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Section 192 (Now Section 392): TDS on Salary Under the Income Tax Act, 2025
Section 192 of the Income Tax Act, 1961 has been replaced by Section 392 of the Income Tax Act, 2025, effective April 1, 2026. Section 392 governs Tax Deducted at Source (TDS) on salary. The basic method of calculating salary TDS remains largely the same, but the new law introduces updated reporting codes, revised forms, and the tax-year concept.
If you receive a monthly salary, you may have noticed TDS under Section 192 on your salary slip or Form 16 ( Now Form 130 ). However, under the Income Tax Act, 2025, TDS on salary is now governed by Section 392.
The change became effective on April 1, 2026. Salary payments made up to March 31, 2026 fall under Section 192 of the Income Tax Act, 1961, while salary payments from April 1, 2026 are governed by Section 392 of the new Act.
Does this mean employers will deduct more tax from salary?
Not necessarily. The fundamental principle remains the same: employers estimate an employee's annual taxable income, calculate the applicable income tax, and deduct TDS during salary payments.
If you want to estimate your tax liability based on your income before understanding how much TDS may be deducted during the year, you can use the Easy Return income tax calculator.
This guide explains what changed from Section 192 to Section 392, how salary TDS is calculated, applicable tax slabs, payment codes 1001–1003, revised TDS forms, employer responsibilities, and employee declarations.
It also explains what happens when excess TDS is deducted and how salaried employees can claim a refund.
Need help with salary TDS or income tax filing? Easy Return can help review your salary income, deductions, and tax filing requirements.
Section 192 Replaced by Section 392: What Changed and When?
The Income Tax Act, 2025 introduced a simplified structure for India's income tax provisions. Several provisions from the Income Tax Act, 1961 have been reorganized and renumbered.
One important change concerns TDS on salary.
Previously, employers deducted tax from salary under Section 192. From April 1, 2026, the corresponding provision is Section 392.
The change primarily affects legal references, compliance procedures, and reporting forms. It does not automatically increase the income tax payable by salaried employees.
What Is Section 192 of the Income Tax Act?
Section 192 of the Income Tax Act, 1961 required employers or persons responsible for paying taxable salary to deduct income tax at the time of salary payment.
The deduction was based on the employee's estimated annual taxable salary and the applicable income tax slab rates.
Section 192 applied to salary payments made before April 1, 2026.
Unlike TDS on certain other payments, salary TDS was not deducted at a single fixed percentage. The amount depended on the employee's estimated tax liability for the financial year.
What Is Section 392 of the Income Tax Act 2025?
Section 392 of the Income Tax Act, 2025 governs TDS on income chargeable under the head "Salaries."
Under this provision, employers estimate an employee's annual taxable income and deduct income tax at the applicable average rate when making salary payments.
Section 392 also covers related salary declarations, TDS adjustments, and certain accumulated provident fund payments.
The associated procedures and forms are prescribed under the Income-tax Rules, 2026.
Income Tax Act 2025 Effective Date and Transition Timeline
The transition from the old Income Tax Act to the new framework can be understood through the following timeline.
| Period | Important Development |
|---|---|
| 2025 | Income-tax Bill, 2025 introduced |
| 2025 | New income tax legislation approved and enacted |
| March 31, 2026 | Last day of FY 2025-26 under the earlier framework |
| April 1, 2026 | Income Tax Act, 2025 becomes effective |
| Tax Year 2026-27 | First tax year under the new Act |
For salaried employees, April 1, 2026 is the key date for understanding whether Section 192 or Section 392 applies to a salary payment.
Is Section 192 Still Applicable?
Yes, Section 192 remains relevant for salary payments and tax matters relating to earlier financial years.
Salary TDS was governed by Section 192.
Salary TDS is governed by Section 392.
Section 192 may still appear in older salary slips, Form 16 ( Now Form 130 ) certificates, TDS returns, income tax assessments, and other records relating to earlier years.
Therefore, employees filing their income tax returns for FY 2025-26 should not be confused if their employer's documents refer to Section 192.
Tax Year Replaces Assessment Year
The Income Tax Act, 2025 introduces the concept of a single tax year, replacing the earlier distinction between previous year and assessment year for periods governed by the new Act.
