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

[Sanjay Lunia]

Dear Member,

If you have a valid TDS challan, you can use it to report both employees from whom tax has been deducted and those from whom no tax has been deducted.

In case you do not have any challan and your employees require Form 16 at the end of the financial year, you may consider paying a nominal amount of Rs. 100/- as TDS. You can then allocate Rs. 10/- per month against employees where no tax deduction is applicable. This ensures that all employees are covered in the TDS returns and you will be able to generate Form 16 for them at year-end.

Hope this clarification helps.

Thank you

[TANAY GHILDIYAL]

Yes I agree with Mr. Sanjay. Adding on I will recommend yo add those from whom no tax has been deducted in the final TDS return for FY 2025-26 i.e. 24Q - Q4. This will also serve your purpose. 

AI Summary

Reporting employees with no TDS: use a valid challan or nominal payment, or defer to the final quarterly return.
Employers may report employees with no tax deducted in the 24Q TDS return by using an existing valid payment challan to include both deducted and non-deducted employees; if no challan exists, employers may make a nominal TDS payment and allocate token amounts so those employees are reportable and eligible for Form 16, or defer reporting such employees until the final quarterly TDS return.