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CS Executive · Tax Laws and Practice · Income under the Head Salary

Under section 392(6)(b) of the Income-tax Act, 2025, an employer's contribution with interest in an approved superannuation fund is paid to an employee. Who deducts tax on it?

The trustees of the approved superannuation fund deduct the tax, to the extent provided in paragraph 7 of Part B of Schedule XI. Section 392(6)(b) places this duty on the trustees when the employer's contribution with interest is paid to the employee.

  1. AThe trustees of the fund, to the extent provided in paragraph 7 of Part B of Schedule XICorrect
  2. BThe employer, at the average rate on estimated salary
  3. CThe employee, by paying advance tax only
  4. DNo one, because such payments are never taxable

Explanation

Section 392(6)(b) states that tax on the amount paid from an approved superannuation fund is deducted by the trustees of the fund, to the extent provided in paragraph 7 of Part B of Schedule XI. The employer's average-rate deduction under section 392(1) is not the mechanism here.

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