees or pensioners.
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Tax Deduction Responsibility:
Employers are obligated to deduct TDS from the salary payments made to employees based on the applicable income tax slabs.
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Calculation of TDS:
TDS under Section 192 is calculated based on the individual’s estimated total income for the financial year and the applicable income tax slabs.
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Filing of TDS Returns:
Employers are required to file TDS returns, providing details of the TDS deducted and deposited on behalf of employees. This is done through Form 24Q.
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Frequency of TDS Deduction:
TDS is deducted at the time of making each salary payment. This may be on a monthly or quarterly basis, depending on the employer’s policies.
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Exemptions and Deductions:
The employer considers exemptions, deductions, and declarations submitted by employees (like HRA exemption, standard deduction, investments, etc.) while calculating TDS.
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Form 16:
Employers issue Form 16 to employees, summarizing details of salary income, TDS deducted, and other exemptions. It serves as a proof of TDS for the employee.
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Quarterly TDS Statements:
Employers are required to file quarterly TDS statements in Form 24Q, providing a comprehensive summary of TDS deductions during the quarter.
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Adjustments at the Time of Filing Income Tax Returns:
Employees can claim adjustments and refunds at the time of filing their income tax returns based on the TDS details reflected in Form 26AS.
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Penalties for Non-Compliance:
Employers failing to deduct TDS or depositing it late can face penalties. Late filing of TDS returns also attracts penalties.
