Quick Summary
The Central Board of Direct Taxes (CBDT) has released Circular No. 3/2025, detailing the income tax deduction from salaries under Section 192 of the Income Tax Act, 1961, for the financial year 2024-25. This circular outlines amendments introduced through the Finance (No. 2) Act, 2024, Finance (No. 1) Act, 2024, and Finance Act, 2023 that impact tax deduction at source (TDS) for salaried employees. Key Highlights of the Circular 1. Taxation of Salary and Perquisites Salary Definition: As
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FAQ :
The circular details income tax deductions from salaries under Section 192 for the financial year 2024-25, incorporating amendments from recent Finance Acts.
Contributions made by the Central Government to the Agniveer Corpus Fund under the Agnipath Scheme are now included as part of salary as per Section 17(1).
Surcharge rates range from 10% for income between Rs 50 lakh - Rs 1 crore, up to 37% for income above Rs 5 crore (excluding certain capital gains).
No, the income tax slabs and the rebate under Section 87A (for income up to Rs 7 lakh) remain the same for the New Tax Regime (Section 115BAC) for Assessment Year 2025-26.
Failure to deduct TDS can attract penalties under Section 271C, and non-payment of deducted tax may lead to rigorous imprisonment and fines under Section 276B.
Non-government employees can now claim an exemption of up to Rs 25 lakh on leave encashment at the time of retirement.
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