Under the older system, income earned during FY 2025-26 was associated with Assessment Year 2026-27.
Under the new system, income earned from April 1, 2026 to March 31, 2027 is identified as Tax Year 2026-27.
This simplifies year references in income tax calculations, returns, and related documentation.
How TDS on Salary Is Calculated Under Section 392
TDS on salary under Section 392 is calculated using the employee's estimated taxable income for the tax year.
There is no universal fixed TDS rate of 10% or 20% for salaried employees. Employers calculate TDS by applying the relevant income tax slab rates and considering eligible deductions, exemptions, rebates, and other applicable tax provisions.
What Counts as Salary for TDS?
Salary income generally includes the taxable value of the following components:
- Basic salary
- Dearness Allowance (DA)
- House Rent Allowance (HRA), to the extent taxable
- Special allowances
- Bonus and incentives
- Commission
- Overtime payments
- Taxable leave encashment
- Taxable gratuity
- Perquisites and profits in lieu of salary
- Salary arrears
- Advance salary
Certain payments may qualify for exemptions or deductions, depending on the nature of the income and the tax regime selected.
For example, eligible employees under the old tax regime may claim HRA exemption if the prescribed conditions are satisfied.
Average Rate of Income Tax on Salary
Under Section 392, employers calculate salary TDS using the average rate of income tax on the employee's estimated annual salary income.
To calculate the approximate monthly deduction:
If an employee's estimated annual income tax liability is ₹62,400 and the amount is to be deducted equally over 12 months:
Monthly TDS = ₹62,400 ÷ 12 = ₹5,200However, monthly TDS may change if the employee receives a salary increase, bonus, additional taxable income, or eligible deductions during the year.
Income Tax Slab Rates for Salaried Employees: Tax Year 2026-27
Under the new tax regime, the income tax slab rates for individual taxpayers for Tax Year 2026-27 are:
| Annual Taxable Income | Income Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Income tax is calculated progressively. Each slab rate applies only to the portion of taxable income falling within that slab.
A Health and Education Cess of 4% applies to the calculated income tax and any applicable surcharge.
Standard Deduction and Tax Rebate
Two important tax benefits can reduce an employee's annual taxable income or final tax liability.
Standard Deduction
Eligible salaried taxpayers can claim a standard deduction of:
- ₹75,000 under the new tax regime.
- ₹50,000 under the old tax regime.
The standard deduction directly reduces taxable salary income.
Tax Rebate
Under the new tax regime, eligible resident individuals with taxable income up to ₹12 lakh may qualify for a rebate of up to ₹60,000.
For eligible salaried individuals earning only ordinary salary income, the combination of the ₹75,000 standard deduction and applicable rebate can result in zero income tax on gross salary up to ₹12.75 lakh.
However, the rebate is subject to statutory conditions and does not cover certain income taxable at special rates.
Step-by-Step Monthly TDS Calculation on Salary
Employers generally follow these steps when calculating salary TDS.
- Estimate annual gross salary. Include basic salary, allowances, bonuses, taxable benefits, and other salary components.
- Calculate eligible exemptions. Consider exemptions available under the employee's selected tax regime.
- Apply the standard deduction. Deduct the applicable standard deduction from salary income.
- Consider other permitted deductions and income. Include eligible deductions and other income reported by the employee, subject to the applicable rules.
- Apply income tax slab rates. Calculate income tax using the relevant tax regime.
- Adjust rebates and cess. Consider applicable rebate, tax relief, surcharge, and Health and Education Cess.
- Subtract TDS already deducted. Reduce the total annual tax liability by the tax already deducted during the year.
- Calculate remaining monthly TDS. Distribute the balance tax liability across the remaining salary payments.
Before your employer calculates these amounts, you can estimate your tax liability using an income tax calculator.
Worked Example: TDS on Salary for Tax Year 2026-27
Suppose Rahul is a salaried employee earning ₹15,00,000 annually. He chooses the new tax regime and has no additional income or deductions.
