Is TDS deducted on bonus and arrears of salary?

Question

tdsguru.in (CA firm) · Accepted Answer

Yes — bonus and arrears are taxable salary and TDS is deducted in the month they are paid or credited; relief under Section 89 for arrears can be given by the employer on the employee's declaration. Bonus, incentives and salary arrears are part of taxable salary, so TDS under Section 192 is deducted in the month of payment or credit, usually by spreading the additional tax over the remaining months. Where arrears relate to earlier years, the employee can claim relief under Section 89(1) (with Form 10E), and the employer may give effect to it in the TDS computation if the employee furnishes the declaration.