If you are a salaried professional employee and your TDS is deducted, then this news is useful for you. Because the Central Board of Direct Taxes has given clarification on TDS (Tax Deducted at Source) .
Since the new tax regime has become the default tax regime from FY 2023-24, it has become important for employees to inform their employers about their choice of tax regime.
According to the Central Board of Direct Taxes (CBDT), if an employee fails to inform about his choice, the employer can deduct TDS on salary under section 192 as per the new tax regime rates.
CBDT’s clarification in circular CBDT
in a circular dated April 5 said that if an employee does not inform about his choice of tax regime, the employer shall deduct TDS from the salary as per the rates prescribed for the default regime, i.e. the new tax regime. Could.
The Central Board of Direct Taxes said, “If the information is not given by the employee, it will be deemed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime. Therefore in such a case the employer shall deduct TDS at the rates provided under sub-section (lA) of section 115BAC on the income under section 192 of the Act.
Information sought from company employees
CBDT has asked employers to seek information from employees about the option of tax regime. If the employee fails to intimate the same, it will be presumed that the employee is in default regime (new tax regime) and TDS under section 192 will be deducted as per the new regime rates.
The CBDT said, “Salaried employees can opt to opt out of the new tax regime every year to avail various deductions available under the old tax regime. The new tax regime is the default tax regime applicable to all individuals. However, under sub-section (6) of section 115BAC of the Act, a person can exercise an option to opt out of this tax regime. A person who does not have income from business or profession can exercise this option every year.
