CBDT Circular on Salary TDS (FY 2020-21)

CBDT issues circular on salary TDS provisions/ rates applicable u/s 192 during FY 2020-21 (AY 2021-22), 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 2020-21, 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 2020, Taxation & Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020, the relevant circulars/ notifications, etc.

CBDT Circular 4/2020 Income Tax dt. 3rd Dec. 2020: Instructions on Salary TDS during FY 2020-21 (AY 2021-22) u/s 192 of Income Tax Act, 1961>> View/ Download

Subject: ​Income-tax Deduction from salaries during the Financial Year 2020-21 under section 192 of the Income-tax Act, 1961

Reference is invited to Circular No. 4/2020 dated 16.01.2019 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 2020-21, 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 2020-21 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). All the Sections and Rules referred are of the Income Tax Act 1961 and Income Tax Rules 1961, unless specified otherwise. 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. 20/ 2020 dt. 3rd Dec. 2020 TDS on Salary

1. General

2, RATES GF INCOME-TAX AS PER FINANCE ACT, 2020
2.1 Rates of tax
2.2 Concessional Rates of Tax u/s 115BAC
2.3 Surcharge of Income tax
2.4 Health and Education Cess

3. BROAD SCHEME OF TAX DEBUCTION AT SOURCE FROM SALARIES
3.1 Method of Tax Calculation
3.2 Payment of Tax on Perquisites by Employer
3.2.1 Computation of Average Income Tax
3,2.2 Illustration
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 DEDUCTING TAX AND THEIR DUTLES
4.1 Stipulation of section 204 of the Act
4.1.1 Tax determined to be deducted from Salary u/s 192
4.2 Deduction of Tax at Lower Rate
4.3 Deposit of Tax Deducted
4.4.1 Duc dates tor payment of TDS
4.4.2 Mode of payment of TDS
4.4.2.1 Compulsory filing of Statement by PAO, Treasury Officers, etc. in case of payment of TDS by Book Entry u/s 200 (2A)
4.4.2.2 Payment by an Income Tax Challan
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 Permanent Account Number or Aadhaar number, as the case may be, and TAN
4.8 Compulsory Requirement to furnish PAN by employee or Aadhaar number, as the case may be, 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 UINDER THE HEAD “SALARIES”
5.1 Income chargeable under the bead “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
5.5 Deductions under Chapter VI-A of the Act

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

7. TDS ON PAYMENT OF ACCUMULATD BALANCE UNDER RECOGNISED PROVIDENT FUND AND CONTIBUTION FROM APPROVED SUPERANNUATION FUND

8. DDOs TO OBTAIN EVIDENCE/ PROOF OF CLAIMS

9. CALCULATION OF INCOME-TAX TO BE DEDUCTED

10. MISCELLANEOUS

ANNEXURE 

I. SOME ILLUSTRATIONS
II. FORM No. 12BA
IIa. FORM No. 12BB
III. PROCEDURE FOR PREPARING AND FURNISHING FORM 24g AT TIN FACILITATION CENTERS (TIN-FCs)
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’s past Circulars/ Instructions on Salary TDS u/s 192

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

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

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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