TDS deduction under the new tax regime raises statutory conflict with legislated withholding rates and creates employer compliance burdens.
The statutory scheme requires employers to deduct tax from salary at the rates in force for the financial year as specified by the Finance Act. A departmental circular allowing withholding based on an employee's election of the new tax regime conflicts with those legislated rates, imposes additional compliance obligations on employers to obtain declarations and compute withholding accordingly, and therefore lacks clear statutory authorization despite potential benefit to many employees. (AI Summary)