No TDS to be Deducted u/s 206AA From Salary Below Taxable Limit

[PARAS MITTAL (CA,CS,NCFM)]

3. Section 192 of the Income-tax Act,1961: broad scheme of tax
deduction at source from “salaries”.
3.1Method of Tax Calculation - Every person who is responsible for
paying any income chargeable under the head “Salaries” shall deduct
income-tax on the estimated income of the assessee under the head
“Salaries” for the financial year 2010-11. The income-tax is required
to be calculated on the basis of the rates given above subject to
provisions of section 206AA of the Income-tax Act and shall be
deducted at the time of each payment. No tax will, however, be
required to be deducted at source in any case unless the estimated
salary income including the value of perquisites, for the financial
year exceeds Rs. 1,60,000 or Rs. 1,90,000 or Rs. 2,40,000, as the case
may be, depending upon the gender and age of the employee. (Some
typical examples of computation of tax are given at Annexure-I).
4.8 Section 206AA.
4.8-1 Finance Act (No. 2) 2009, w.e.f. 1-4-2010 has inserted section
206AA in the Income-tax Act which makes furnishing of PAN by the
employee compulsory in case of payments liable to TDS. If employee
(deductee) fails to furnish his/her PAN to the deductor, the deductor
shall make TDS at a higher of the following rates :
(i) at the rate specified in the relevant provision of this Act;
or
(ii) at the rate or rates in force; or
(iii) at the rate of twenty per cent.


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