Q&A

Employers are required to withhold tax on various payments including rent, interest, dividend, royalty, and service income. In this sense, the compliance requirements for employers are more complex in India than in any other countries explored. Businesses should actively coordinate with employees to understand the details of supplementary income they are receiving and make the relevant calculations and submission of tax before deducting them from the salary. Quarterly witholding tax return statements must also be submitted by the 15th of every month following the end of the quarter to the central government reporting the tax deducted at source during the quarter. Failure to meet either this deadline or the monthly IIT deposit deadline can result in both interest and penalties being imposed on a company.