circular no. 3/2025 income tax deduction from salaries during the financial year 2024 25 under section 192 of the income tax act 1961

F. No. 275/107/2024-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
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CIRCULAR NO : 3/2025
North Block, New Delhi
Dated the 20th February, 2025

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2024-25 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.
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Reference is invited to Circular No. 24/2022 dated 07.12.2022, whereby the rates of deduction of income-tax from the payment of income under the head "Salaries" under section 192 of the Income-tax Act, 1961 (hereinafter referred to as ' the Act '), during the financial year 2022-23, were intimated. The said Circular also explained certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter referred to as 'the Rules').

The present Circular contains the amendments made vide the Finance (No.2) Act of 2024, Finance (No. 1) Act of 2024 and Finance Act of 2023 in respect of rates of deduction of income-tax from the payment of income under the head "Salaries" under section 192 of the Act. Where no amendments have been made by the above referred Acts, in such cases, the above referred Circular No. 24 of 2022 shall continue to be applicable for F.Y. 2024-25. The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in.

Amendments made vide the Finance (No.2) Act of 2024, Finance (No. 1) Act of 2024 and Finance Act of 2023 in respect of rates of deduction of income-tax from the payment of income under the head "Salaries" under section 192 of the Income-tax Act,1961, during the financial year 2024-25

1. The term "Salary" has been defined in section 15 of the Act. It has been further explained in section 17. As per the amendment in section 17(1) of the Act vide the Finance Act, 2023, "salary", inter alia, includes the following:

"ix) the contribution made by the Central Government in the previous year, to the Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme referred to in section 80CCH; ... "

2. As per the amendment vide the Finance Act, 2023 in section 17(2) of the Act, "perquisite", inter alia, includes the following:

"(i) The value of rent-free accommodation provided to the employee by his employer [computed in such manner as may be prescribed);
(ii) The value of any accommodation provided to the assessee by his employer at a concessional rate .... "

3. As per the amendment vide Finance (No.2) Act, 2024, the provisions related to Surcharge (under Old Tax Regime) applicable in the case of every individual are as under:

4. As per the amendment vide Finance (No.2) Act, 2024 in respect of section 115BAC, the rates of income tax (under New Tax Regime) for the FY 2024-25 (i.e. Assessment Year 2025-26) are as under:

Further, for the purposes of sub-section (1A) of section 115BAC, the total income of the person shall be computed-

• (i) without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14)(other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub-section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA.
• (ii) without set off of any loss,-
  • (a) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i);
  • (b) under the head "Income from house property" with any other head of income;
• (iii) by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed; and
• (iv) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force.

5. As per the amendment made vide Finance (No.2) Act, 2024, section 192(2B) is reproduced as under:

" ....... (2B) Where an assessee who receives any income chargeable under the head "Salaries" has, in addition, -

(i) any income chargeable under any other head of income (not being a loss under any such head other than the loss under the head "Income from house property"); or

(ii) any tax deducted or collected under the provisions of Part B or Part BB of this Chapter, as the case may be,

for the same financial year, he may send to the person responsible for making the payment referred to in sub-section (1), the particulars of-

(a) such other income;

(b) any tax deducted or collected under any other provision of Part B or Part BB of this Chapter, as the case may be; and

(c) the loss, if any, under the head "Income from house property ",

in such form and verified in such manner as may be prescribed, and thereupon the person responsible as aforesaid shall take into account the particulars referred to in clauses (a), (b) and (c) for the purposes of making the deduction under sub-section (1):

Provided that this sub-section shall not in any case have the effect of reducing the tax deductible from income under the head "Salaries", except where the loss under the head "Income from house property" and the tax deducted in accordance with other provisions of Part B and tax collected in accordance with the provisions of Part BB of this Chapter, has been taken into account. ]