The most confusing concept in whole TDS is “TDS on Salary” as readers always asked questions about the topic. In this article, we will cover all the topics related TDS on salary like how to deduct TDS on salary, how to calculate tds on salary, deposit TDS, submission of statements, time of deduction, annual salary TDS statement and more.
TDS on Salary Quick Summary – Section 192
|Person Responsible to Deduct Tax
|As per Income Tax Slab (as calculating income tax on taxable income)
See – Income Tax Slab
|Time of Deduction of TDS
|At the time of payment
|Time for Deposit of TDS
|Within one week of end of the month in which deduction is made. For month of March, before 30th April.
|Certificate of TDS
|Form No. 16 & 12BA (wherever applicable) by 31st May
|Quarterly Return of TDS
|Quarterly return form no.24Q on or before 31st July, 31st October 31st January and 31st May.
|AO’s Certificate for Deduction at Lower Rate or Non Deduction
|Yes, Application in Form No. 13, Appropriate Certificate to be issued by AO
|Is Self Declaration by Payee for Non Deduction Admissible
Person Responsible to deduct TDS on Salary
All employers including the principal officers of the company, individuals and HUF are required to deduct TDS on salary. The liability of the employer here is to deduct tax is absolute. It is the responsibility of the employer to deduct TDS of an employee.
Exemption Limit for A.Y.2018-19
- Rs.2,50,000 for any other individuals
- Rs.3,00,000 for an individual resident in India of the age of 60 years and above but less than 80 years
- Rs.5,00,000 for an individual resident in India of the age of 80 years or more
Time for Deduction of TDS
In the case of salaries the liability to deduct tax arises only at the time of payment. So there is no need of tax deduction in the case of amount credited.
Time Limit for Deposit of TDS
On or before 30th day of May where the income or amount is credited or paid in the month of March; and
In any other case, on or before seven days from the end of the month in which:
- The deduction is made; or
- Income tax is due under section 192 (1A)
- The Assessing Officer, in special cases, with the approval of the joint commissioner may allow quarterly payments on July 7, October 7, January 7, and April 7.
Time limit for deposit of TDS
- Where tax is deducted by the office of the Government on the same day where the tax is paid without production of an income-tax Challan; and
- on or before 7 days from the end of the month in which the deduction is made or income-tax is due u/s 192 (1A), where tax is paid accompanied by an income-tax challan.
Time limit of issue of TDS certificate
The person responsible for deducting the TDS is required to issue a certificate in the shape of Form No. 16 (Salary TDS Certificate) by 31st May of the financial year immediately following the financial year in which income was paid and tax deducted to the employee on account of tax deducted at source.
Further, Form No. 12BA (statement of the value of perquisites and profit in lieu of salary) shall also be issued to the employee along with Form No. 16.
Submission of Statements in the Regard of Salary TDS Deduction
- If deductor is an office of Government then on or before 31st July, 31st October, 31st January and 15th May.
- In any other case the statement shall be submitted in form no.24Q on or before 31st July, 31st October 31st January and 31st May.
Annual Tax Statement u/s 203AA
The annual tax statement in form no. 26AS should be issued to the deductee by 31st July following the financial year during which taxes were deducted or paid.
Now, deductee himself/herself can download 26AS by logging on official website of the income tax department.