The CBDT has issued instructions/circular compiling the provisions/rates applicable u/s 192 for TDS on Salary payments to employees during FY 2022-23 (AY 2023-24), for the guidance of concerned employers/employees.
As part of its annual routine, CBDT compiles this explanation of employers’ TDS obligations on salary payments, along with details on a wide range of other related issues and provisions found in the Income Tax Act and Rules.
It may be reiterated that the instructions contained in this CBDT Circular are not exhaustive (all inclusive) and are issued only with a view to guide the employers/ employees to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt or discrepancy, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962, relevant Finance Act, and the relevant circulars/ notifications, etc.
CBDT Income Tax Circular 24/2022 dt. 07/12/2022: Instructions on Salary TDS during FY 2022-23 (AY 2023-24) u/s 192 of Income Tax Act, 1961
Subject: Income-tax Deduction from salaries during the Financial Year 2022-23 under section 192 of the Income-tax Act, 1961
Reference is invited to Circular No. 04/2022 dated 15.03.2022 whereby the rates of deduction of income-tax from the payment of income under the head “Salaries” under Section 192 of the Income-tax Act, 1961 (hereinafter ‘the Act’), during the financial year 2021-22, were intimated. The present Circular contains the rates of deduction of Income-tax from the payment of income chargeable under the head “Salaries” during the financial year 2022-23 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). All the sections and rules referred are of Income-tax Act, 1961 and Income-tax Rules, 1962 respectively unless otherwise specified. The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- http://www.incometaxindia.gov.in.
As per section 192(1) of the Act, 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 the head of Salary income for that financial year.
The section also provides that a person responsible for paying any income chargeable under the head “Salaries” shall 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.(contd… please refer above attachment)
Index of Contents
CBDT Income Tax Circular 24/2022 dt. 07/12/2022 TDS on Salary
1. Definition of “salary”, “perquisite” and “profit in lieu of salary” (Section 17)
1.1 what is salary?
1.2 What is a Perquisite?
1.3 what is profit in lieu of salary?
2. Rates of Income-Tax as per Finance Act, 2022
2.1 Rates of tax
2.2 Surcharge on Income-tax
2.3 Health and Education Cess
2.4 Concessional Rates of Tax u/s 115BAC
3. Section 192 of the Income-Tax Act, 1961: Broad scheme of Tax Deduction At Source from “Salaries”
3.1 Method of Tax Calculation
3.2 Payment of Tax on Perquisites by Employer
3.3 Computation of Average Income Tax
3,4 Salary from more than one employer
3.5 Relief When Salary Paid in Arrear or Advance
3.6 Information regarding Income under any other head
3.7 Computation of income under the head “Income from house property”
3.7.1 Conditions for claim of deduction of interest on borrowed capital for computation of Income from House Property [section 24(b)]
3.8 Adjustment for Excess or Shortfall of Deduction
3.9 Salary Paid in Foreign Currency
4 Persons Responsible For Deducting Tax And Their Duties
4.1 Tax Deduction at Source
4.1.2 Rates for tax deduction at source
4.2 Deduction of Tax at Nil or Lower Rate
4.3 Deposit of Tax Deducted
4.3.1 Due dates for payment of TDS
4,4 Mode of Payment of TDS
4.4.1 Compulsory filing of Statement by PAO, Treasury Officer, etc in case of payment of TDS by Book Entry u/s 200(2A)
4.4.2 Payment by an Income Tax Challan
4.5 Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted
4.6 Furnishing of Certificate for Tax Deducted (Section 203)
4.7 Furnishing of particulars pertaining to perquisites, etc.[Section I92(2C)]
4.8 Mandatory Quoting of PAN or Aadhaar number as the case may be and TAN
4.9 Compulsory Requirement to furnish PAN or Aadhaar by employee (Section 206 AA)
4.10 Statement of deduction of tax under section 200(3) [Quarterly Statement of TDS]
4.11 Fee for default in furnishing statements u/s 200(3) of the Act.
4.12 Rectification of mistake in filing TDS Statement
4.13 Penalty for failure to furnishing statements or furnishing incorrect information (section 27IH)
4.14 TDS on Income from Pension
4.15 Matters pertaining to the TDS made in case of Non-Resident
5 Computation of Income Under The Head “Salaries”
5.1 Income chargeable under the head “Salaries”
5.2 Value of Perquisites as per Rule 3
5.3 Incomes not included under the head “Salaries” (Exemptions)
5,4 Deduct ions u/s 16 of the Act
5.5 Deductions Under Chapter VI-A of the Act
5.5.1 Deduction in respect of Life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures. etc. (section 80C)
5.5.2 Deduction in respect of contribution to certain pension funds (Section 8OCCC)
5.5.3 Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD)
5.5.4 Deduction in respect of health insurance premia paid, etc. (Section 800)
5.5.5 Deductions in respect of expenditure on persons or dependents with disability
5.5.6 Deduction in respect of medical treatment, etc. (Section 80DDB)
5.5.7 Deduction in respect of interest on loan take n for higher education (Section 80E)
5.5,8 Deduction in respect of interest on loan taken for certain house property (Section 80EEA)
5.5.9 Deduction in respect of the interest payable on loan taken for the purpose of purchase of an electric vehicle (80EEB)
5.5.10 Deduct ions on respect of donations to certain funds, charitable institutions, etc. (Section 80G)
5.5.11 Deductions in respect of rents paid (Section 8OGG)
5.5.12 Deductions in respect of certain donations for scientific research or rural development (Section 80 GGA)
5.5.13 Deduction in respect of interest on deposits in savings account (Section 80TTA)
5.5.14 Deduction in respect of interest on deposits in case of senior citizens (Section 80TTB)
6. Rebate of Rs. 12,500 for Individuals having Total Income upto Rs 5 lakh [Section 87A]
7. TDS on payment of accumulated balance under recognised provident fund and contribution from approved superannuation fund
8. DDOs to obtain evidence/ proof of claims
9. calculation of income-tax to be deducted
10. Miscellaneous
ANNEXURE
i) Some Illustrations
ii) Form No. 12BA
iia) Form No. 12BB
iii) Procedure of preparation and furnishing Form 24G at TIN-Facilitation Centres (TIN-FCs)
iv) The procedure of furnishing Form 24G
v) Person responsible for filing Form 24G in case of State Government Departments/ Central Government Departments
vi) Procedure of preparation of quarterly statement of Deduction of Tax u/s 200(3)
vii) Deptt. of Economic Affairs Notification dated 22/12/2013
viii) CBDT’s Notification dated 24/11/2000
ix) CBDT’s Notification dated 29/01/2001
x) Form No. 10BA
Annexure B
Annexure C
You can also refer the past Circulars of the CBDT regarding TDS on Salary u/s 192, as under:
CBDT Income Tax Circular 4/2022 dt. 15/03/2022 (FY 2021-22)
CBDT Income Tax Circular 20/2020 dt. 03/12/2020 (FY 2020-21)
CBDT Income Tax Circular 1/2019 dt. 01/01/2019 (FY 2018-19)
CBDT Income Tax Circular 29/2017 dt. 05/12/2017 (FY 2017-18)
CBDT Income Tax Circular 20/2015 dt. 02/12/2015 (FY 2015-16)