Salary income is one such income where most of the tax is deducted by the employer himself and hence the employee has to pay tax at the time of filing return of income in very rare scenario’s i.e. only if employee has any other source income etc.
Also, because of the above reason government has started providing pre-filled ITR for salaried employee but the same would work if Form 16 has been properly generated by employer and employee has no variance from income shown by employer.
Since TDS on salary income is an important aspect, CBDT almost every year comes with a circular which is kind of a booklet on TDS on salary income covered u/s 192 of the Income tax act.
CBDT has issued circular 04/2022 for FY 2021-22 on 15.03.2022 and in this circular, it has discussed various aspects of TDS on salary, some of which are as under:
1. Rate on which TDS to be deducted.
2. How to calculate average tax rate. As we know there is no specific TDS rate for TDS on salary.
3. How to provide benefit of advance salary or salary arrears.
4. How to pay challan for salary TDS.
5. TDS return for tax deducted on salary.
6. Documents required for giving deduction from salary income i.e. deduction u/s 80C, 80D, 80G etc.
7. How to calculate salary if same is paid in foreign currency.
8. Various Forms covered under section 192 and other provision for TDS on salary income.
These are few topic which have been discussed by CBDT in detail in this circular.
However, CBDT has still not discussed various points such as:
- Whether employee who is having salary income below Rs. 5 lakh and thus TDS is not deducted should he be included in TDS return or whether Form 16 has to be issued to such person.
- As government want’s to provide pre-filled return to assessee/ employee they should also provide some mechanism whereby if an employee works for more than one employer then the salary details of previous employer gets automatically included in tax calculation by new employer as this creates an issue many times whereby lower tax gets deducted.
To read the full circular for FY 2021-22 CLICK HERE.
To read Circular for TDS u/s 192 for FY 2020-21 CLICK HERE
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