TDS on Bonus.

[Pratyush Parashar]

Dear Sir,

Company declares performance bonus in the month of June'13 for the Financial Year 2012-13. What would be the tax treatment (TDS) for this bonus? Whether TDS is deducted for the FY 2012-13 or FY 2013-14?

[Guest]

Dear Sir

If the amt of bonus liability determined in March 13 ,we should deduct TDS & deposit by April 13 ,file our return by 15th May 13 & may actually pay in June 13

However if there is no TDS liability for Bonus then we can book the liability even for 2012-13 in June 13

but if there is TDS liability then also we can book it but the return may either be late sent or they will be revised & expense booked for 2012-13

[Deepak Whorra]

This reply does not answer the question but raises more issues

[sanjeev bajaj]

Performance Bonus  to employees is part and parcel of Salary assessable under the Head  "Income under the head Salary" hence tds has to be made u/s 192,of the Income Tax Act, 1961 which allows the deduction of tax at the time of payment.

Hence, TDS at the time of payment

AI Summary

TDS on salary: employer must withhold tax on bonus at time of payment, with timing dictated by liability determination. Bonus payable to employees is taxable as Income under the head Salary and subject to withholding tax deducted at the time of payment under the salary TDS provisions. If the bonus liability is determined before the fiscal year-end, the employer should deduct, deposit and report TDS according to regular timelines; if determined only at payment, TDS is required at payment and employers may need to book the liability or revise returns to reflect the earlier-year obligation.