TDS On Salary – Section 192

The TDS rate on salary depends on the income you receive from your employer, based on which you fall into different tax slab rates. According to the tax slab, the rate for your TDS deduction on salary will range from 10% to 30%.

The calculation for TDS on salary is done by reducing the amount of exemption from the total annual salaried income of the employee. The Income Tax Department specifies the exemption limit. At the time of calculating TDS on salary; the employer needs to obtain proof and declaration from the employee before approving the exemption amount.

The employer is liable to deduct TDS on salary at the time of making the payment to the employee. The TDS deduction on salary can only be made at the time when actual payment is made. Also, it will be deducted when the employee’s salaried income is taxable. However, if the pay is equal to or less than Rs.2,50,000, then TDS on salary will not be deducted.

According to Section 192, there must be a relationship of employer-employee for making the TDS deduction on salary. Also, the following employers are liable to make TDS on salary deduction:

Yes, TDS on salary is deducted every month. As per Section 192, the employer will deduct TDS on salary at the time of making the payment to the employee. Since the employee gets a salary every month, the employer will make a deduction for TDS on salary every month. In case, the employer fails to deduct the same, he will be liable to pay the penalty and interest.

Yes, the deduction for TDS on salary is mandatory under Section 192 of the Income Tax Act . Every employer who pays a salaried income to his employees needs to deduct TDS on salary if the income amount is over the basic exemption limit.

There is no form or specific process to claim TDS refunds. The deductee needs to file the income tax returns usually only. However, if there is any excess of TDS on salary charged, what the employee is supposed to pay in the given year, then the refund amount will be due and will need to be shown in the returns filed.

An employee can only be exempt from deduction of TDS on salary in case his/her estimated salary falls below the basic exemption limit. Otherwise, TDS on salary is a mandatory deduction for every employer. This rule shall also apply to employees who do not have a PAN.

TDS on salary is refundable when the amount deducted is higher than what the employee’s actual tax liability is. Many times, the investment details declared at the start of the financial year do not seem to match with the actual investments made at the year-end. In case of such a mismatch, TDS on salary will be refundable w.r.t excess paid.

Upon filing the TDS return, if you identify any error, such as PAN not provided or incorrect challan details, the Form 16/ Form 16A/ Form 26AS will not show the correct tax amount credited with the government. To ensure that the exact tax amount is credited and reflected in all the Forms, a revised TDS return needs to be filed.

Here are the different types of revisions that you can make to submit an error-free TDS return:

The employee can minimize TDS on salary by investing in specific tax saving instruments. The deduction benefits on TDS on salary can be enjoyed under the provisions of different sections. Here are a few important ones below: [3]