<h1>Salary Arrears from 2006-2008: TDS Deducted Only on Actual Payment per Section 192, Not Entire Amount.</h1> The Department of Expenditure clarified that salary arrears for the period January 1, 2006, to August 31, 2008, should be paid in two installments, with the first being 40% of the total arrears. The Central Board of Direct Taxes (CBDT) addressed queries on whether Tax Deducted at Source (TDS) should be applied to the entire arrears or just the 40% installment. According to Section 192 of the Income Tax Act, TDS should only be deducted from the arrears actually paid during the financial year 2008-09. The remaining balance will be taxed in the year it is paid.