TDS deposit rules for salaried employers have been relaxed from October 1. Learn more
In a major relief for employers, the Center has eased restrictions on companies to deposit tax deducted at source (TDS) from employees’ salaries. From October 1, 2024, employers will have additional time to deduct tax deducted at source (TDS) from their employees’ salaries. The updated rules will give businesses more time to file TDS returns with the government from October 1.
TDS (Tax Deduction at Source) is the amount that an employer deducts from an employee’s salary and pays to the government. According to the Income Tax Act, employers have to deduct TDS from salary income based on the applicable slab rate. Generally, the deadline for depositing TDS is the 7th day of the month following the month in which it is deducted from the employee’s salary.
How much tax do I pay?
From October 1, 2024, employers will have an extended period of time to deduct tax deducted at source (TDS) from their employees’ salaries. The revised rules will allow companies to deposit TDS till the deadline for filing TDS returns, giving them 20 days more grace period than before.
Previously, companies had to deposit TDS for 60 days before receiving notice of default. However, the revised norms now allow companies to submit TDS deposits before the TDS filing deadline to avoid penalties.
TDS norms have recently changed to allow businesses to submit TDS payments to the government with longer deadlines. This change will benefit businesses while protecting their employees’ TDS credits. However, if the tax deducted is not paid by the prescribed date, the Income Tax Department may issue a prosecution notice to the company for not filing TDS returns on time.
What happens if the employer does not pay TDS?
If the employer deducts TDS but does not credit it, the employee cannot claim TDS credit. In such cases, Section 205 of the Income Tax Act protects employees from double taxation if they can prove TDS deduction from their income.
To claim TDS credit and avoid further tax liability, individuals must provide proof to the income tax department that the tax has been deducted from their salary.
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