# Employer Salary TDS & Form 16

> Employers must estimate each employee's annual tax under the regime the employee chooses, deduct TDS monthly, deposit it by the 7th of the next month, file quarterly salary TDS returns (Form 138 from tax year 2026-27, formerly 24Q) and issue the annual salary TDS certificate (formerly Form 16) by 15 June. Mistakes lead to employee notices, interest and late fees for the employer.

Practice: Salary, RSU & ESOP Tax — https://www.industax.com/services/employee-tax/

We run salary TDS for small and mid-sized employers: collecting regime choices and declarations, verifying proofs, valuing perquisites, handling previous-employer income and TCS credits, and filing returns and certificates.

From April 2026 the forms and section references changed under the Income-tax Act, 2025, so payroll software and templates need updating.

## Key facts

| Item | Detail |
| --- | --- |
| Deposit | 7th of next month (30 April for March) |
| Quarterly return | Form 138 (formerly 24Q) |
| Certificate | By 15 June after year-end |
| Late filing fee | ₹200 per day, capped at TDS |
| Interest | 1% / 1.5% per month for delays |

## Who needs this

- Startups and SMEs with salaried staff
- Employers switching payroll providers
- Employers with TDS defaults to fix

## What's included

- Monthly TDS computation
- Declaration and proof management
- Quarterly returns
- Annual certificates

## Documents

- Salary register
- Employee declarations and proofs
- TAN and TRACES access

## Process

1. **Collect** — Declarations and proofs gathered.
2. **Deduct** — Monthly TDS computed and deposited.
3. **Report** — Returns and certificates filed.

## FAQs

### Which regime should employers apply by default?

The new regime, unless the employee declares the old regime. The employee can still choose differently in their ITR.

### Should employers consider TCS collected from employees?

Yes. Employees can now ask employers to account for TCS (for example on foreign remittances) and TDS on other income while computing salary TDS.

### What if an employee changes jobs mid-year?

The new employer should take the previous employer's salary and TDS into account if the employee declares it, to avoid under-deduction.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/

---
Canonical page: https://www.industax.com/services/employee-tax/employer-tds-form-16
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.