When TDS is applicable on salary?

If you have a job or want to work in a company in the future, you should know different components of your salary. This will help you remain one step ahead. A friend of mine recently shared with me details about TDS on salary. I was surprised to say the least. Read below to know what I learned.

According to Section 192 of the Income Tax Act, 1961. Individuals are liable to get  tax deducted at source (TDS) on their salary. TDS is deducted when the salaried income of an employee is  taxable.

TDS deduction can only take place at the time when actual payment is made. Another thing to remember is that TDS will be applicable on salary when the pay of the employee or the individual is more than Rs. 2,50,000.

If the pay is equal to or less than Rs. 2,50,000, then TDS on salary will not be deducted.

TDS will be deducted for residents of the country below 60 years when their minimum income is Rs. 2.5 lakh.

TDS will be deducted for senior citizens of the country between the age of  60 and 80 when their minimum income is Rs. 3 lakh.

TDS will be deducted for senior citizens of the country above  the age of 80 when their minimum income is Rs. 5 lakh.

This is the end of my answer about tds on salary.

My cousin runs a company of around 50 people and he told me when does the TDS on salary get deducted, so I will be able to answer your query.

I want you to know that the Income Tax Act, 1961 (Section 192) deals with TDS on salary. TDS is the amount that the authorized deductor deducts from an individual’s income and deposits it to the IT department. The employer will deduct TDS from the salary payable to the employees.

The salary received from the employer is categorized in ‘Income’ under the ‘Salary’ head. the employer will deduct TDS on an average income tax rate on the basis of the current slab rate during the applicable financial year by keeping your estimated income in consideration. The TDS deducted under section 192 is reflected in Form 16. Now you know about the TDS rules for salary.

TDS isn’t deducted during the accrual of salary, it’s deducted at the time of salary’s actual payment. Similarly, the tax will also get deducted if your employer pays your salary in advance or you receive arrears from them.

TDS will not be deducted if your estimated salary is less than the basic exemption limit.

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Now you know when TDS on salary is applicable.