His salary TDS calculation would be:
| Particulars | Amount |
|---|---|
| Annual gross salary | ₹15,00,000 |
| Standard deduction | ₹75,000 |
| Taxable income | ₹14,25,000 |
| Tax on first ₹4,00,000 | ₹0 |
| Tax on next ₹4,00,000 at 5% | ₹20,000 |
| Tax on next ₹4,00,000 at 10% | ₹40,000 |
| Tax on remaining ₹2,25,000 at 15% | ₹33,750 |
| Total income tax | ₹93,750 |
| Health and Education Cess (4%) | ₹3,750 |
| Total annual income tax | ₹97,500 |
| Monthly TDS | ₹8,125 |
Rahul's employer would deduct approximately ₹8,125 per month if his estimated taxable income remained unchanged.
To understand how salary, deductions, and estimated income tax affect the amount that actually reaches your bank account each month, you can check your take-home salary using the Easy Return Salary Calculator.
What Happens If Rahul Receives a Salary Hike?
Suppose Rahul receives a salary increase effective October 2026, raising his estimated annual gross salary to ₹16,20,000.
His revised tax calculation would be:
| Particulars | Amount |
|---|---|
| Revised annual gross salary | ₹16,20,000 |
| Standard deduction | ₹75,000 |
| Revised taxable income | ₹15,45,000 |
| Income tax before cess | ₹1,11,750 |
| Health and Education Cess | ₹4,470 |
| Revised annual tax liability | ₹1,16,220 |
| TDS already deducted (April–September) | ₹48,750 |
| Remaining tax liability | ₹67,470 |
| Revised monthly TDS (October–March) | ₹11,245 |
The employer adjusts TDS across the remaining months so the total deduction matches the revised annual tax liability.
Monthly TDS Calculation for Tax Year 2026-27
| Month | TDS Deducted | Cumulative TDS |
|---|---|---|
| April | ₹8,125 | ₹8,125 |
| May | ₹8,125 | ₹16,250 |
| June | ₹8,125 | ₹24,375 |
| July | ₹8,125 | ₹32,500 |
| August | ₹8,125 | ₹40,625 |
| September | ₹8,125 | ₹48,750 |
| October | ₹11,245 | ₹59,995 |
| November | ₹11,245 | ₹71,240 |
| December | ₹11,245 | ₹82,485 |
| January | ₹11,245 | ₹93,730 |
| February | ₹11,245 | ₹1,04,975 |
| March | ₹11,245 | ₹1,16,220 |
This example shows why monthly TDS may increase after a salary hike.
For a detailed explanation, read our guide on EasyReturn.co.in.
What Happens When Too Much TDS Is Deducted?
Excess TDS can occur for several reasons:
- The employer estimated a higher annual salary.
- The employee submitted investment proofs late.
- The employee changed jobs during the year.
- Additional eligible deductions were not considered.
- Expected bonuses or payments were not received.
If excess TDS is identified during the year, the employer may adjust deductions in subsequent months.
If excess TDS remains after the year ends, the employee can claim a refund by filing an Income Tax Return.
The refund depends on the final tax liability and available tax credits.
Need help with excess salary TDS or an income tax refund? Explore EasyReturn.co.in to get professional assistance with salary income, tax deductions, and refund claims.
Payment Codes, Returns, and Forms for Salary TDS
The Income-tax Rules, 2026 introduced updated forms and reporting codes for employers deducting TDS from salary.
Under the Income Tax Act, 1961, employers reported salary TDS with references to Section 192. The new compliance framework uses Section 392 and specific four-digit payment codes.
These changes are particularly important for payroll teams, employers, tax professionals, and salaried employees reviewing TDS records.
What Is Payment Code 1001 in a TDS Return?
Payment code 1001 is used for salary payments to government employees other than Union Government employees under Section 392.
The three main salary TDS payment codes are:
| Payment Code | Nature of Salary Payment | New Section |
|---|---|---|
| 1001 | Government employees other than Union Government employees | Section 392 |
| 1002 | Employees other than government employees | Section 392 |
| 1003 | Indian Government employees | Section 392 |
For example, when a private company deducts TDS from its employees' salaries, the relevant reporting code is generally 1002.
These codes help identify the category of salary payment in the quarterly TDS statement.
The classifications are prescribed in the Income-tax Rules, 2026.
Quarterly TDS Return for Salary: Form 24Q (Now Form 138)
Employers who deduct tax from employee salaries must submit quarterly TDS statements.
