Is there one document that tells the payroll department how to deduct on salary for the year?
Yes. The Board issues an annual circular under s.192 and this is the one for financial year 2024-25. It consolidates the rates, the amendments made by the Finance Acts of 2023 and 2024, and the mechanics of the employer's deduction, and states that where no amendment has been made the position in the earlier circular for financial year 2022-23 continues.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) on 2025-02-20, reported as Circular No. 3/2025; F. No. 275/107/2024-IT(B), dated 20 February 2025. It bears on section 192, section 192(2B), section 115BAC, section 10(10AA) of the Income Tax Act 1961, in TDS Defaults and Salary & Perquisites matters.
In a s.201 proceeding the officer works from this circular, and so should the employer: it is the document that shows what the payroll department was told to do for the year in question. It is also the reference for the employee-side declarations - other income under s.192(2B), and the evidence of claims that Rule 26C requires in Form No. 12BB.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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The Board issues a circular each year setting out how tax is to be deducted from salaries for that financial year. This circular, issued on 20 February 2025 for financial year 2024-25, incorporates the amendments made by the Finance (No. 2) Act, 2024, the Finance Act, 2024 and the Finance Act, 2023, and reproduces the relevant provisions of s.192 including sub-section (2B) and its proviso. The corroborating notes record that it also covers the revised surcharge and slab positions, the changes to Form No. 16 and Form No. 24Q, and the leave encashment exemption limit.
Not a decision. The circular states the rates and the method of deduction for the year and provides that where no amendment has been made, the provisions of Circular No. 24/2022 for financial year 2022-23 continue to apply.
Not applicable - this is a departmental circular issued under s.192, not an adjudication.
Provided that this sub-section shall not in any case have the effect of reducing the tax deductible from income under the head "Salaries", except where the loss under the head "Income from house property" and the tax deducted in accordance with other provisions of Part B and tax collected in accordance with the provisions of Part BB of this Chapter, has been taken into account.
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Handle my notice → Ask a CA on WhatsAppYes. The Board issues an annual circular under s.192 and this is the one for financial year 2024-25. It consolidates the rates, the amendments made by the Finance Acts of 2023 and 2024, and the mechanics of the employer's deduction, and states that where no amendment has been made the position in the earlier circular for financial year 2022-23 continues. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) and bears on section 192, section 192(2B), section 115BAC, section 10(10AA) of the Income Tax Act 1961. It is reported as Circular No. 3/2025; F. No. 275/107/2024-IT(B), dated 20 February 2025. In a s.201 proceeding the officer works from this circular, and so should the employer: it is the document that shows what the payroll department was told to do for the year in question. It is also the reference for the employee-side declarations - other income under s.192(2B), and the evidence of claims that Rule 26C requires in Form No. 12BB. If it applies to you, the first step is this: Pull the circular for the financial year you are defending, not the current one, since the rates and the amendments change every year.
The Board issues a circular each year setting out how tax is to be deducted from salaries for that financial year. This circular, issued on 20 February 2025 for financial year 2024-25, incorporates the amendments made by the Finance (No. 2) Act, 2024, the Finance Act, 2024 and the Finance Act, 2023, and reproduces the relevant provisions of s.192 including sub-section (2B) and its proviso. The corroborating notes record that it also covers the revised surcharge and slab positions, the changes to Form No. 16 and Form No. 24Q, and the leave encashment exemption limit. The matter was decided on 2025-02-20 by the CBDT Circulars & Instructions (Central Board of Direct Taxes). On those facts the CBDT Circulars & Instructions held as follows. Not a decision. The circular states the rates and the method of deduction for the year and provides that where no amendment has been made, the provisions of Circular No. 24/2022 for financial year 2022-23 continue to apply.
Not applicable - this is a departmental circular issued under s.192, not an adjudication. In the words reproduced by the source cited on this page: "Provided that this sub-section shall not in any case have the effect of reducing the tax deductible from income under the head "Salaries", except where the loss under the head "Income from house property" and the tax deducted in accordance with other provisions of Part B and tax collected in accordance with the provisions of Part BB of this Chapter, has been taken into account."
It was decided by the CBDT Circulars & Instructions on 2025-02-20 and is reported as Circular No. 3/2025; F. No. 275/107/2024-IT(B), dated 20 February 2025. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 192, section 192(2B), section 115BAC, section 10(10AA), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Not a decision. The circular states the rates and the method of deduction for the year and provides that where no amendment has been made, the provisions of Circular No. 24/2022 for financial year 2022-23 continue to apply. It arises in TDS Defaults and Salary & Perquisites matters, on section 192, section 192(2B), section 115BAC, section 10(10AA) of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Check the employer's file against it for the two employee declarations: other income under s.192(2B) and the Form No. 12BB evidence under Rule 26C. Where the employee had a second employer in the year, ask for the Form No. 12B particulars under Rule 26A before finalising the estimate. Read it with the earlier circular it preserves, because unamended paragraphs are not repeated.
Still good law. The circular governs financial year 2024-25 only; a later circular governs each later year. Nothing on the pages fetched records its withdrawal or modification. That finding was checked against a published source, which is linked on this page, on 2026-08-20. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The quoted sentence is not language the Board wrote: it is the reproduction of the proviso to s.192(2B) that the circular sets out, quoted here because it is the limit on what an employee's declaration of other income can do. The circular's own guidance paragraphs - salary from more than one employer, Form No. 12BB, and intimation of the regime option to the employer - could not be extracted from the PDF as fetched and are not quoted here; what this entry records of the circular's coverage beyond the number, the F. No., the date and the s.192(2B) extract comes from the two corroborating pages. Neither of those pages mentions s.115BAC or s.10(10AA), so those two entries in sections rest on the PDF alone. CAclubindia gives the date as 21 February 2025; the PDF itself says 20 February 2025 and that date has been used. The circular's own guidance on salary from more than one employer, on Form No. 12BB and on how an employee intimates the choice of regime to the employer is not recorded here, and neither are the rate tables. Nothing quoted here is the Board's own language. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Not a decision. The circular states the rates and the method of deduction for the year and provides that where no amendment has been made, the provisions of Circular No. 24/2022 for financial year 2022-23 continue to apply.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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