TDS

TDS

TDS

Tax deducted at source is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest etc. by the persons making such payments.

Usually, the person receiving income is liable to pay income tax. But the government with the help of Tax Deducted at Source provisions makes sure that income tax is deducted in advance from the payments being made by you. The main purpose of implementing TDS is to check tax evasion.

 

For Example Jai Ambe Pvt Ltd paid professional fees of Rs.50000 to its chartered accountant. Now Jai Ambe Pvt Ltd is under an obligation to deduct TDS at source @ 10% i.e Rs.5000. This tds amount is required to be deposited with government and balance amount of Rs.45000 will be paid to chartered accountant.

When should TDS be deducted and by whom?

Any person making specified payments (list mentioned below) mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited. The person need to apply for TAN  before deducting and depositing TDS with the government.

However, in case of rent payments made by individuals and HUF exceeding Rs 50,000 per month, are required to deduct TDS @ 5% even if the individual or HUF is not liable for a tax audit. Also, such Individuals and HUF liable to deduct TDS @ 5% need not apply for TAN

What is the due date for depositing the TDS to the government?

The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month. i.e Any tds for the month of December must be deposit upto 7th of Jan otherwise it will attract interest.

 

 

How to deposit TDS?

Tax Deducted at Source has to be deposited using Challan ITNS-281 on the government portal.

 How and When to file TDS returns?

Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS. TDS return is to be submitted quarterly and various details need to be furnished like TAN, amount of TDS deducted, type of payment, PAN of deductee, etc. Also, different forms are prescribed for filing returns depending upon the purpose of the deduction of TDS. Various types of return forms are as follows:

Form No Transactions reported in the return Due date
Form 24Q TDS on Salary

 

Q1 – 31st July

Q2 – 31st October

Q3 – 31st January

Q4 – 31st May

Form 26Q TDS on all payments except salaries Q1 – 31st July

Q2 – 31st October

Q3 – 31st January

Q4 – 31st May

Form 26QB TDS on sale of property Within 30 days from the end of the month in which TDS is deducted
Form 26QC TDS on rent Within 30 days from the end of the month in which TDS is deducted

 

 

 

Rates of TDS

      Individual / HUF TDS Others TDS
Section Nature of Payment Threshold Rs Rate (%) Rate (%)
192 Salaries Basis on Slab
193 Interest on Securities/ Debentures 10,000 10 10
194A Interest (Banks)/ For Senior Citizen Rs. 50000 40,000 10 10
194A Interest (Others) 5,000 10 10
194B Winning from Lotteries 10,000 30 30
194BB Winning from Horse Race 10,000 30 30
194C Contractor – Single Transaction 30,000 1 2
194C Contractor – During the F.Y. 1,00,000 1 2
194C Transporter (44AE) declaration with PAN      
194D Insurance Commission (15G – 15H allowed) 15,000 5 10
194DA Life insurance Policy 1,00,000 1 1
194G Commission – Lottery 15,000 5 5
194H Commission / Brokerage 15,000 5 5
194I Rent of Land and Building – F&F 2,40,000 10 10
194I Rent of Plant / Machinery / Equipment 2,40,000 2 2
194IB Rent by Individual / HUF (wef 01.06.2017) 50000/PM 5
194IA Transfer of certain immovable property other than agriculture land 50,00,000 1 1
194J Professional Fees / Technical Fees / etc. 30,000 10 10

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