Subject: Clarification on Reporting Employees in 24Q1 Salary TDS Return for FY 2025-26 (Employees Earning Above ?4 Lakhs, New Tax Regime)

[Rajagopal K]

Dear Experts,

I would be grateful for your guidance on a specific query related to the 24Q1 Salary TDS Return for FY 2025-26, particularly in relation to employees whose annual salary exceeds Rs. 4 Lakhs but is below Rs. 12 Lakhs, under the new tax regime.

As per the current tax guidelines, TDS is generally deducted for employees earning above Rs. 12 Lakhs annually. However, for employees earning between Rs. 4 Lakhs and Rs. 12 Lakhs, no TDS is deducted as their income is below the threshold for deduction.

Further, according to the TDS Return schema, there should be at least one valid payment challan reported. For example:

Mr. A: Salary exceeds Rs. 12 Lakhs annually (monthly salary of Rs. 1 Lakh). TDS of Rs. 10,000 is deducted per month (as per applicable slab).

Mr. B: Salary is more than Rs. 5 Lakhs but less than Rs. 12 Lakhs annually (Rs. 6 Lakhs / Rs. 50,000 per month), and no TDS is deducted, as no tax is applicable.

My question is:

1. How should we report employees like Mr. B, whose salary exceeds Rs. 4 Lakhs but is below Rs. 12 Lakhs, in the 24Q1 Salary TDS Return, even if no TDS is deducted?

Would they still need to be reported, considering the schema requires at least one valid payment challan? If so, what is the correct way to handle these cases?.

I would greatly appreciate your clarification on this matter.

Thank you so much for your time and expertise!

Warm regards

AI Summary

Report employees earning Rs. 4-12 Lakhs without TDS in 24Q1 Salary TDS Return using challan or nominal payment Employees earning between Rs. 4 Lakhs and Rs. 12 Lakhs annually under the new tax regime, from whom no TDS is deducted, should still be reported in the 24Q1 Salary TDS Return. If a valid TDS challan exists, it can be used to report both employees with and without tax deductions. In the absence of a challan, a nominal TDS payment (e.g., Rs. 100) can be made, and a small amount allocated monthly to employees without tax deduction to ensure their inclusion in the TDS return. Alternatively, such employees can be reported in the final TDS return for the financial year. This approach enables proper reporting and issuance of Form 16 at year-end for all employees.