CBDT Circular on Salary TDS for FY 2019-20 (AY 2020-21) u/s 192 of Income Tax

Income Tax Deptt./ CBDT has issued Circular No. 4/2020 dt. 16 Jan. 2020 containing instructions on the provisions/ TDS rates applicable in respect of salary payment u/s 192 during the Financial Year 2019-20 (Assessment Year 2020-21), including explanations on many other related issues/ provisions under the Income Tax Act/ Rules.

It may be reiterated that the instructions contained in the aforesaid CBDT Circular on Salary TDS for FY 2019-20, are not exhaustive and are issued by the CBDT only with a view to guide the employers/ employees to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962, the Finance Act 2015, the relevant circulars/ notifications, etc.

Corrigendum dt. 5 March 2020 to CBDT Circular 4/2020

CBDT Income Tax Circular 4/2020 dt. 16 Jan. 2020

Subject: ​Income-tax Deduction from salaries during the Financial Year 2019-20 under section 192 of the Income-tax Act, 1961

Reference is invited to Circular No. 1/2019 dated 01.01.2019 whereby the rates of deduction of income-tax from the payment of income under the head “Salaries” under Section 192 of the Income-tax Act, 1961 (hereinafter ‗the Act‘), during the financial year 2018-19, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head “Salaries” during the financial year 2019-20 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in. (contd… please refer above attachment)

Index of Contents

CBDT Circular No. 4/ 2020 dt. 16 Jan. 2020 TDS on Salary

1. General

2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2019

2.1 Rates of tax

2.2 Surcharge of Income tax

2.3.1 Health and Education Cess

3. BROAD SCHEME OF TAX DEDUCTION AT SOURCE FROM SALARIES

3.1 Method of Tax Calculation

3.2 Payment of Tax on Non monetary Perquisites by Employer

3.2.1 Computation of Average Income Tax

3.3 Salary From More Than One Employer

3.4 Relief When Salary Paid in Arrear or Advance

3.5 Information regarding Income under any Other head

3.6 Computation of Income under the head – Income from house property

3.7 Adjustment for Excess or Shortfall of Deduction

3.8 Salary Paid in Foreign Currency

4. PERSONS RESPONSIBLE FOR DEDUCTION OF TAX AND THEIR DUTIES

4.1 Stipulation of section 204 of the Act

4.2 Tax determined to be deducted from Salary u/s 192

4.3 Deduction of Tax at Lower Rate

4.4 Deposit of Tax Deducted

4.4.1 Due dates for payment of TDS

4.4.2 Mode of payment of TDS

4.5 Interest, Fee, Penalty& Prosecution for Failure to Deposit Tax Deducted

4.6 Furnishing of Certificate for Tax Deducted (Section 203)

4.7 Mandatory Quoting of PAN and TAN

4.8 Compulsory Requirement to furnish PAN by employee (Section 206AA)

4.9 Statement of Deduction of tax under of section 200 (3) [Quarterly Statement of TDS]

4.10 TDS on Income from Pension

4.11 Matters pertaining to 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 Definition of ―Salary‖, ―perquisite‖ and ―profit in lieu of salary (Section 17)

5.3 Income not included under the Head ―Salaries‖ (Exemptions)

5.4 Deduction u/s 16 of the Act form the Income from Salaries

5.5 Deductions under Chapter VI-A of the Act

6. REBATE OF RS. 12500 FOR INDIVIDUAL HAVING TOTAL INCOME UPTO RS. 5 LAKH (SECTION 87A)

7. TDS ON PAYMENT OF ACCUMULATED BALANCE UNDER RECOGNISED PROVIDENT FUND AND CONTRIBUTION FROM APPROVED SUPERANNUATION FUND

8. DDOS TO SATISFY THEMSELVES OF THE GENUINENESS OF CLAIM

9. CALCULATION OF INCOME-TAX TO BE DEDUCTED

10. MISCELLANEOUS

ANNEXURE 

I. SOME ILLUSTRATIONS

II. FORM NO 12BA

IIa. FORM NO 12BB

III. REVISED PROCEDURE FOR FURNISHING QTLY E-TDS/ TCS STATEMENT BY DEDUCTORS/COLLECTORS

IV. THE PROCEDURE OF FURNISHING FORM 24G

V. PERSON RESPONSIBLE FOR FILING FORM 24G IN CASE OF STATE GOVT DEPARTMENTS/ CENTRAL GOVT DEPARTMENTS

VI. PROCEDURE OF PREPARATION OF QUARTERLY STATEMENT OF DEDUCTION OF TAX u/s 200(3)

VII. DEPTT. OF ECO. AFFAIRS NOTIFICATION DATED 22.12.2013

VIII. BOARD‘S NOTIFICATION DATED 24.11.2000

IX. BOARD‘S NOTIFICATION DATED 29.01.2001

X. FORM NO. 10BA

CBDT Circular 1/2019 Income Tax dt. 1 Jan. 2019

Corrigendum 1 dt. 18 Jan. 2019 to CBDT Circular 1/2019 Income Tax dt. 1 Jan. 2019

Corrigendum 2 dt. 8 Feb. 2019 to CBDT Circular 1/2019 Income Tax dt. 1 Jan. 2019

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  1. RAJENDRA TIWARI

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