Tds on salary

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Sunny Samala (Querist)
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29 January 2015 Is TDS deductable on salary of employee every month or at the end of the year by company? if company deducts the same at year end will it be a problem from income tax point of view?

Nikhilesh Kataria

Nikhilesh Kataria (Expert)
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30 January 2015 Dear Sunny,

Section 192 deals with the provisions relating to TDS on salary. Please note that the TDS is to be deducted AT THE TIME OF PAYMENT after deducting income tax on the amount payable at the average rate of income tax.

So if you have made payment of entire salary at the end of the year then TDS will be deducted at the end of year only.

However, if your are making payment month wise then TDS has to be deducted month wise only. If you have not deducted TDS month wise then there may be liability of interest 201(1A) and even you may be treated in default u/s 201(1) resulting in penalty u/s 221