. TDS on Salary from Multiple Employers:

• If an employee receives salary from multiple employers, one employer can be designated as the “primary” employer. This employer income tax can then deduct TDS on the aggregate salary (including salary from other employers) based on an estimate provided by the employee.
• This option is available under Section 192(2)(b) of the Income Tax Act.

2. TDS on Pension and Retirement Benefits:

• Employers can deduct TDS on pension and other retirement benefits paid to their employees.
• This is covered under Section 192(1)(a) of the Income Tax Act.

3. Professional Tax:

• Some employers might pay professional tax on behalf of their employees. In such cases, the professional tax amount would be included in the employee’s income as a perquisite and taxed accordingly.
• This is not technically TDS, but it affects the employee’s tax liability.

4. TDS on Non-Salary Payments:

• If an employer makes certain non-salary payments to an employee, such as commission, fees, or rent, they may be required to deduct TDS under specific sections of the Income Tax Act.
• These sections may include Section 194C, 194D, 194G, 194H, etc., depending on the nature of the payment.

It is important to remember that the income tax responsibility for paying taxes on other income sources ultimately lies with the individual employee. They must declare all their income sources and pay taxes accordingly, regardless of any deductions made by the employer.

 EXAMPLE

Here are some examples of other income that may be subject to tax deduction at source (TDS):

• Interest income
• Dividend income
• Rental income
• Capital gains
• Professional fees

The specific rules for TDS on other income can vary depending on the type of income and the state in income tax which the employee is employed.

Here are some specific examples of how TDS on other income might work in different states in India:

• In Karnataka: An employer can deduct TDS on interest income exceeding Rs. 10,000 in a financial year.
• In Kerala: An employer can deduct TDS on dividend income exceeding Rs. 5,000 in a financial year.
• In Maharashtra: An employer can deduct TDS on rental income exceeding Rs. 2,500 per month.
• In Tamil Nadu: An employer can deduct TDS on professional fees exceeding Rs. 20,000 in a financial year.

It is important for employees to keep income tax track of their other income and inform their employer of any changes so that the correct amount of tax can be deducted. Employees can also claim credit for TDS deducted at source when they file their income tax returns.

Here are some additional points to keep in mind:

• Employers are not obligated to income tax deduct TDS on other income if the employee’s total income (including salary and other income) is below the basic exemption limit.
• Employees can submit Form 15G or Form 15H to their employer to request income tax them not to deduct TDS on their other income if their total income is below the basic exemption limit.
• Employees can claim credit for TDS income tax deducted at source when they file their income tax returns.

For more information on TDS on other income, employees can consult a tax professional or visit the website of the Income Tax Department of India.

FAQ QUESTIONS

No, an employer generally cannot deduct tax on other incomes of an employee under income tax. This is because the employer’s responsibility for tax deduction at source (TDS) is limited to the salary paid by them to the employee.

However, there are two specific situations where an employer may be required to deduct tax on other incomes:

1. Employee has income from more than one employer:

• If an employee receives salary from multiple employers, the current/chosen employer can deduct tax at source on the income tax aggregate salary (including salary from previous or other employers) based on the employee’s tax regime (old or new).
• This requires the employee to submit Form 12B to the chosen employer, providing details of all salary income earned in the year.

2. Professional Tax Paid by Employer:

• If the employer pays professional tax on behalf of the income tax employee, it becomes a perquisite and is first added to the employee’s total income.
• The employer then deducts TDS on this total income, including the professional tax.

In all other cases, the employer cannot deduct tax on other income sources of the employee, such as:

• Business income
• House property income
• Capital gains
• Agricultural income

Here are some additional points to remember:

• The employee income tax is responsible for paying tax on their total income from all sources, including salary and other income.
• The employee can claim tax deductions income tax and exemptions available for their other income sources while filing their income tax return.
• If the employer deducts tax on other income sources without authorization, the employee can claim a refund from the income tax department.

CASE LAWS

No, an employer income tax generally cannot deduct tax on other incomes of an employee under income tax. This is because the employer’s responsibility for tax deduction at source (TDS) is limited to the salary paid by them to the employee.

However, there are two specific situations where an employer may be required to deduct tax on other incomes:

1. Employee has income from more than one employer:

• If an employee receives salary from multiple employers, the current/chosen employer can deduct tax at source on the income tax aggregate salary (including salary from previous or other employers) based on the employee’s tax regime (old or new).
• This requires the employee to submit Form 12B to the chosen employer, providing details of all salary income earned in the year.

2. Professional Tax Paid by Employer:

• If the employer pays professional tax on behalf of the employee, it becomes income tax a perquisite and is first added to the employee’s total income.
• The employer then deducts TDS on this total income, including the professional tax.

In all other cases, the employer cannot deduct income tax on other income sources of the employee, such as:

• Business income
• House property income
• Capital gains
• Agricultural income

Here are some additional points to remember:

• The employee is responsible for paying tax on their total income tax from all sources, including salary and other income.
• The employee can claim tax income tax deductions and exemptions available for their other income sources while filing their income tax return.
• If the employer deducts tax on other income sources without authorization, the employee can claim a refund from the income tax department.

Section 192(1C) of the Income Tax Act deals with the taxability of certain perquisites provided by an employer to its employees. It states that the value of certain perquisites shall be deemed to be income chargeable to tax under the head “Salaries”.

Here are the particulars of perquisites covered under Section income tax 192(1C):

• Free accommodation: This includes the value of any accommodation provided by the employer to the employee, rent-free or at a concessional rent.
• Free meals: This includes the value of any meals provided by the employer to the employee, free of cost or at a subsidized rate.
• Free transportation: This includes the value of any transportation facility provided by the employer to the employee, free of cost or at a subsidized rate.
• Free medical treatment: This includes the value of any medical treatment provided by the employer to the employee, free of cost or at a subsidized rate.
• Free education: This includes the value of any education facility provided by the employer to the employee or his/her children, free of cost or at a subsidized rate.

Important Points to Note:

• The value of these perquisites is determined as per the rules prescribed by the Income Tax Act.
• The employer is required to deduct tax at source (TDS) on the value of such perquisites at the time of payment or provision of the perquisite.
• The employee can claim a deduction for the actual expenditure incurred on rent, medical treatment, and education, subject to certain conditions.

For further details, refer to the following resources:

• Income Tax Act, 1961 – Section 192(1C)
• Income Tax Rules, 1962 – Rule 3(1A)
• Central Board of Direct Taxes (CBDT) Circulars and Notifications

Additionally, here are some points to consider:

• Section 192(1C) income tax is intended to prevent employers from providing tax-free benefits to their employees.
• The provisions of this section can be complex, so it is advisable to consult with a tax professional for assistance.
• There are some specific exemptions and exceptions to the provisions of Section 192(1C) income tax.