As per the Finance Act, 2014, income-tax is required to be deducted under Section 192 of the Income-tax Act 1961 from income chargeable under the head “Salaries” for the financial year 2013-14 (i.e. Assessment Year 2014-15).
The amount of income tax deductible is required to be calculated at the average rate of income tax computed on the basis of rates in force. No tax is required to be deducted at source in any case unless estimated salary income including value of perquisites and/or profit in lieu of salary paid or allowed during the financial year exceeds the maximum amount not chargeable to tax for the individual relevant for the Financial Year.
Tax shall be deducted at the time of making payment of salary.
Section 192(2) deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the taxpayer may choose) from the aggregate salary of the employee who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head “Salaries” due or received from the former/other employer and also tax deducted at source there from, in writing and duly verified by him and by the former/other employer. The present/ chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer).
Deposit of Tax Deducted: Rule 30 prescribes time and mode of payment of tax deducted at source to the account of Central Government.
Prescribed time of Payment/Deposit of TDS made to the credit of Central Government account is as under:
(a) In case of an Office of Government:
| Sl. No. | Description | Time up to which to be deposited. |
| 1 | Tax deposited without Challan [Book Entry] | SAME DAY |
| 2 | Tax deposited with Challan | 7TH DAY NEXT MONTH |
| 3 | Tax on perquisites opts to be deposited by the employer. | 7TH DAY NEXT MONTH |
(b) In any case other than an Officer of Government
| Sl. No. | Description | Time up to which to be deposited. |
| 1 | Tax deductible in March | 30th APRIL NEXT FINANCIAL YEAR |
| 2 | Tax deductible in any other month | 7TH DAY NEXT MONTH |
| 3 | Tax on perquisites opt to be deposited by the employer | 7TH DAY NEXT MONTH |
However, if a DDO applies before the jurisdictional Additional/Joint Commissioner of Income Tax to permit quarterly payments of TDS under section 192, the Rule 30(3) allow for payments on quarterly basis and time given in Table below:
| Sl. No. | Quarter to the financial year ended on | Date for quarterly payment |
| 1 | 30th June | 7th July |
| 2 | 30th September | 7th October |
| 3 | 31st December | 7th January |
| 4 | 31st March | 30th April next Financial Year |
If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time as under:
He shall be liable to action in accordance with the provisions of section 201. Section 201(1A) lays down that such person shall be liable to pay simple interest
(i) at 1% for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted and
(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.
Such interest, if chargeable, is mandatory in nature and has to be paid before furnishing of quarterly statement of TDS for respective quarter.
Penalty Provision:
Section 271C says that if any person fails to deduct whole or any part of tax at source or fails to pay the whole or part of tax deducted, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted or paid by him.
Further, section 276B says that if a person fails to pay to the credit of the Central Government within the prescribed time, as above, the tax deducted at source by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along fine.