Under the old Income Tax Act, salary TDS was reported through Form 24Q.
Under the new Income Tax Act, 2025, Form 138 replaces Form 24Q.
Form 138 captures information such as:
- Employer TAN and identification details.
- Employee PAN and salary information.
- Salary payments and taxable income.
- TDS deducted and deposited.
- Applicable payment codes.
- Annual salary and tax computation details.
The regular quarterly filing deadlines for Tax Year 2026-27 are:
| Quarter | Period Covered | TDS Return Due Date |
|---|---|---|
| Q1 | April–June 2026 | July 31, 2026 |
| Q2 | July–September 2026 | October 31, 2026 |
| Q3 | October–December 2026 | January 31, 2027 |
| Q4 | January–March 2027 | May 31, 2027 |
These are the regular statutory filing dates; any officially notified extension would take precedence.
Employers should reconcile salary records, challans, and employee PAN information before submitting their quarterly returns.
TDS Certificate for Salaried Employees: Form 16 ( Now Form 130 )
Form 16 ( Now Form 130 ) is the annual TDS certificate issued by employers to salaried employees.
For periods governed by the Income Tax Act, 1961, the certificate was issued as Form 16 ( Now Form 130 ).
Under the Income-tax Rules, 2026, the new salary TDS certificate is Form 130.
It contains important information about salary income, tax deductions, and tax deposited with the government.
The new certificate includes three parts:
Employer and employee identification information.
Salary payments, tax deducted, and related information.
Detailed salary and tax computation, including applicable deductions and exemptions.
Employees should use the certificate to verify salary income and TDS before filing their ITR.
For Tax Year 2026-27, the regular deadline for issuing the salary TDS certificate is June 15, 2027.
Employees working with certificates from earlier financial years can also refer to our EasyReturn.co.in resources.
How to Verify Your Salary TDS
Employees should regularly check whether their employer has correctly deposited and reported the TDS deducted from salary.
You can verify salary TDS through the Income Tax Department portal at incometax.gov.in.
Follow these steps:
- Log in using your PAN and password.
- Access the available tax-credit statement and Annual Information Statement (AIS).
- Review the salary TDS entries reported by your employer.
- Compare the amounts with monthly salary slips and your TDS certificate.
- Check whether the employer's TAN and reported deductions are correct.
For older years, Form 26AS is an important source of tax-credit information. Under the new rules, the corresponding tax-credit statement is Form 168.
What if Salary TDS Does Not Match?
If the TDS amount in your tax records differs from the amount deducted by your employer, contact the payroll or accounts department.
The employer may need to file a correction statement so that the correct tax credit is reflected in your records.
Compare your salary slips, TDS certificate and available tax-credit records before filing your return so mismatches can be corrected early.
Employer Responsibilities Under Section 392
Under Section 392 of the Income Tax Act, 2025, employers are responsible for deducting applicable income tax from salary payments and complying with prescribed TDS requirements.
These obligations include calculating salary TDS, depositing the tax, filing quarterly statements, issuing salary TDS certificates, and maintaining supporting records.
Who Deducts TDS on Salary Under Section 392?
The employer or any person responsible for paying taxable salary must deduct applicable TDS under Section 392.
In this process:
The employer who deducts and deposits TDS.
The employee whose salary is subject to TDS.
For example, if a private company pays monthly salary to 50 employees, the company is responsible for calculating and deducting TDS wherever applicable.
The employer must consider the employee's estimated annual taxable income and relevant tax provisions.
TAN of Employer and Basic Deductor Rules
Employers required to deduct TDS generally need a Tax Deduction and Collection Account Number (TAN).
The TAN is used for reporting and depositing TDS with the Income Tax Department.
Employees should provide their correct Permanent Account Number (PAN) so that the tax deducted is accurately credited to their records.
Incorrect PAN or TAN information can create reporting mismatches and may delay tax-credit verification.
Accurate PAN and TAN details are important because TDS credit depends on correct employer and employee reporting.
TDS Is Deducted at the Time of Salary Payment
Under Section 392, TDS on salary is generally deducted at the time of payment.
This means employers must consider TDS when salary is actually paid, including payments relating to earlier periods.
