With respect to information given in Issue 4, examine the obligation of Subham Ltd. to deduct tax at source while paying/ crediting salary to Ms.…

Section 192 requires deduction of tax from salary at the time of payment. Thus, the employer, i.e. Subham Ltd., is not required to deduct tax at source when salary has not been paid but is merely credited to the account of the employee in its books of account. Subham Ltd., therefore, is not required to deduct tax at source in respect of the salary of March, 2024 which is merely credited to the account of employee, Ms. Disha, and not paid. If salary has been paid during the year to Ms. Disha, then, Subham Ltd. a deductor, being an employer, shall seek information from each of its employees having income under section 192 regarding their intended tax regime and each such employee shall intimate the same to the deductor, being his employer, regarding his intended tax regime for each year and upon intimation, the deductor shall compute his total income, and deduct tax at source thereon according to the option exercised. If intimation is not made by the employee, it shall be presumed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime. Accordingly, in such a case, Subham Ltd. shall deduct tax at source, on income under section 192, in accordance with the rates provided under section 115BAC(1A).