Tax deducted at source (TDS) for Employers - Section 192

If you are employer, you will be liable to deduct TDS u/s 192 for all your employees having taxable
income. This is applicable to all employers without exception whether Individual, HUF, Partnership,
Company, AOP etc.
Key Points - TDS for salary

Who is liable to deduct TDS? Any employer be it Individual, company, HUF , Partnership
etc. (No exceptions)
For whom should TDS be deducted? For every employee having taxable salary under the head
'Income from Salaries'
At what rate should tax be deducted? At average rate of income tax for the employee on the basis
of estimated annual income
What is taxable salary for AY 2015-
16?
For individuals below 60 years --> above 2,50,000/-
For individual above 60 yrs but below 80 yrs --> above
3,00,000
For individuals above 80 yrs --> above 5,00,000/-

Other points - TDS for salary
TDS to be deducted on salary paid (not on accrual basis)
If Employee has more than one employment, then employee to provide full particulars to
employer in writing regarding salary received
o Employer not liable to deduct tax, if employee does not intimate his earning from
other employer
Monetary value of perquisites to be included in calculation of taxable salary
TDS deductible on payments made to non resident employee
For application of section 192, there must exist employer employee relationship between
payer and payee.
o For eg. Director of company , visiting professors are not employees and therefore no
TDS u/s 192 deducted on amount paid to them
For the purposes of deduction of tax on salary payable in foreign currency, the value in
rupees of such salary shall be calculated at the prescribed5 rate of exchange.

TDS rate for salary

Below example shows how to calculate monthly TDS rate for salary:
Mr. ABX receives Rs. 40,000/- per month as salary. He is below 60 years of age.

Total income chargeable to salary in year = 4,80,000/- Rs.
Tax on salary including cess = 23,690/- Rs.
Average rate of tax = 23,690 / 480,000 * 100 = 4.94%
TDS to be deducted per month = 40,000 * 4.94% = Rs 1,974/-