TDS Deposit rules for Salaried Employers relaxed from 1st Oct; Know More

In a big relief to employers, the Centre has eased the restrictions for companies to deposit Tax Deducted at Source (TDS) on employee’s salaries. Employers will have extra time to deduct Tax Deducted at Source (TDS) from their employees’ salaries beginning October 1, 2024. The updated rule gives companies more time to submit TDS filings to the government beginning October 1.

TDS, or Tax Deduction at Source, is the amount that employers subtract from employees’ salaries and pay to the government. According to the Income Tax Act, employers must deduct TDS from salary income based on the applicable slab rates. In general, the due date for depositing TDS is the 7th of each month, which is the month following it is deducted from the employee’s salary.

How much Tax to Pay?

Beginning October 1, 2024, employers will have an extended period to deduct Tax Deducted at Source (TDS) from employees’ salary. The revised rules allow companies to deposit TDS up until the deadline for filing TDS returns, giving them an extra 20 days over the prior timeframe.

Previously, businesses had 60 days to deposit TDS before being notified of a default. However, with the amended standards, companies can now submit TDS deposits before the TDS return filing deadline, avoiding fines.

TDS norms have recently changed, allowing firms to submit TDS payments to the government on longer deadlines. This change benefits companies while protecting employees’ TDS credits. However, if the deducted taxes are not deposited by the required date, the income tax department may issue a prosecution notice to the companies for failing to file the TDS return on time.

What will happen if an employer doesn’t pay TDS?

Employees cannot claim TDS credit if the employer deducts TDS but fails to deposit it. In such cases, Section 205 of the Income Tax Act protects employees against double taxation, provided they can prove the TDS deduction from their income.

To claim TDS credit and avoid further tax liabilities, individuals must provide evidence to the income tax department demonstrating that tax has been deducted from their salary.