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In summary
Section 192 required employers to deduct Tax Deducted at Source (TDS) when paying taxable salary. From 1 April 2026, the corresponding rule is Section 392 of the Income-tax Act, 2025.
- Salary TDS has no fixed percentage.
- Employers use estimated annual taxable income.
- TDS is deducted when salary is paid.
- New-regime standard deduction is Rs. 75,000.
- Salary TDS return uses Form 138.
- Salary TDS certificate uses Form 130.
The employer estimates your annual tax liability and normally spreads the deduction across salary payments during the year. If your salary, deductions, tax regime, or other reported income changes, the employer can adjust later TDS deductions.
What is Section 192 of the Income Tax Act?
Section 192 was the rule for deducting TDS from salary under the Income-tax Act, 1961.
It required an employer to estimate an employee's taxable salary and deduct income tax when salary was actually paid.
From 1 April 2026, the Income-tax Act, 2025 replaced the old Act. The corresponding provision is now Section 392. It requires a person paying taxable salary to deduct tax at the average rate based on the employee's estimated salary income for the tax year.
Therefore, “Section 192” remains useful when reading older tax documents, but Section 392 is the current reference for Tax Year 2026-27 onwards.
When is TDS deducted from salary?
Salary TDS is deducted when the salary is paid.
This is different from the rule used to decide when salary income itself becomes taxable. Salary income is generally taxable when it becomes due or is received, whichever is earlier.
For TDS purposes, the employer deducts tax when making the salary payment.
This can include:
- Regular monthly salary
- Advance salary
- Bonuses
- Taxable allowances
- Taxable perquisites
- Salary arrears
An employer normally deducts TDS every month, but the amount can change during the year if your estimated taxable income changes.
What is the TDS rate on salary?
There is no fixed TDS rate for salary.
Unlike some other TDS provisions that use rates such as 1%, 2%, or 10%, salary TDS depends on your estimated annual taxable income and applicable income tax rates.
Under the default tax regime for Tax Year 2026-27, the basic slab rates are:
| Total income | Tax rate |
| Up to Rs. 4 lakh | Nil |
| Rs. 4 lakh to Rs. 8 lakh | 5% |
| Rs. 8 lakh to Rs. 12 lakh | 10% |
| Rs. 12 lakh to Rs. 16 lakh | 15% |
| Rs. 16 lakh to Rs. 20 lakh | 20% |
| Rs. 20 lakh to Rs. 24 lakh | 25% |
| Above Rs. 24 lakh | 30% |
These rates apply under Section 202(1) of the Income-tax Act, 2025.
Employees who are eligible and choose the old tax regime are taxed according to the rates and conditions applicable to that regime.
How does an employer calculate salary TDS?
The employer first estimates how much tax you are likely to owe for the whole tax year.
A simple process is:
- Estimate annual salary: Include taxable salary, bonus, allowances, and perquisites.
- Reduce permitted exemptions: Apply exemptions that are available under your chosen tax regime.
- Allow salary deductions: This can include the applicable standard deduction.
- Consider reported income: The employer can consider permitted details of other income reported by you.
- Apply eligible deductions: Available deductions depend on your chosen tax regime.
- Calculate income tax: Apply the relevant slab rates, rebate, surcharge, and cess.
- Reduce eligible TDS credits: Consider tax already deducted where permitted.
- Spread the balance: Deduct the estimated remaining tax from salary payments.
TDS is based on estimated taxable salary, not simply on your CTC.
What is a simple example of salary TDS?
Suppose Aarav earns an annual salary of Rs. 13.75 lakh and uses the new tax regime.
Assume the only relevant deduction is the standard deduction of Rs. 75,000.
Salary = Rs. 13,75,000
Less standard deduction = Rs. 75,000
Taxable income = Rs. 13,00,000
The basic tax would be:
- Up to Rs. 4 lakh: Nil
- Next Rs. 4 lakh at 5%: Rs. 20,000
- Next Rs. 4 lakh at 10%: Rs. 40,000
- Remaining Rs. 1 lakh at 15%: Rs. 15,000
Income tax = Rs. 75,000
Health and Education Cess at 4% is Rs. 3,000.
Total estimated tax = Rs. 78,000
If the employer spreads this equally across 12 months:
Approximate monthly TDS = Rs. 6,500
This example is simplified. Actual TDS can change because of bonuses, other income, deductions, relief, previous-employer salary, or changes during the year.
What happens if you change jobs during the year?
Your new employer can consider salary and TDS from your previous employer when calculating tax for the rest of the year.
This is important because looking only at salary from the new job can result in too little tax being deducted.
Under the Income-tax Rules, 2026, Forms 12B and 12BAA continue to be used for furnishing relevant income details for salary TDS purposes under Section 392(4)(a).
