Tax deduction at source on salaries: standard deduction increased and house rent allowance ceiling removed for the fiscal year.

Deduction of tax at source from salaries under section 192 continues to be made at the average rates in force, with employers obliged to compute deductions using those rates and applicable exemptions/deductions; deductors remain liable for failures to deduct or remit tax. The Finance Act, 1986, left basic deduction rates unchanged but increased the standard deduction (subject to a statutory maximum) and removed the fixed monthly ceiling on house rent allowance, and the circular provides advisory guidance and points of contact for clarification.

---

---

---