TDS on Commission

The commssion paid to employee is his salary income . As per provisions of section 192 TDS is to be made on the average estimataed income. The section 192 states as under 192. 11(1) Any person responsible for paying any income chargeable under the head “Salaries” shall, at the time of payment, deduct income-tax 12[***] on the amount payable at the average rate of income-tax 13[***] computed on the basis of the 14[rates in force] for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year. However note the following circular: Adjustment of excess deduction - Excess payment (difference between the actual payment made by the deductor and the tax deducted at source or that deductible, whichever is more) can be refunded, independently of the Income-tax Act, to the person responsible for making such payment subject to necessary administrative safeguards. This amount should be adjusted against the existing tax liability under any of the Direct Tax Acts. After meeting such liability the balance amount, if any, should be refunded to the assessee.—Circular : No. 285 [F. No. 275/77/79-IT(B)], dated 21-10-1980