{"id":31161,"date":"2021-05-27T14:12:35","date_gmt":"2021-05-27T08:42:35","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=31161"},"modified":"2021-06-03T17:22:43","modified_gmt":"2021-06-03T11:52:43","slug":"cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/","title":{"rendered":"CBDT\u2019s Circular No: 20\/2020 renders clarification for TDS for Salaries for FY 2020-21"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Last year, CBDT, by way of Circular No 20-2020, released on 03.12.2020, has provides some clarification for the \u201cTDS Deduction from Salaries for the Financial Year 2020 \u2013 2021\u201d.<\/p>\n\n\n\n<p>Further, such a circular was authorized in continuance to Circular No: 4\/2020, released on 16.01.2020, which talks about the rate of <a href=\"https:\/\/corpbiz.io\/tds-return-filing\"><strong>TDS<\/strong><\/a> deduction from salaries u\/s 192 of the IT Act 1961.&nbsp;&nbsp;<\/p>\n\n\n\n<p>In this write-up, we will come\nacross the clarifications made by the said authority for new TDS deduction from\nsalaries rates, which covered salaries from the FY 2020-21, together with other\nproblems taken into account.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#The_paradigm_of_Tax_Deducted_at_Source_TDS\" >The\nparadigm of Tax Deducted at Source (TDS)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#Underlining_the_Applicability_of_Circular_No_20-2020\" >Underlining the Applicability of Circular No 20-2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#How_is_TDS_calculated_on_the_Salary\" >How\nis TDS calculated on the Salary?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#Different_Tax_Slabs_for_Imposing_Tax_under_the_Salary_Head\" >Different\nTax Slabs for Imposing Tax under the Salary Head<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#Clarifications_for_Arrears_in_Circular_No_202020\" >Clarifications\nfor Arrears in Circular No: 20\/2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#Clarifications_on_account_of_Losses_Incurred_Under_Any_Head\" >Clarifications\non account of Losses Incurred Under Any Head<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#Other_Clarifications_mentioned_in_Circular_No_202020\" >Other\nClarifications mentioned in Circular No: 20\/2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/cbdts-circular-no-20-2020-renders-clarification-for-tds-for-salaries-for-fy-2020-21\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_paradigm_of_Tax_Deducted_at_Source_TDS\"><\/span>The\nparadigm of Tax Deducted at Source (TDS)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term Tax Deducted at\nSource, aka TDS, implies the amount subtracted by the payer for paying Salary\nto the payee. It is a kind of Direct Tax &amp; is imposed on incomes,\ndividends, rents, interest received from the bank, sale of assets, etc.<\/p>\n\n\n\n<p>Moreover, the TDS provisions are overseen by the CBDT and governed under the ambit of the IT Act 1961. Section 194 IA, 194 IB, 194 IC of the IT Act 1961 governs the TDS applicable to the sale of goods. But, section 302 of the Act talks about the TDS imposed on dividends. Lastly, TDS is a kind of advance tax whose returns are filed every quarter.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/online-methods-for-checking-the-tds-status\/\">What are the Online Methods for Checking the TDS Status?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Underlining_the_Applicability_of_Circular_No_20-2020\"><\/span>Underlining the Applicability of Circular No 20-2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every taxpayer who required to\npay an amount as the income generated by the assessee can deduct Tax under the\nhead \u201cSalaries\u201d on the aforesaid income for the FY 2020-21<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_is_TDS_calculated_on_the_Salary\"><\/span>How\nis TDS calculated on the Salary?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the provision of the IT Act 1961, TDS is estimated by taking the salary tax slab into account in which an employee falls. That means no tax will be chargeable if the computed Salary (inclusive of requirements) of an employees does not surpass the tax slab or the new tax domain u\/s 115BAC.&nbsp; <\/p>\n\n\n\n<p>Here\u2019s the formula for computing salary for TDS deduction:&nbsp;<\/p>\n\n\n\n<p class=\"has-background has-luminous-vivid-amber-background-color\"><strong>Salary = Basic Salary + Perquisites<\/strong><\/p>\n\n\n\n<p>But, if case an employee gets\na salary from multiple employers, he\/she needs to share the information of the\npresent employee in written form, which shall be validated by him\/her, together\nwith other employers. Also, the current employer requires to deduct TDS on an\naggregate basis.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Different_Tax_Slabs_for_Imposing_Tax_under_the_Salary_Head\"><\/span>Different\nTax Slabs for Imposing Tax under the Salary Head<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following is the tabular form of rates at which Tax shall be imposed for the FY 2020-21 as per the provisions of the <em><strong>Finance Act, 2020<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Finance_Act_2000\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>.&nbsp;<\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>SI.