CBDT Circular On TDS From Salaries--Points to Be Taken Care of By Tax Deductors

CA. Manoj Gupta

Every year the CBDT issues a Circular on source income-tax deduction from salaries under section 192 of the Income Tax Act, 1961. This year is no different and Circular Number 24/2022 dated 07-12-2022 has been issued. This circular details out the provisions relating to salaries and procedure for deduction of tax by DDOs. At the same time this circular details out certain points to be kept in mind by DDOs while deducting tax. All these points are being discussed in this update.

1. TDS on family pension

Family Pension is chargeable to tax under the head 'Income from other sources' and not under the head 'Salaries'. Therefore, provisions of section 192 of the Act are not applicable. Hence, DDOs are not required to deduct TDS on family pension paid to person.

2. Method of Tax Calculation

Any employee intending to opt for the concessional rates of tax under section 115BAC of the Act, may intimate the deductor, being his employer, of such intention for each previous year and upon such intimation, the deductor shall compute his total income, and make TDS thereon in accordance with the provisions of section 115BAC. If such intimation is not made by the employee, the employer shall make TDS without considering the provision of section 115BAC of the Act. The intimation so made to the deductor shall be only for the purpose of TDS during the previous year and cannot be modified during that year. [CBDT Circular No. C1 of 2020, dated 13-04-2020]