Section 192 requires every employer to estimate the employee's salary income for the full financial year, compute tax on it at the rates in force, and deduct that tax in equal (adjustable) instalments across the remaining payroll months. Unlike most TDS sections there is no flat rate — the deduction tracks the employee's actual slab liability, recomputed whenever salary or declarations change, with Sec 192(3) allowing later months to absorb any shortfall or excess.
The regime question comes first. Under Sec 115BAC(1A) the new regime is the DEFAULT: CBDT Circular 4/2023 directs employers to seek each employee's intended regime and, absent any intimation, deduct under new-regime rates. The employee's intimation binds payroll for the year but is not the final election — that is made in the return under Sec 115BAC(6). For FY 2026-27 (Budget 2026 made no change to the Finance Act 2025 structure) the new regime gives slabs of 0-4L nil / 4-8L 5% / 8-12L 10% / 12-16L 15% / 16-20L 20% / 20-24L 25% / above 24L 30%, a ₹75,000 standard deduction, and a Sec 87A rebate up to ₹60,000 that zeroes tax on taxable income up to ₹12 lakh (with marginal relief just above). Old-regime deductions — HRA, 80C, 80D, 24(b) — need supporting declarations in Form 12BB (Rule 26C).
For mid-year joiners, Sec 192(2) lets the employee report previous-employer salary and TDS in Form 12B; the new employer then computes tax on the AGGREGATE salary and deducts only the balance over the remaining months. Skipping Form 12B is the classic failure: each employer applies the standard deduction, basic exemption and rebate separately, and the employee faces a large self-assessment tax with interest at return time. Surcharge (10/15/25% in the new regime, up to 37% old) and 4% cess ride on top, with marginal relief at each threshold.
An employee joins on 1 October 2026 (6 payroll months left) at ₹9 lakh for the half-year. Form 12B shows ₹8 lakh taxable salary and ₹35,000 TDS from the previous employer. No intimation to opt out — new regime applies by default.
