CBDT has vide circular 04/2020 made a detailed explanation on TDS deduction on salary u/s 192 of the Income tax act for F.Y. 2019-20.
Earlier vide circular 01/2019 CBDT had done the same thing for F.Y. 2018-19.
Section 192 deals with tax deduction by employer on salary paid to employee. It can be read as under:
“Any person responsible for paying any income chargeable under the head “Salaries” shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.”
This circular deals with various points such as:
- Calculation of taxable salary and tax amount on same and how to distribute it over the year.
- TDS deduction in case of multiple employers.
- TDS deduction if PAN is not available.
- Relief u/s 89 in case of salary in advance or arrear in salary.
- Rebate u/s 87A for salaried employee.
- Salary paid in foreign currency.
- TDS on perquisites paid.
- Procedure of filing quarterly TDS return.
Thus it mainly covers all the regular things in relation to salary income but it also covers some peculiar things for salaried employee i.e.
- Form 12BA: Statement showing particulars of perquisites.
- Form 24G in case of government employee etc.
One must go through if he is into payroll processing or managing TDS for huge number of employees. However it would have been better if they would have issued such circular on 01.04.2019 rather than in the last quarter.
You can download the circular HERE.
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