CBDT issued clarification regrading Tax Regime
Tax regime

Employer should ask from employee which tax regime they want to opt: TDS on Salary

2 minutes, 3 seconds Read

SYNOPSIS: Employee needs to intimate his employer, which regime they want to opt. If intimation not made to employer, then the new tax regime will be default tax regime. 

The Income Tax Department has clarified that employer should ask from his/her employee which regime they want to opt in the current financial year 2023-24 and deduct TDS accordingly. If employee does not inform his/her employer about the preferred regime, then employer will deduct the TDS as per the new regime announced in budget 23-24.

Individual Taxpayer have two options (Tax Regime)

  1. Old Regime
  2. New Regime

The individual taxpayers have options to select which regime they want i.e. the old or new regime. Under the old one exemptions and deductions are allowed however the new one which offers low tax rates but no exemptions and deductions.

How to Link Aadhar With PAN With Penalty Rs. 1000

SYNOPSIS: Link Aadhar with Pan by Paying penalty of Rs. 1,000. Pan and Aadhar linking date extended. Linking Aadhar with PAN is now mandatory as per the Section 139AA of the Income Tax Act, if you have not linked yet now then still you have a chance to link pan with…

The Budget 2023-24 has announced that new regime as default one under section 115BAC of the IT Act, 1961. However the individual tax payers have option to switch from old to new.

On 5th April, Wednesday the Central Board of Direct Taxes (CBDT) has issued clarification at which rates TDS will bed deducted by the employer.

This option will provide relief to the taxpayers that, they can estimate tax liability and on that basis they can choose which is more beneficial tax regime and accordingly intimate to the employer to deduct tds.

So if you are a working professional then you should approach your employer and select the most suitable option for you.

This clarification was issued via circular No. 04 of 2023

Read this also…

UPI Transaction Limit: What is UPI? UPI FAQs

UPI Transaction Limit: UPI (Unified Payments Interface) is a real-time payment system developed by the National Payments Corporation of India (NPCI). It allows for instant fund transfer between two bank accounts on a mobile platform. It is built on top of the Immediate Payment Service (IMPS) and uses a virtual payment address (VPA) as the…

The CBDT Stated that:

Representations have been received expressing concerns regarding tax to be deducted at source (TDS) on salary income of a person under section 192 of the Act as the deductor, being an employer, would not know if the person, being an employee, would opt out from taxation under sub-section (1 A) of section 115BAC of the Act or not.

In order to avoid the genuine hardship in such cases, the Board, in exercise of powers conferred under section 119 of the Act, hereby directs that a deductor, being an employer, shall seek information from each of its employees having income under section 192 of the Act regarding their intended tax regime and each such employee shall intimate the same to the deductor, being his employer, regarding his intended tax regime for each year and upon intimation, the deductor shall compute his total income, and deduct tax at source thereon according to the option exercised.

Anup Singh

Anup Singh

CA Student - Having more than 5 years of experience in CA firms in the field of Accounts, Income Tax, GST, Corporate Law. Innovator | Quick Learner | Ready to start .....

Similar Posts

Leave a Reply