Income tax deduction from Salaries during the FY 2020-21 - Circular issued
Deduction of Tax at Source - Income tax deduction from salaries during the financial year 2020-21 under section 192 of the Income Tax Act 1961.- Circular issued vide 79/2020/Fin Dated 11/12/2020.
From the FY 2020-21 onwards, the Assesses can opt New Tax Regime as per Section 115BAC or Continue in the Existing tax Regime. The employer is liable to deduct the TDS from the salaries of their employees according to the Tax regime opted by the employee. The new tax regime with lower rates was rolled out by the government, which will be optional, taxpayers will have to let go of exemptions. The decision has to be taken by the employee at the beginning of the Financial Year. There is no way to change the regime anytime during the financial year. The taxpayer has to wait until the beginning of the next FY to switch from the existing system or at the time of filing the Income Tax Return. In short, for the Financial Year 2020-21, the payer can opt to continue the existing Income Tax Regime or New Tax Regime to lower the tax rate.