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How does tax deduction operate in India?


A tax deduction is a changeable amount that can be subtracted, or deducted, from an assessee’s gross income, lowering the amount of tax paid. All entities in India (including foreign representative offices and Indian setups like wholly owned subsidiaries) are required to make tax deductions at source on employees’ salaries on behalf of the Income Tax Department.

The payment and compliance schedule is as follows:

  • Payment: 7th of the next month; April 30 for the month of March
  • Quarterly returns: 15th of the next month from the end of the quarter
  • Issue of Certificate: 30th of the next month; for salaried certificates, by May 30

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