TaxTMI 
TaxTMI 
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?
TDS on Bonus.
07 May 2013 
3 Replies 
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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. (AI Summary)
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. (AI Summary)