📚 CBDT Circular · Annual salary-TDS guidance
Circular No. 3/2025 — Income-tax deduction from salaries during the financial year 2024-25 under section 192 of the Income-tax Act, 1961
In plain English
This is CBDT's yearly instruction to employers on how to deduct TDS from salary under Section 192 for FY 2024-25 (AY 2025-26). It treats the new tax regime as the default unless the employee opts for the old regime, and covers standard deduction, relief under Section 89, perquisites and Form 16. If you're salaried, your Form 16 and monthly TDS are based on this.
What it actually says
- Employers estimate each employee's salary for the year and deduct tax in monthly instalments under Section 192.
- The new regime (Section 115BAC) is the default; an employee who wants the old regime (80C, HRA, etc.) must intimate the employer.
- Standard deduction and declared eligible deductions are given effect; the employer may also consider other income/losses the employee declares.
- TDS is reported in Form 24Q and certified to the employee in Form 16.
Who this affects & what to do
For employers
Collect each employee's regime choice and proofs; deduct, deposit and issue Form 16 correctly.
For employees
Tell your employer your regime and declare investments early so TDS isn't over-deducted.
The law it touches
Section 192 Section 115BAC Section 89 Form 16 / 24Q
The official document
📄
Read the official CBDT circular (PDF)Official CBDT circular No. 3/2025 — opens the official PDF on incometaxindia.gov.in.
📄 View the PDF ↗
Our explanation is a plain-language summary for general understanding, not advice on your specific matter.
The official CBDT copy prevails. © EaseValue Advisors LLP.
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