Form 24Q - TDS on Salary

t JuroLegal, we help employers and organizations accurately prepare and file Form 24Q, which reports Tax Deducted at Source (TDS) on salary payments under Section 192 of the Income Tax Act, 1961. Our experts handle every aspect of the process — from employee-wise salary breakup validation, computation of TDS, challan preparation, and quarterly return filing to Form 16 generation and correction of defaults, if any. We ensure your filings are timely, accurate, and fully compliant with the latest CBDT and TRACES portal guidelines. Whether you manage a small business or a large enterprise, JuroLegal provides end-to-end support for TDS on salary compliance, minimizing the risk of penalties and ensuring a smooth experience for both employers and employees.

 

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  • Form 24Q is a specific type of TDS (Tax Deducted at Source) return form used in India. It is instrumental in reporting critical details related to salary payments and the TDS deductions from employee salaries.  Now the question arises: Who can deduct TDS on salaries?

    TDS is deducted by employers who make salary payments to their employees. However, if the employee’s total income is up to Rs. 5,00,000/-, TDS is not required to be deducted.

     

    Specifically, the below entities are liable to deduct TDS on salaries:

     

    • Companies and Organizations

    Private companies, government organizations, non-profit entities, and other institutions are responsible for deducting the TDS from the salaries they pay to their employees.

     

    • Individuals

    Sometimes, individuals who are not employers but pay employees or professionals can also be responsible for deducting TDS on salaries.

     

    • HUFs (Hindu Undivided Families)

    Hindu Undivided Families (HUFs), if they have individuals on their payroll and make salary payments to them.

     

    • Partnership Firms

    Partnership firms that have employees on their payroll are also obligated to deduct TDS.

The Tax Deducted at Source (TDS) rate on salary in India for the assessment year 2024-2025 depends on the individual’s income and applicable tax slabs as per the Income Tax Act. The TDS on salary is deducted as per the income tax rates applicable to the individual, which are outlined in the annual budget.

Income Tax Slabs for Assessment Year 2024-2025

For individuals below 60 years of age, the income tax slabs for the assessment year 2024-2025 under the old tax regime are:

– Income up to ₹2,50,000: No tax

– Income from ₹2,50,001 to ₹5,00,000: 5% of income exceeding ₹2,50,000

– Income from ₹5,00,001 to ₹10,00,000: 20% of income exceeding ₹5,00,000 + ₹12,500

– Income above ₹10,00,000: 30% of income exceeding ₹10,00,000 + ₹1,12,500

 New Tax Regime (Optional)

For individuals opting for the new tax regime without deductions and exemptions, the income tax slabs are:

– Income up to ₹2,50,000: No tax

– Income from ₹2,50,001 to ₹5,00,000: 5% of income exceeding ₹2,50,000

– Income from ₹5,00,001 to ₹7,50,000: 10% of income exceeding ₹5,00,000 + ₹12,500

– Income from ₹7,50,001 to ₹10,00,000: 15% of income exceeding ₹7,50,000 + ₹37,500

– Income from ₹10,00,001 to ₹12,50,000: 20% of income exceeding ₹10,00,000 + ₹75,000

– Income from ₹12,50,001 to ₹15,00,000: 25% of income exceeding ₹12,50,000 + ₹1,25,000

– Income above ₹15,00,000: 30% of income exceeding ₹15,00,000 + ₹1,87,500

Additional Considerations

  1. Rebate under Section 87A: Individuals with income up to ₹5,00,000 can avail a rebate under Section 87A, reducing their tax liability to zero.
  2. Surcharge: Applicable on income exceeding ₹50 lakh at varying rates.
  3. Health and Education Cess: An additional 4% on the tax amount (including surcharge, if applicable).

 TDS Calculation

Employers are required to deduct TDS on salary at the average rate of income tax applicable to the employee, calculated based on the estimated income of the employee for the financial year. The formula is:

  1. Estimate the employee’s total annual income (including salary, bonuses, and other taxable income).
  2. Calculate the tax liability based on the applicable tax slabs.
  3. Divide the total tax liability by the number of months of employment in the financial year to determine the monthly TDS amount.
  4. Deduct TDS monthly from the employee’s salary.

Example Calculation

For an employee earning ₹10,00,000 annually under the old tax regime:

  1. Income up to ₹2,50,000: No tax
  2. Income from ₹2,50,001 to ₹5,00,000: 5% of ₹2,50,000 = ₹12,500
  3. Income from ₹5,00,001 to ₹10,00,000: 20% of ₹5,00,000 = ₹1,00,000

Total tax: ₹12,500 + ₹1,00,000 = ₹1,12,500

Add 4% health and education cess: 4% of ₹1,12,500 = ₹4,500

Total tax liability: ₹1,12,500 + ₹4,500 = ₹1,17,000

Monthly TDS: ₹1,17,000 / 12 = ₹9,750

This is a simplified example and actual TDS calculations may vary based on deductions, exemptions, and other factors.

  • For Quarter 1 (April to June): Due date is typically July 31st.
  • For Quarter 2 (July to September): Due date is typically October 31st.
  • For Quarter 3 (October to December): Due date is typically January 31st.
  • For Quarter 4 (January to March): Due date is typically May 31st of the following financial year.
  • Interest:
    • If TDS is not deducted, interest is charged at 1% per month from the due date of deduction to the actual date of deduction.
    • If TDS is not deposited, interest is charged at 1.5% per month from the actual date of deduction to the actual date of payment.
  • Late Filing Fees (Section 234E):
    • A fine of Rs. 200 per day is applicable until the return is filed.
    • This amount must be paid for each day until the total fine equals the TDS amount.
  • Additional Penalty (Section 271H):

The Assessing Officer (AO) may charge a penalty of minimum Rs. 10,000 and maximum Rs. 1,00,000.