&nbsp;No<\/strong>\n  <\/td><td>\n  <strong>Total\n  Income Earned<\/strong>\n  <\/td><td>\n  <strong>Income\n  Tax Rate<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>&nbsp;1<\/strong>\n  <\/td><td>\n  Where the Total Income\n  earned lies within the range of Rs 250000\n  <\/td><td>\n  Nil\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  <strong>&nbsp;2<\/strong>\n  <\/td><td>\n  Where the Total Income\n  earned lies within the range of Rs 250000-500000\n  <\/td><td>\n  5% of the amount by which\n  the gross income generate surpasses INR 250000\n  <\/td><\/tr><tr><td>\n  <strong>&nbsp;3<\/strong>\n  <\/td><td>\n  Where the Total Income lies\n  within the range of Rs 500000-1000000\n  <\/td><td>\n  Rs 12500 + 20% of the amount\n  by which the gross income surpasses INR 500000\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  <strong>&nbsp;4<\/strong>\n  <\/td><td>\n  Where the Total Income is\n  higher than Rs 1000000\n  <\/td><td>\n  Rs 112500 + 30% of the\n  amount by which the gross income surpasses the threshold of Rs 1000000\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p><strong>Normal Rates of Income Tax<\/strong><\/p>\n\n\n\n<p><strong><em>When the Assessee is an Indian national, serving over 60 years of age but below 80 years<\/em><\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  SI No\n  <\/td><td>\n  Total Income Earned\n  <\/td><td>\n  Rate of Income Tax\n  <\/td><\/tr><tr><td>\n  &nbsp;1\n  <\/td><td>\n  Where the gross Income generated\n  remain well below Rs 300000\n  <\/td><td>\n  Nil\n  <\/td><\/tr><tr><td>\n  &nbsp;2\n  <\/td><td>\n  Where the gross Income\n  generated Rs 300000 but does not surpassed Rs 500000\n  <\/td><td>\n  5% of the amount by which\n  the gross Income generated exceeds Rs 300000\n  <\/td><\/tr><tr><td>\n  &nbsp;3\n  <\/td><td>\n  Where the gross Income\n  generated surpassed Rs 500000 but does not exceed INR 1000000\n  <\/td><td>\n  INR 100001+ 20% of the\n  amount by which the gross Income generated exceeds Rs 500000\n  <\/td><\/tr><tr><td>\n  4\n  <\/td><td>\n  Where the gross Income\n  generated exceeds Rs 1000000\n  <\/td><td>\n  Rs 110000 + 30% of the total\n  amount by which the gross Income generated surpassed Rs 1000000\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p><strong><em>When the Assessee is an Indian national, who is serving the age of 80 years or more<\/em><\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  SI No\n  <\/td><td>\n  Total Income Earned\n  <\/td><td>\n  Rate of Income Tax\n  <\/td><\/tr><tr><td>\n  &nbsp;1\n  <\/td><td>\n  Where the gross Income\n  generated does not exceed Rs 500000\n  <\/td><td>\n  Nil\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  &nbsp;2\n  <\/td><td>\n  Where the gross Income\n  generated surpassed Rs 500000 but does not exceed Rs 1000000\n  <\/td><td>\n  20% of the total amount by\n  which the gross Income generated exceeds Rs 500000\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  &nbsp;3\n  <\/td><td>\n  Where the gross Income\n  generated exceeds Rs 1000000\n  <\/td><td>\n  Rs 100000 plus 30% of the\n  amount by which the gross Income generated exceeds Rs 1000000\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  &nbsp;\n  <\/td><td>\n  &nbsp;\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clarifications_for_Arrears_in_Circular_No_202020\"><\/span>Clarifications\nfor Arrears in Circular No: 20\/2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In terms of arrears, the\nemployee can claim relief u\/s 89 of the IT Act. Further, to serve such a\npurpose, the employer needs to furnish details in Form 10E, which further needs\nto be verified. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clarifications_on_account_of_Losses_Incurred_Under_Any_Head\"><\/span>Clarifications\non account of Losses Incurred Under Any Head<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If in the event a loss came\ninto existence under any head (other than the House Property), the same shall\nnot be taken into account by DDO for the TDS calculation. In a case contrary to\nthis, the DDO shall need to file declaration in addition to the computation of\nloss. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Other_Clarifications_mentioned_in_Circular_No_202020\"><\/span>Other\nClarifications mentioned in Circular No: 20\/2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> With respect to a registered taxpayer eligible for TDS deduction, CBDT has rolled out some clarification for provisions related to the following; <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Other-Clarifications-mentioned-in-Circular-No-20-2020.png\" alt=\"Other Clarifications mentioned in Circular No: 20\/2020\" class=\"wp-image-31200\" width=\"548\" height=\"509\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Other-Clarifications-mentioned-in-Circular-No-20-2020.png 997w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Other-Clarifications-mentioned-in-Circular-No-20-2020-300x279.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Other-Clarifications-mentioned-in-Circular-No-20-2020-768x714.png 768w\" sizes=\"(max-width: 548px) 100vw, 548px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The CBDT\u2019s Circular No 20-2020 has provided clarification for new TDS deduction from salaries rates, which covered salaries from the FY 2020-21. Also, all the clarification mentioned in Circular No 20-2020 was in line with the provisions of IT Act 1961 &amp; IT rules 1962.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/tds-payment-due-date-through-challan\/\">What is TDS Payment Due Date through Challan?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last year, CBDT, by way of Circular No 20-2020, released on 03.12.2020, has provides some clarification for the \u201cTDS Deduction from Salaries for the Financial Year 2020 \u2013 2021\u201d. Further, such a circular was authorized in continuance to Circular No: 4\/2020, released on 16.01.2020, which talks about the rate of TDS deduction from salaries u\/s [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":31198,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[237],"tags":[1774],"acf":{"service_id":"51"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":3396,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/31161"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=31161"}],"version-history":[{"count":17,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/31161\/revisions"}],"predecessor-version":[{"id":31201,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/31161\/revisions\/31201"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/31198"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=31161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=31161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=31161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}