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TDS on Salaries - Form 24Q Things to Remember while filing TDS Statement Date: 12th May 2022

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Timing : 04.00 PM to 05:00 PM

Speakers:

CA. Tarun Kumar 01

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CA. Kavita Sharma 1

Session Coverage.

Coverage

Speaker

TDS under Section 192 Computation of TDS

Relevant Due Dates Consequences of default in Compliance Section 194P and its compliances

PART 1 – Legal Aspects of TDS on Salary CA. Tarun Kumar

About Form 24Q Details to be filled in Annexure I & Annexure II of Form 24Q

Things to remember while filing Form 24Q for the 4th quarter TDS Certificate – Form 16 02

PART 2 – Practical Aspects of Form 24Q CA. Kavita Sharma

PART 1 Legal Aspects of TDS on Salary

CA. Tarun Kumar

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TDS UNDER SECTION 192

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Who has to deduct TDS?.

Every person responsible for paying any income chargeable to tax under the head salary shall deduct TDS in accordance with this provision.

Thus, every employer, whether individual, HUF, firm, company, university, co-operative society, local authority, government and such others, is liable to deduct tax on salary paid by him.

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Whose TDS is to be deducted?.

Tax is to be deducted under this provision notwithstanding the residential status of the employee.

Ques: Whether TDS on Salary paid to Non-resident to be deducted under Section 192 or Section 195?

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What is threshold limit for TDS deduction?.

Tax shall be deducted when the income under the head salaries exceeds the maximum exemption limit which is not chargeable to income tax.

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Time of TDS deduction.

Tax from salary shall be deducted at the time of payment of salary only.

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Rate of TDS. Step 1: Calculate the estimated tax liability of the employee on his salary income.

Step 2: Such estimated tax liability shall be deducted from the employee’s salary on monthly basis over the period of employment.

If the employee does not furnish his PAN, then tax shall be deducted at the average rate applicable to him or 20%, whichever is higher.

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Can TDS be deducted at Lower Rate?.

To get a salary without TDS or with lower TDS, the employee will have to apply to the Assessing Officer in Form No. 13.

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TDS to be deducted under Old Regime or New Regime?.  If an employee intimates employer about his intention to opt for section 115BAC, his estimated tax liability shall be computed as per section 115BAC only.  Such estimated tax liability shall be deducted from the employee’s salary on monthly basis over the period of employment.

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Can employee change the Option?.  In case employee does not have income under the head PGBP, such intimation cannot be modified during the year.

 In case an employee has income under the head PGBP, such option once exercised shall not be changed for subsequent period also.

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COMPUTATION OF TDS ON SALARY

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Computation of Estimated Tax Liability.

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Particulars Estimated Salary Income from current employer Add: - Other Income declared by the employee - Salary income from previous employer(s) Less: - Loss under the head house property Gross Total Income Less: - Deductions under Sections 80C to 80U Total Income Estimated tax on total income calculated as per applicable tax rate Less: - Tax already deducted by others - Relief under Section 89 Estimated tax to be deducted under Section 192

Amount xxx xxx xxx

(xxx) xxx (xxx) xxx xxx (xxx) (xxx) xxx

TDS on Non-monetary Perquisites.  The employer may, at its option, make payment of the tax on nonmonetary perquisites himself without deducting any TDS from the salary of the employee.

 The tax, in this case, shall be determined in accordance with the average tax rate computed on the total income of employee including the value of perquisites for which tax has been paid by the employer himself.

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Working with more than One Employer.

If an employee is employed simultaneously with more than one employers, he may furnish the details of his salary income due or received from other employers and tax deducted therefrom in Form 12B to anyone employer of his choice so that the tax is deducted on the total income of the employee only at one end.

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Change in Job during the year.

If an employee changes his job during the year then he may furnish the details of his salary income, due to or received by him from previous employer, and tax deducted therefrom to his current employer so that tax may be deducted by the current employer, if required.

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Relief from Salary in Arrear/Advance.

Where an employee is paid advance salary or arrears of salary or salary of more than 12 months, or by way of profits in lieu of salary, he may provide such details to his employer to compute and provide him Section 89 relief.

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Is other Income to be considered for TDS on Salary?.  A salaried assessee may disclose the details of other income earned by him during the year (other than salaries) to his employer.  If he has also suffered any loss under the head house property, such loss shall be taken into account by the employer to calculate the tax liability provided supporting evidence/proofs have been provided by the employee.

 After receipt of details of other income from employee, the employer shall calculate the amount of tax to be deducted from his monthly salary income.

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RELEVANT DUE DATES

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Deposit of TDS. Nature of tax

Period of deduction

TDS on Salary April February

During the month of March

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Due dates

Office of government

Others

Without challan

With challan

Same day

Within 7 days from end of the month in which tax is deducted

Within 7 days from end of the month in which tax is deducted

Same day

Within 7 days from end of the month in which tax is deducted

Up to 30th April of the relevant assessment year

Filing of Form 24Q.

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Quarter ending 30th June

On or before 31st July

Quarter ending 30th September

On or before 31st October

Quarter ending 31st December

On or before 31st January

Quarter ending 31st March

On or before 31st May of the relevant assessment year

Issuing Form 16.

Form 16 is required to be issued up to 15th June of the financial year immediately following the financial year in which amount was paid and tax has been deducted.

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CONSEQUENCES OF DEFAULT

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Interest for default in deduction.  If deductor fails to deduct tax at source, he shall be liable to pay interest at the rate of 1% for every month or part thereof on the amount of tax he failed to deduct.  The interest shall be calculated for the period starting from the date on which tax was required to be deducted and ending on the date on which tax is actually deducted.

