CBDT clarifies employer’s TDS obligation under new ‘default’ personal tax regime
CBDT, vide Circular No. 4/2023 dated 05.04.2023, issues clarification regarding employer’s TDS liability on salary in the light of new default personal tax regime introduced by the Finance Act, 2023 under Section 115BAC(1A); CBDT directs that an employer, shall seek information from each of its employees having income under Section 192 regarding their intended tax regime and each such employee shall intimate the same to his employer for each year and upon intimation, the employer shall compute the employee’s total income and deduct tax at source according to the option exercised; Clarifies that in the absence of intimation by the employee, it shall be presumed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime; Thus, the employer shall deduct tax at source, on income under section 192 in accordance with the rates provided under 115BAC(1A); Further clarifies that employee’s intimation would not amount to exercising option in terms of Section 115BAC(6) and the person shall be required to do so separately in accordance with law; This Circular is applicable for TDS during FY 2023-24 and subsequent years.
The copy of the notification is as under:
