INCOME-TAX DEDUCTION FROM SALARIES UNDER SECTION 192 FINANCIAL YEAR 2021-2022 PDF

GOVERNMENT OF INDIA MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
CENTRAL BOARD OF DIRECT TAXES

DEDUCTION OF TAX AT SOURCE­
INCOME-TAX DEDUCTION FROM SALARIES

UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961
DURING THE FINANCIAL YEAR 2021-22

CIRCULAR NO 04/2022

NEW DELHI, the 15th March, 2022

Table of Contents

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, 2021

2.1 Rates of tax
2.2 Surcharge on lnco1ne-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 Tax

4.4 Mode of Payment of TDS

• 4.4. 1 Compulsory filing of Statement by PAO. Treasury Officer. etc incase of payment of TDS by Book Entry u/ s 200 (2A)
• 4.4.2 Payment by an lncome 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 192(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 206AA)
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 IDS Statement
4.13 Penalty for failure to furnishing statements or furnishing incorrect information (section 71H}
4.14 TDS on Income from Pension
4.15 Matters pertaining 10 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 Val L1e of Perquisites as per Rule 3
5.3 Incomes not included under the head “Salaries” (Exemptions)
5.4 Deductions 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 80CCC)
• 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 80D)
• 55.5 Deductions in respect of expenditure on persons or dependants with disability
• 5.5.6 Deduction in respect of medical treatment, etc.(Section 80DDB)
• 5.5.7 Deduction in respect of interest on loan taken for higher education (Section SOE)
• 5.5.8 Deduction in respect of interest on loan taken for certain house property (Section SOEEA)
• 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 Deductions on respect of donations to certain funds, charitable institutions, etc. (Section SOG)
• 5.5.11 Deductions in respect of rents paid (Section SOGG)
• 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 (Sect on 8OTTA)
• 5.5.14 Deduction in respect of interest on deposits in case of senior citizens (Section 80TTB)

6. Rebate Of Rs12,500 For Individuals Having Total Income Upto Rs 5 Lakh [Section 87A]

7. TOS 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

1. SOME ILLUTRATIONS
2. FORM NO 12BA – IIA FORM NO 12BB
3. PROCEDURE OF PREPARATION AND FURNISHING FORM 24G AT TIN-FACILITATION CENTRE (TIN-FCs)
4. THE PROCEDURE OF FURNISHING FORM 24G
5. PERSON RESPONSIBLE FOR FILING FORM 24G IN CASE OF STATE GOVT DEPARTMENTS/ CENTRAL GOVT DEPARTMENTS
6. PROCEDURE OF PREPARATION OF QUARTERLY STATEMENT OF DEDUCTION OF TAX u/s 200 (3)
7. DEPTT. OF ECO. AFFAIRS NOTIFICATION DATED 22.12.2013
8. BOARD’ S NOTIFICATION DATED 24.1 1.2000
9. BOARD’ S NOTIFICATIO DATED 29.01.200
10. FORM 10BA
    ANNEXURE B
    ANNEXURE C

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