For example, suppose you earned Rs. 5 lakh from your first employer and Rs. 8 lakh from your second employer. Your tax should not normally be calculated as if the Rs. 8 lakh were your only salary for the entire year.
Providing previous-employer details helps the new employer estimate your total annual tax more accurately.
How are salary TDS returns filed?
Employers have to report salary TDS to the Income Tax Department.
For deductions from 1 April 2026, the salary TDS statement is filed using Form 138. This replaces Form 24Q used under the Income-tax Act, 1961.
The normal quarterly filing dates are:
| Quarter | Due date |
| April to June | 31 July |
| July to September | 31 October |
| October to December | 31 January |
| January to March | 31 May |
Employers should report the salary paid, taxable income, TDS deducted, and related employee details correctly.
What salary TDS certificate does an employee receive?
From the Income-tax Rules, 2026 framework, the annual salary TDS certificate is Form 130.
Form 130 replaces the earlier Form 16 for current Section 392 salary TDS. It shows details such as salary, tax deducted, deductions considered, and tax deposited by the employer.
Employees should compare this certificate with their salary records and tax information before filing their income tax return.
For older periods governed by the Income-tax Act, 1961, Form 16 remains relevant.
What should employees check during the year?
Do not wait until the end of the tax year to look at salary TDS.
Check:
- Your selected tax regime
- Estimated annual taxable salary
- Standard deduction
- Eligible exemptions and deductions
- Previous-employer salary
- Other income reported to your employer
- Salary arrears or bonuses
- TDS already deducted
If your salary increases or you receive a large bonus, your employer may increase later TDS deductions. Similarly, valid deductions or tax already deducted elsewhere can change the estimate.
Regular checks can reduce the chance of a large tax amount becoming payable when you file your return.
Conclusion
Section 192 was the salary TDS provision under the Income-tax Act, 1961. For salary paid from 1 April 2026 onwards, the corresponding rule is Section 392 of the Income-tax Act, 2025.
Salary TDS does not have one fixed rate. Your employer estimates your annual taxable income, applies the relevant tax rates and available reliefs, and deducts the resulting tax from salary payments.
Check your tax regime, deductions, previous-employer income, bonuses, and TDS records during the year to reduce errors.
Last reviewed: October, 2026
Mutual funds are subject to market risk. Please read the scheme-related documents carefully before investing.
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Frequently Asked Questions
Understanding salary TDS
Filing and changes during the year
Salary arrears and job changes
What is section 192 in income tax?
Section 192 was the provision requiring employers to deduct TDS from salary under the Income-tax Act, 1961. It applied when salary was paid to an employee. From 1 April 2026, the corresponding provision is Section 392 of the Income-tax Act, 2025. The employer estimates the employee's taxable salary for the year and deducts tax using the applicable rates.
What are the TDS rates under Section 192 of the Income Tax Act?
There is no fixed percentage for salary TDS. The employer calculates tax using the income tax slab rates applicable to the employee's estimated taxable income and chosen tax regime. The resulting annual tax liability is generally spread across salary payments. The amount may change during the year if salary, bonus, deductions, other reported income, or tax already deducted changes.
How to file TDS returns under Section 192 of the Income Tax Act?
For salary TDS relating to periods from 1 April 2026, employers file the quarterly salary TDS statement in Form 138, which replaced Form 24Q. The normal due dates are 31 July, 31 October, 31 January, and 31 May for the four quarters. Employees do not file this TDS statement themselves. They report their salary and available TDS credit in their income tax return.
How does Section 192 of the Income Tax Act apply to salaries?
Section 192 required an employer to deduct TDS when salary was paid. The current equivalent, Section 392, follows the same basic approach. The employer estimates taxable salary, applies the relevant income tax rates, considers eligible claims and reported information, and deducts the estimated tax from salary. TDS applies to taxable salary components rather than automatically to the employee's entire CTC.
Is TDS under Section 192 deducted on salary arrears received in a later financial year?
Yes, TDS under Section 192 is applicable to salary arrears received in a later financial year. The employer deducts TDS based on the employee's estimated taxable salary for the financial year in which the arrears are paid. Employees may be eligible for tax relief under Section 89(1), subject to applicable conditions, to reduce the impact of receiving arrears in a single year.
How does an employer calculate Section 192 TDS when an employee changes jobs during the year?
When an employee changes jobs during the year, the new employer calculates TDS under Section 192 based on the estimated total taxable salary for the financial year, including salary received from the previous employer, if the employee provides the relevant details. The employee can submit previous salary and TDS information through Form 12B to help the new employer calculate the correct TDS and avoid under- or over-deduction.
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