Section 192: Provisions for TDS on Salaries
Individuals receiving salaries have to get a certain amount of Tax Deducted at the source as per the provisions mentioned in Section 192 of the Income Tax Act, 1961. Employers deduct tax before making the payment to the employee and deposit the deducted amount to the Income Tax Department. However, there is a specified exemption limit, and if the gross income of an employee is below the limit, no TDS is deducted. Read more to know further about section 192 and the provisions attached to the salary income and TDS on the same.
Who can deduct TDS under Section 192?
Employers are required to deduct tax and deposit it to the government. If an employer is one of the following, they can deduct the TDS though the status of employer in irrelevant for the tax deductions under the section 192. There has to be an employer and employee for TDS deduction, and the salary can be above the basic exemption limit. Even the size of a company or the number of employees an employer has does not make any difference in TDS deduction.
- Companies (private or public)
- Individuals
- Hindu Undivided Families or HUFs
- Firms
- Proprietorship Firms
- Central and governments and PSU
- Trusts
- Co-operative societies
When is TDS Deducted?
As the rules mandated under section 192, the TDS has to be deducted at the actual time of payment of the salary instead of the accrual of salary. It means the employer has to deduct the TDS when they are making the payment to the employee no matter when the latter has earned the salary.
Time Limit to Deposit TDS
| Months | Quarter | Deduction Date | Deposit Date | Date of Filing TDS Returns |
| April to June | Q1 | The date of payment | 7th of next month immediately to the month when payment is made | 31st July |
| July to September | Q2 | “ | “ | 31st October |
| October to December | Q3 | “ | “ | 31st January |
| January to March | Q4 | “ | “ | 31st May |
Rates of TDS under Section 192
Under Section 192 of the Income Tax Act, the rates of TDS are calculated based on the applicable slab rates. There is no fixed rate of TDS under this section, and the total taxable income on which TDS is applicable comes after available deductions. The rate differs as per the new and old tax regimes.
Old Tax Regime
| Income slabs (Rs in lakhs) | Below 60 years | Senior Citizens (aged between 60 and 80) | Super Senior Citizens (more than 80) |
| Up to 2.5 | Nil | Nil | Nil |
| 2.5 to 3 | 5% | Nil | Nil |
| 3 to 5 | 5% | 5% | Nil |
| 5 to 10 | 20% | 20% | 20% |
| 10 | 30% | 30% | 30% |
| Income slabs (Rs in lakhs) | Rates |
| Up to 4 | Nil |
| 4 to 8 | 5% |
| 8 to 12 | 10% |
| 12 to 16 | 15% |
| 16 to 20 | 20% |
| 20 to 24 | 25% |
| Above 24 | 30% |
How to Calculate TDS u/s 192?
- All other sources of income have to be considered if an employee has provided the details
- Home loan interest will be set off from the total taxable salary if proof is provided in form 12BB
- Individuals make some investments to reduce their tax liability and optimize their savings, and if they have provided details of such investments in Form 12BB, it will reduce the taxable income further
For example
- Estimated salary income- Rs 12 lakhs
- Standard deductions- Rs 50K
- Total gross income- Rs 11.50 lakhs
- Deductions u/s 80C- Rs 1.50 lakhs
- Total taxable income- Rs 10 lakhs
- Estimated tax liability- Rs 50K
- Additional Cess @4%- Rs 2000
- Estimated total tax liability- Rs 52K
- TDS per month- Rs 4333 approx
The above data will be applicable till the assessment year 2026-27 for the financial year 2025-26. There will be new deductions and slab rates for AY 2026-27. In case there are multiple employers, you can provide all related details in Form 12B. Even in the case of a different employer, if you changed employment or resigned from the job, then you can use form 12B.
How to Deduct TDS in the Case of Multiple Employers?
Step 1: In case of multiple employers in the same financial year, the employee needs to provide specific details to the new employer so that the employer can deduct TDS accordingly. When you switch to a new job and do not have other simultaneous job, you have to provide the previous employer’s details in Form 12B to the new employer.
Step 2: Unlike step 1, if you are engaged with multiple employers simultaneously and receive salary from all of them, in this case, you have to select a particular employer and designate it to deduct TDS on behalf of the other employers.
Consequences for Non-Compliance with Section 192
- As per section 234E of the Income Tax Act, if an employer fails to deduct and/or deposit TDS, they may face a penalty of Rs 200 per day
- In case the employer fails to deduct TDS on time of salary payment, 1% interest on the TDS amount is levied from the day of the TDS deductible till the TDS deposited
- In case the employer has deducted the TDS but failed to deposit it by the 7th of the following month to the government, then an interest of 1.5% on the TDS amount is levied from the day of TDS deducted till the date TDS is deposited
Under section 89, marginal relief on tax deducted from the salary of employees of the government, companies, co-operative societies, local authorities, universities, AOPs, etc., is provided. Reach out to TaxDunia to get your returns filed from the comfort of your home without worrying much about the paperwork and dealing with the authorities.
