MOST IMPORTANT - Non-Deduction of Tax at Source (TDS) on Salary Payments
1. It has come to the notice of the undersigned that several Drawing and Disbursing Officers (DDOs) working under the State Government of Karnataka are not deducting Tax at Source (TDS) from salary payments exceeding the taxable limit, as mandated under Section 192 of the Income Tax Act, 1961.
2. As per the provisions of the Income-tax Act, any person responsible for paying salary is required to deduct income tax at the time of payment, based on the estimated income of the employee for the financial year. For better understanding. the complete process is explained here under:
3.1 RESPONSIBILITIES OF DDOS:
1. TAX DEDUCTION AT SOURCE (TDS) & REMITTANCE:
It is the responsibility of the DDOs that at the time of making salary payments to their employees, he needs to estimate the salary income of their employees for entire year at the beginning of year & compute the tax on the basis of rates in force applying the slab of income average rate of tax Divide it by 12 and deduct the amount every month and remit the same to the Central Government Account within the due dates.
2. FILING OF TDS RETURNS:
It is also the responsibility of the DDOs that TDS return in Form 24Q with accurate details has to be filed on quarterly basis. The due dates for filing Form 24Q are as under:
3. ISSUANCE OF TDS CERTIFICATES:
It is the responsibility of the DDOs that TDS Certificate in Form 16 has to be issued annually to each employee by the 15th June of following financial year.
3.2 CONSEQUENCES FOR NON-COMPLIANCE:
The DDO shall be deemed to be in default in respect of Non deduction of tax at source and Non-payment, in whole or in part, of the tax deducted.
1. INTEREST LEVIED U/S 201(1A):
In case of non-deduction of tax at source, either in whole or part, simple interest @1% for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted.
2. PENALTY FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 271C:
In case of non-deduction of tax at source, the person responsible shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay to the government account.
3. PENALTY FOR FAILURE TO FURNISH STATEMENTS U/S 271H:
If a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; a penalty shall be a sum which shall not be less than Rs 10,000/- but which may extend to Rs 1,00,000/-.
4. PENALTY FOR FAILURE TO ISSUE TDS CERTIFICATES U/S 272A(2):
If a person fails to deliver or cause to be delivered a copy of statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; he shall pay, by way of penalty, a sum of Rs 500/- for every day during which the failure continues.
For better understanding of responsibilities and consequences in non-compliance, one example is coated hereunder:
1. Let us consider, 1 employee having salary income of Rs. 15 lakh annually in FY 2025-26. So, after allowing the standard deduction of Rs.75,000/-, TDS needs to be calculated and deducted on the balance income of Rs. 14,25,000/-, which is as under:
4. This may be treated as urgent and important. This may be circulated amongst all the DDOs under government of Karnataka.
5. To ensure compliance with income tax laws and to avoid any adverse legal or financial implications for the government or the concerned officers, the DDOs may be instructed as under.
1. Review salary payments made during the current financial year.
2. Ensure TDS is correctly calculated and deducted wherever applicable.
3. Remit the TDS to the government account within the prescribed timelines.
4. File accurate TDS returns in Form 24Q on a quarterly basis.
6. Further, the DDOs may contact to the Customer Care through Helpline number 18001030344 or 01204814600 for any query related to TDS matter.