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Interest for default in payment.  If deductor fails to deposit tax at source, he shall be liable to pay interest at the rate of 1.5% for every month or part thereof on the amount of tax he failed to deposit to the credit of the Central Govt.  The interest shall be calculated for the period starting from the date on which tax is deducted and ending on the date on which such tax is actually deposited.

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Penalty and Prosecution.  If deductor fails to deduct the tax at source, he shall be liable to pay penalty under Section 271C. The Joint Commission shall impose a penalty of a sum equal to the amount of tax which such person has failed to deduct or pay.  If deductor fails to deposit the tax to the credit of Central Government, he shall be liable for prosecution under Section 276B. Such an offence is punishable with rigorous imprisonment of 3 months to 7 years and with a fine.

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Disallowance of Expense.

If deductor fails to deduct the tax or after deduction fails to deposit the tax, the underlying expense shall be disallowed under Section 40 while computing the income from business or profession.

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Fee for late filing of Form 24Q.  Where a person fails to furnish a TDS Statement on or before the due date he shall be liable for payment of fees under Section 234E.  The fee for default in furnishing the TDS Statement shall be levied at the rate of Rs. 200 per day during which such failure continues. the amount of fee shall not exceed the total amount deductible or collectible, as the case may be.

 The fee shall be payable before submission of the belated TDS Statement.

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Penalty for failure to file Form 24Q.  The penalty under Section 271H may be imposed if a person fails to furnish the TDS Statement on or before the due dates or furnishes inaccurate information in such Statements.  The penalty payable under this provision is in addition to the fees payable under Section 234E.  The Assessing Officer may impose a penalty of Rs. 10,000 which may extend to Rs. 100,000.

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SECTION 194P AND RELATED COMPLIANCES

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Section 194P.

A specified bank shall be liable to compute the total income and deduct tax therefrom if the account holder is a senior citizen (whose age is 75 years or more) and his income includes only pension income and interest income from any account maintained with such bank. Where tax has been deducted under this provision, the senior citizen shall not be liable to file his return of income.

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Conditions for deduction of Tax.  Income of the deductee includes only pension and interest income.  Interest should be received or receivable from any account maintained by deductee in such specified bank.

 Pension income should be received in the same bank.  A declaration is furnished to the bank in Form 12BBA containing particulars related to pension income.

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Threshold Limit.

No threshold limit has been prescribed for deduction of tax at source. The tax shall be deducted if any tax is payable on the total income (aggregate of pension and interest income after deduction under Chapter VI-A and rebate under Section 87A) of the deductee.

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Exemption from ITR Filing.

Where tax has been deducted under this provision, deductee shall not be liable to file his return of income for the assessment year relevant to the previous year in which tax has been deducted.

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PART 2 – Practical Aspects of Form 24Q

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About Form 24Q

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Form 24Q.  Statement of tax deducted at source under Section 192 and Section 194P shall be filed with the Income-tax Dept. in Form 24Q on a quarterly basis.  While submitting Form No. 24Q for the last quarter, the deductor shall include particulars of salary components of such employee for the period of employment in Annexure I.  The particulars of pension and interest income of specified senior citizen paid or credited during the financial year and net tax payable thereon under section 194P, shall be included in Annexure II.

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Mandatory Requirements. 

TAN of Deductor.



Challan details like challan no., challan date, challan amount, BSR code, aggregate amount in challan, TDS and Interest (divided among employees).

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Employee Name and PAN.



Employee salary and other income details form 12BB.

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Sub-sections based on employee category as below: • Section 192A – Remuneration given to the Government employees apart from the employees of the Union Government.

• Section 192B – Remuneration given to the non-government employees.

• Section 192C – Remuneration is given to the employees of the Union government

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Details to be filled in 24Q (Annexure I & Annexure II)

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Form 24Q.

This section covers general information about Deductor like TAN, PAN, Name, address details etc.

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Form 24Q.

This section covers challan information. All the challans you have deposited and mapped with 24Q for that period will be shown here.

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Annexure I.

Annexure I provides details of all employees for whom TDS is deducted.

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Annexure II.

Annexure II covers details of salary and other incomes and deductions for all employees.

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Things to remember while filing Form 24Q

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Things to Remember.  No deduction in 4th quarter: Even if employee don’t have any deduction in 4th quarter but had deduction in any 3 previous quarter, annexure II need to be filled for that employee.

 If an employee is part of company for short period and left the organisation during the year, Annexure II need to be filled for that employee also.  If employee has salary below taxable limit and no tax deduction is made then it is not mandatory to issue Form 16.

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TDS Certificate – Form 16

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Form 16.  Where the employer has deducted tax under Section 192 from the employee's salary or by the specified bank under Section 194P from the total income of the senior citizen, then the employer/specified bank shall issue a TDS certificate to the employee in Form 16.

 The TDS Certificate in Form 16 has two parts – Part A and Part B.  Part A of the certificate contains the details of tax deducted on salary. Whereas Part B contains the details of the salary and various allowances, deductions, rebate etc. claimed or allowed to the employee. In respect of tax deducted under Section 194P.

 Part B contains details of pension, interest income and various deductions, rebate etc. allowed to the senior citizen.

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Important Points.  Valid PAN is mandatory for generation of Form 16(Part A) from TRACES. Correction statement is required to be filed to report the valid PAN for downloading Form 16 (Part A).  Earlier it was mandatory to issue Form 16 Part A from TRACES. Now it has been made mandatory for employers to download and issue Part-B of Form 16 to employees also from the TRACES portal.  If an employee is working, or has worked, with more than one employer during the financial year then each employer is required to issue Part A of Form 16 in respect of the period during which the assessee was employed with each of the employers and Part B may be issued by each of the employer or by last employer at the option of the assessee.

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Query Session.

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