15 Mar 2018

TDS on Salary - Sec 192 C

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CA Vikas Agrawal
M.com,CA
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   •    14 Year 11 Month  experience

Section 192C of the Income tax act explains the provisions for TDS on Salary.

Based on the salary income and the investment declaration statement, the employer will estimate the taxable income and start deducting tax on a monthly basis in the form of tax deducted at source (TDS) before paying it to the employee. 
The employees are asked to furnish the tax declaration statement, indicating the proposed investments for deductions (Section 80C etc) that they wish to undertake during the year. The TDS deduction happens after taking into account any such declarations by the employee. Such declarations are typically asked by employers in the beginning of the financial year. 

In the last three months of the FY, the employer asks for actual documentary proof of the investment declaration made by employees. This helps the employer to start deducting TDS on the basis of actual investments. If the tax already deducted by one's employer is in excess and cannot be adjusted in the last 2-3 months of the FY, any such excess TDS will reflect in Form 16 and the refund will have to be claimed by the employee from the I-T Department. 

"As an employee, one would like to check if correct TDS has been deducted and submitted by the employer to the government. For this one has to visit the website TRACES, which is a web-based application of the Income-tax Department. It enables a PAN holder to register and view tax credit (Form 26AS) online which is updated on a near real-time basis. Dr. Surana says, ""An employee can verify from time to time, his TDS (which has been deducted by the employer) in Form26AS from the TRACES website. The facility of accessing Form 26AS is available to a PAN holder having a net banking account with any of authorized banks."" But make sure that your PAN is mapped to your bank account to access form 26AS from Internet banking.

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