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Govt directs TDS on 7th Pay Commission arrears.

The Income Tax Department Wednesday instructed authorities to ensure that tax was deducted at source for the employee salary drawn together with 7th Pay Commission arrears on the gross amount at the applicable slab rate.

The Income Tax Department has advised that while drawing the arrears on account of 7th Pay Commission, the Drawing and Disbursing Officers should take into account the arrear amount as well as the salary drawn by each employee during the financial year 2018-19, according a circular issues on Wednesday.

The income tax on the gross arrear amount now has to be worked out at the slab rate applicable to the particular employee and the amount of TDS deducted from the arrear amount, according to the circular.

The balance net amount will have to be credited to the employees’ GP Fund account. The instructions ask the concerned DDOs that the TDS amount may be deposited into Central Government Account within the due date, advising them to ensure deduction of TDS on the salary on average monthly basis is not restricted to the last quarter(s).

The DDOs have been asked to follow the instructions and ensure that tax is deducted at source and no deviation be made in the new procedure explained in the circular.Treasury officers have also been asked to ensure the new instructions are followed by all the DDOs in letter and spirit.

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