Every Employer at the time of payment of ‘Salary’ is required to deduct TDS at an Average Rate of Income Tax applicable. An employer needs to deduct TDS only if the total salary for a financial year is more than Rs. 2,50,000 u/s 192.
The average rate of income tax is to be calculated on the basis of Income Tax Slab Rates of the financial year.
Average Rate of Tax = Total Tax Liability of an employee * 100 / Total Income of an employee
e-TDS Return Form: Form 24Q needs to be filed by the Employer/Payer for each Quarter. And TDS needs to be deposited on or before the 7th of the next month via challan no. 281. Also, an employer needs to issue Form 16 to each employee by 15th June of next financial year as proof of TDS Deduction and Deposit.