Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Average-rate method
Annual tax on estimated income divided across 12 months, adjusted as the year progresses.
Deposit and 24Q
Deposit by the 7th of the next month; file Form 24Q each quarter. Confirm dates.
Regime choice, declarations and adjustments
The estimate at the heart of Section 192 depends on the employee’s chosen tax regime: from each employee you take a declaration at the start of the year of whether they opt for the new or old regime and, if old, their proposed investments and eligible deductions (80C, 80D, home-loan interest, HRA and so on). You compute the year’s tax on that basis and spread it across the months. As the year unfolds you adjust — for a mid-year raise, a bonus, or proofs of investment that differ from what was declared — recalculating the remaining months so the right total is deducted by March. Other income the employee reports to you, and TDS already suffered, can be factored in. Deposit by the 7th of the next month (a special rule applies for March), file Form 24Q quarterly, and the figures flow into the employee’s Form 16 and 26AS. Collecting investment proofs before the last quarter avoids an awkward spike in the final months’ deductions, and confirming each employee’s regime early prevents a year-end recomputation.