Thursday, 3 January 2019

INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2018-19 UNDER SECTION 192

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2018-19 UNDER SECTION 192 OF THE
INCOME-TAX ACT, 1961.

INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2018-19 UNDER SECTION 192

Reference is invited to Circular No. 29/2017 dated 05.12.2017 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 2017-18, 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 2018-19 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.

 RATES OF INCOME-TAX AS PER FINANCE ACT, 2018:
 As per the Finance Act, 2018, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2018-19(i.e. Assessment Year 2019-20) at the following rates:

*Exemption of Visually Impaired employees from Biometrict System Orders Issued Rc.14*

INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2018-19 UNDER SECTION 192 Method of Tax Calculation:


Every person who is responsible for paying any income chargeable under the head 
"Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries" for the financial year 2018-19. The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to requirement to furnish PAN as per sec 206AA of the Act, and shall be deducted at the time of each payment. No tax, however, will be required to be deducted at source in a case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs.2,50,000/- or Rs.3,00,000/- or Rs. 5,00,000/-, as the case may be, depending upon the age of 
the employee.(Some typical illustrations of computation of tax are given at Annexure-I).
Payment of Tax on Perquisites by Employer:
An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at its option, make payment of the tax on such 
perquisites himself without making any TDS from the salary of the employee. However, the employer will have to pay the tax at the time when such tax wasotherwise deductible i.e. at the time of payment of income chargeable under the head salaries to the employee.

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