TDS Deduction From Salaries: CBDT Issues Circular

The Central Board of Direct Taxes (CBDT) has issued a circular regarding the deduction of tax at source from salaries.

The Circular comprehensively explained employers' obligations regarding the deduction of tax at source from salaries under Section 192 of the Income-tax Act, 1961, for the financial year 2022–23.

Section 192 of the Income Tax Act, 1961, deals with tax deducted at source (TDS) on salary.

The employer will deduct TDS from the salary payable to the employee. The salary received from the employer is classified as "Income" under the heading "Salary," and the employer is responsible for deducting TDS at the employee's normal income tax rates for the relevant fiscal year. The TDS deducted under Section 192 is reflected in Form 16, which is issued by the employer to the employee.

As per the circular, the employer should quote the gross amount of salary (including any amount exempt under section 10 and the deductions under chapter VI A) in column 321 (Amount paid or credited) of Annexure I of Form 24Q as per NSDL RPU (Return Preparation Utility) and mention codes as per Form 24Q of the Income Tax Rules, 2022.

The employer should quote the amount of salary, excluding any amount exempt under Section 10, in column 338 (Total amount of gross salary) of Annexure II of Form 24Q as per NSDL RPU.

Where a certificate is to be furnished in Form No. 16, the deductor may, at his option, use digital signatures to authenticate certificates.

Circular No. 24/2022

Dated: 07.12.2022

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