Any person responsible for paying any income employer chargeable under the head “Salaries” shall, at the time of payment, deduct income-tax on the amount payable at the rates applicable to the estimated income of the employee under this head for that financial year.

By on 13-11-2018

TAX DEDUCTED AT SOURCE ON SALARY INCOME

Any person responsible for paying any income (employer) chargeable under the head “Salaries” shall, at the time of payment, deduct income-tax on the amount payable at the rates applicable to the estimated income of the assessee (employee) under this head for that financial year. It is not the total income that is subject to deduction of tax at source but the estimated income under the head “Salaries” that is important. W.e.f. August 1, 1998, an assessee having an income under the head ‘salaries’ may furnish in the prescribed manner giving the details of the losses under the head ‘Income from House Property’ to the person responsible for making the payment who shall taking into account such loss for the purposes of computing the tax deductible from salaries, which may be reduced in such a case.
Only where the loss under the head “Income from House Property” has been taken into account TDS deductible from the head salaries may be reduced due to such loss taken into account. For this purpose the salary shall be computed in the same manner as discussed under the head ‘Salaries’. From such salary the following deductions shall be made:

(a) amount deductible Sections 80C, 80D, 80DD and 80DDB.
(b) deduction under Section 80G, in respect of donations made to the National Defence Fund, Jawahar Lal Nehru Memorial Fund, the Prime Minister’s Drought Relief Fund etc. subject to conditions laid down under Section 80G;
(c) deduction under Section 80GG in respect of rent paid; 
(d) deduction under Section 80RRA in respect of remuneration received in foreign currency
(ii) The employer may, at the time of making any deduction, increase or reduce the amount to be deducted for the purpose of adjusting any excess or deficiency arising out of any previous deductions or failure to deduct during the financial year. 
(iii) The trustees of a recognised provident fund or an approved superannuation fund shall deduct the tax at the time of the accumulated balance due to an employee is paid provided it is not exempted.

No tax will be required to be deducted at source in case the Gross Total income does not exceeds – ` 2,50,000 in case of individual below 60 years of age. 
– ` 300,000 in case of individual having the age of 60 years but below 80 years
– ` 5,00,000 in case of individual having the age of 80 years and above.

Where the salary is payable to an assessee outside India in foreign currency its value in rupees shall be the telegraphic transfer buying rate of such currency as on the date on which the tax is required to be deducted at source. ‘Telegraphic transfer buying rate’ means the rate of exchange adopted by the State Bank of India for buying such currency as made available to the bank through a telegraphic transfer. 
Every employer shall file a quarterly return in Form No. 24Q within 15 days from end of quarter and for the quarter ending on 31st March will be submitted on 31st May following the close of the relevant financial year showing
(a) the name and address of every employee who is drawing such amount as may be prescribed; 
(b) the amount of income so received by or so due to each such person; and
(c) the amount of tax deducted and deposited from the income of such person.

The employer shall issue a certificate of deduction of tax to the employee in Form No. 16.

Also, a person responsible for paying any income chargeable under the head “Salaries” is required to furnish, to the person to whom such payment is made, a statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in such form and manner as may be prescribed