For example, if an employee receives salary arrears in December 2026, the employer must include those arrears when estimating the employee's annual tax liability.
Similarly, advance salary may affect the TDS calculation for the year in which the amount is paid.
Reporting Perquisites and Employee Benefits
Employers must include the taxable value of perquisites and profits in lieu of salary while estimating salary income.
Perquisites may include certain employer-provided benefits, such as accommodation, vehicles, or other facilities.
Under the old framework, prescribed perquisite details were reported through Form 12BA.
Under the Income-tax Rules, 2026, the corresponding statement is Form 123, where applicable.
Correct reporting of taxable perquisites helps ensure that salary TDS is calculated accurately.
Employer TDS Compliance Checklist
Employers should follow these steps:
- Obtain employee PAN and required declarations.
- Collect the employee's tax-regime preference.
- Estimate annual taxable salary.
- Include taxable allowances, bonuses, and perquisites.
- Calculate and deduct applicable TDS.
- Deposit TDS within the prescribed deadline.
- File quarterly salary TDS statements in Form 138.
- Issue Form 16 ( Now Form 130 ) within the applicable deadline.
- Maintain employee declarations, investment proofs, and salary records.
TDS Deposit Due Date for Employers
For most non-government employers, the general TDS deposit deadlines are:
| TDS Deduction Period | Deposit Due Date |
|---|---|
| April to February | 7th of the following month |
| March | April 30 |
Separate deposit procedures may apply to government deductors.
Employers should follow the deadlines prescribed under the applicable Income-tax Rules and check for any official extensions.
What Happens If an Employer Does Not Deduct TDS on Salary?
Failure to deduct or deposit applicable TDS may result in:
- Interest for late deduction.
- Interest for delayed deposit.
- Penalties for applicable defaults.
- Late filing fees for TDS statements.
- Notices from the Income Tax Department.
- Treatment as an assessee in default, subject to statutory conditions.
In ordinary cases, interest for late deduction is calculated at 1% per month or part of a month, while delayed deposit after deduction can attract interest at 1.5% per month or part of a month.
The actual consequences depend on the nature and duration of the default and any relief available under the law.
Employers should review payroll records and tax deposits regularly to avoid compliance problems.
Employee Declarations and Special TDS Situations
Employees also have responsibilities that affect salary TDS calculation.
Although employers deduct TDS, employees should provide accurate information about their tax regime, previous employment, investments, and other income.
Incorrect or incomplete declarations can result in excess or insufficient TDS.
New Tax Regime Is the Default for TDS
The new tax regime is the default taxation system for salaried employees.
However, eligible employees may inform their employer if they want salary TDS calculated using the old tax regime.
Both regimes have different slab rates and deduction rules.
| Feature | Old Tax Regime | New Tax Regime |
|---|---|---|
| Default regime | No | Yes |
| Standard deduction | ₹50,000 | ₹75,000 |
| HRA exemption | Available if eligible | Generally unavailable |
| Traditional tax-saving deductions | Available if eligible | Mostly unavailable |
| Income tax slabs | Old slab structure | Revised slab structure |
| Investment-based tax benefits | Available | Limited |
The final tax-regime selection for eligible non-business taxpayers can generally be made when filing the income tax return, subject to applicable rules.
Therefore, employees should compare both regimes before making their final ITR selection.
Investment Proof Submission to Employer
Employees using the old tax regime may need to submit declarations and supporting documents for eligible exemptions and deductions.
Common examples include:
- Rent receipts for HRA exemption.
- Eligible life insurance premiums.
- Public Provident Fund contributions.
- ELSS investments.
- Eligible health insurance premiums.
- Housing loan interest certificates.
- Leave Travel Allowance documentation.
Under the old rules, these declarations were associated with Form 12BB.
Under the Income-tax Rules, 2026, the corresponding declaration form is Form 124.
Submitting accurate information allows the employer to estimate annual taxable income more correctly.
Can You Declare Previous Employer Salary to Your New Employer?
Yes. An employee who changes jobs during a tax year can provide previous employer salary and TDS information to the new employer.
This helps the new employer calculate tax based on the employee's combined estimated annual salary income.
Suppose Priya worked for one company from April to September 2026 and joined another company in October.
If the new employer calculates TDS using only the salary earned from October onwards, the total annual tax liability may be underestimated.
