The Central Board of Direct Taxes (CBDT) stated in a circular regarding TDS deduction from salaries that any person responsible for paying salary must deduct income tax while paying the amount.
According to the circular, the tax should be deducted at the average rate calculated based on the rates in effect for the current fiscal year on the recipient’s estimated salary income for that year. CBDT issued the circular last week.
The circular essentially explains employers’ obligations regarding the deduction of tax at source from salaries under Section 192 of the Income-tax Act of 1961 for Fiscal Year 2022-23.
As per Section 192, the person responsible for paying salary income to provide the recipient with a statement that includes correct and complete details of perquisites or profits in lieu of salary provided to him, as well as the value thereof.