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When must an employer ordinarily deduct income-tax at source from salary under section 392(1) of the Income-tax Act, 2025?

Question and options

When must an employer ordinarily deduct income-tax at source from salary under section 392(1) of the Income-tax Act, 2025?

  1. When the employment contract is signed

  2. On 31 March, regardless of payment date

  3. When salary first accrues

  4. When salary is paid

Answer and explanation

Correct answer: D - When salary is paid

Section 392(1) requires the person paying salary to deduct tax at the time of payment. This differs from most payments under section 393, where tax is deducted at credit or payment, whichever is earlier; for salary, accrual alone does not trigger deduction.

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