Providing previous employer salary details helps avoid this problem.
Earlier, previous salary declarations were associated with Form 12B and related provisions under Section 192.
Employees should follow the current declaration procedure prescribed under the Income-tax Rules, 2026.
If previous salary information is not reported, an employee may have additional tax payable while filing the ITR.
Special TDS Situations
TDS on Salary Without PAN
Employees should provide a valid PAN to their employer.
If PAN is not furnished, higher TDS provisions may apply under Section 397(2) of the Income Tax Act, 2025.
Depending on the applicable conditions, tax may be deducted at a higher prescribed rate, including 20% in relevant salary cases.
Providing accurate PAN information helps ensure proper TDS reporting and tax-credit matching.
TDS on Salary Arrears
Salary arrears may increase taxable income in the year of receipt.
For example, an employee receiving arrears for previous years may have a higher tax liability because the amount is added to current-year income.
Tax relief may be available under Section 157 of the Income Tax Act, 2025, corresponding to the earlier Section 89 relief.
Employees seeking applicable relief must follow the prescribed procedure, including Form 39 (earlier Form 10E).
Salary Paid in Foreign Currency
When taxable salary is paid in foreign currency, the amount must be converted into Indian rupees using the prescribed exchange-rate rules.
The employer calculates TDS based on the taxable amount.
In international employment situations, the employee's residential status, location of services, and applicable tax treaties may also affect taxation.
TDS on EPF Withdrawal
Certain withdrawals from a recognized provident fund may be subject to TDS.
Under the Income Tax Act, 1961, these payments were covered by Section 192A.
Under the Income Tax Act, 2025, the corresponding provisions are included in Section 392(7).
The relevant accumulated provident fund balance reporting category uses payment code 1004.
Employees should check whether their withdrawal is taxable or qualifies for an exemption before assuming that TDS applies.
Section 192 vs Section 392: Side-by-Side Comparison
Section 192 and Section 392 serve broadly the same purpose: requiring employers to deduct applicable income tax from salary payments.
The major difference is the governing law.
Section 192 belonged to the Income Tax Act, 1961, while Section 392 operates under the Income Tax Act, 2025.
Section 192 vs Section 392 TDS on Salary
| Feature | Section 192 | Section 392 |
|---|---|---|
| Governing law | Income Tax Act, 1961 | Income Tax Act, 2025 |
| Applicable salary payments | Up to March 31, 2026 | From April 1, 2026 |
| Income covered | Salary | Salary and specified employee balances |
| TDS calculation | Average income tax rate | Average income tax rate |
| Tax rates | Applicable slab rates | Applicable slab rates |
| Reporting reference | Section 192 | Section 392 and payment codes |
| Payment codes | Earlier reporting codes | 1001, 1002, 1003 |
| Quarterly salary TDS return | Form 24Q | Form 138 |
| Salary TDS certificate | Form 16 ( Now Form 130 ) | Form 130 |
| Year terminology | Financial year / Assessment year | Tax year |
| EPF withdrawal provision | Section 192A | Section 392(7) |
The Income Tax Department explains that the 2025 Act broadly retains the existing TDS policy while presenting the provisions in a simplified and reorganized structure.
Section 392 and Section 393: New TDS Sections Under the Income Tax Act 2025
Under the Income Tax Act, 1961, TDS provisions were spread across several sections, including Sections 192 to 194T.
The Income Tax Act, 2025 consolidates these provisions into two principal sections.
TDS on Salary
Section 392 applies to salary income and specified accumulated employee balances.
It replaces the earlier Section 192 and incorporates the relevant provisions corresponding to Section 192A.
TDS on Other Payments
Section 393 covers various non-salary payments, including:
- Interest
- Rent
- Contractor payments
- Professional fees
- Commission and brokerage
- Certain immovable property transactions
- Other specified payments
The applicable tax deduction rates and thresholds depend on the nature of payment and relevant provisions.
Has the TDS Rate on Salary Changed Under the New Income Tax Act?
The replacement of Section 192 with Section 392 does not itself introduce a new fixed TDS rate for salaried employees.
Employers continue calculating TDS using estimated taxable salary and applicable income tax slab rates.
