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EMPLOYEE WITHHOLDING TAXES

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nagendra

sr accountant

22 Points Posted on 01 April 2020

Hi,

Need help, Pl advise , with respect to new budget changes for the AY 21-22, as you aware there is two different tax regime, further I need clarity on employer responsibility on withholding taxes of the employees during payroll process . further should we need to deduct withholding with only old tax regime by not providing option to employees during their IT declaration, or should we need to provide option to employees to select old or new.

my query raised by referring sec 192 and 115BAC.

please sugguest.

regards

Nagendra

Replies (4)

Quick Summary

This discussion addresses employer responsibilities regarding employee withholding taxes following the AY 21-22 budget changes, which introduced two tax regimes. The core question is whether employers should mandate the old tax regime or allow employees to choose between the old and new options during their IT declarations. While some suggest it's the employee's decision, others point to Section 192 and CBDT circulars which clarify that employers must deduct TDS using the old method unless the employee explicitly opts for the new regime.

RAJA P M

"Do the Right Thing...!!!"

77792 Points Posted on 01 April 2020

As per my view.,

The selection of Old or New Tax filing matter will be Assessee's own decisions. It can't be choose by employer...
Better to consider with employee and his details which is suitable for employee...

Wait on others view...

Mandakulathur Ananthanarayanan

114 Points Posted on 07 April 2020

Usually, CBDT will come out with a circular determining the way to deduct taxes every year. This being an option that can be exercised at the time of filing return, CBDT will come out with a circular on the same. Till that the emplyer can deduct tds safely by following old method unless the employee mention his option to the employer otherwise

Sujit Talukder

service

493 Points Posted on 07 April 2020

An employer has no option but has to mandatorily deduct TDS as per section 192 which prescribes only the old method of taxation even though an employee decides to go for the new tax regime.

Strange but true, this is how the law is prescribed.

Read this

https://www.taxcorner.co.in/2020/02/section-115bac-option-of-new-tax-to-employee-and-tds-by-employer.H T M L

Sujit Talukder

service

493 Points Posted on 13 April 2020

CBDT issued a detailed Circular clarifying the process of exercising of option by a taxpayer with regard to deduction of tax at source if he/she opts for the concessional rates of tax as per section 115BAC of IT Act,1961

https://www.taxcorner.co.in/2020/04/cbdt-issues-circular-to-clarify-option-under-section-115bac-and-tds-by-employer.H T M L