However, tax rates and available benefits may change through Finance Acts.
Employees should therefore review the tax slabs and deduction rules applicable to the relevant tax year.
Section 192 → Section 392 changes the legal reference and compliance framework, but salary TDS is still calculated using the employee's estimated taxable income and applicable tax rates.
Frequently Asked Questions
Find quick answers to common questions about Section 192, Section 392, salary TDS, payment codes, PAN requirements, and the transition to the Income Tax Act, 2025.
01 What is Section 192 of the Income Tax Act?
Section 192 of the Income Tax Act, 1961 required employers to deduct income tax from taxable salary at the time of payment. The deduction was based on estimated annual taxable salary and applicable slab rates. The provision applied to salary payments before April 1, 2026.
02 Which section replaced Section 192?
Section 392 of the Income Tax Act, 2025 replaced Section 192 for salary TDS purposes from April 1, 2026. Employers now use Section 392 to calculate applicable tax deductions on salary payments.
03 Is Section 192 still applicable?
Section 192 remains relevant for salary payments and tax matters relating to earlier years, including FY 2025-26. For salary paid from April 1, 2026, the corresponding TDS provision is Section 392 under the Income Tax Act, 2025.
04 What is the new section number for Section 192?
The new section number for Section 192 is Section 392. It governs TDS on salary under the Income Tax Act, 2025 and became applicable from April 1, 2026.
05 What is payment code 1001 in a TDS return?
Payment code 1001 identifies salary payments to government employees other than Union Government employees under Section 392. Code 1002 applies to non-government employees, while code 1003 applies to Indian Government employees.
06 Has the TDS rate on salary changed under the new Income Tax Act?
There is no separate fixed TDS rate introduced simply because Section 192 became Section 392. Employers continue calculating tax using applicable income tax slab rates and the average-rate method based on estimated taxable salary.
07 What happens if TDS is deducted without PAN?
If an employee does not provide a valid PAN, higher TDS provisions may apply under Section 397(2) of the Income Tax Act, 2025. Employees should provide their correct PAN to avoid unnecessary deductions and tax-credit reporting problems.
08 Is Section 192A now part of Section 392?
Yes. The earlier provisions relating to TDS on specified accumulated provident fund balances under Section 192A are now included in Section 392(7) of the Income Tax Act, 2025.
09 Section 192 kya hai?
Section 192 salary par TDS deduct karne ka purana provision tha, jo Income Tax Act, 1961 ke under apply hota tha. Employer estimated annual taxable salary ke basis par tax calculate karke salary payment ke time TDS deduct karta tha.
10 Section 192 ki jagah kaun sa section aaya?
Income Tax Act, 2025 mein Section 192 ki jagah Section 392 aaya hai. Yeh April 1, 2026 se applicable hai. Salary TDS ka basic calculation method largely pehle jaisa hi hai.
Conclusion
Section 192 TDS on salary is now governed by Section 392 of the Income Tax Act, 2025, effective April 1, 2026.
The basic method of salary TDS calculation remains largely unchanged. Employers continue to estimate taxable salary, apply the relevant income tax rates, and deduct tax during salary payments.
The major changes include the introduction of the tax-year concept, payment codes 1001–1003, Form 138 for quarterly salary TDS returns, and Form 16 ( Now Form 130 ) as the updated salary TDS certificate.
Salaried employees should regularly verify their TDS records against the relevant tax-credit statements and Annual Information Statement (AIS).
If excess TDS has been deducted, eligible employees can claim a refund by filing their Income Tax Return.
Section 392 replaces Section 192 for salary TDS from April 1, 2026.
Salary TDS continues to be based on estimated annual taxable income and applicable tax rates.
Employers now need to follow the updated payment codes, reporting forms, and tax-year framework.
Employees should verify reported TDS before filing their Income Tax Return.
For professional assistance with salary income, deductions, TDS verification, and refunds, explore EasyReturn.co.in with Easy Return.
CA Sagar Batra
ICAI Registered Chartered Accountant · 10+ Years of Professional Experience · 12,000+ Tax Filings
Chartered Accountant with experience in taxation, compliance and business advisory. His work covers Income Tax, GST, TDS, tax notices, business compliance and financial documentation for individuals and businesses across India.