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Overview of TDS
- 2. What is TDS Tax Deduction at Source or TDS is one of the modes of collecting Income-tax. In simple terms, TDS is the tax getting deducted from the person receiving the amount (Employee/Deductee) by the person paying such amount (Employer/Deductor). The tax so deducted at source by the payer, has to be deposited in the Government treasury to the credit of Central Govt. within the specified time. The tax so deducted from the income of the recipient is deemed to be payment of Income-tax by the recipient at the time of his assessment. It is always considered as an Advance tax which is paid to the government.
- 3. Who shall deduct tax at source Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax. However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds Rs.1 crore or Rs. 25 Lakhs respectively in previous year, he is required to deduct tax at source.
- 4. These persons are mainly: Principal Officer of a company for TDS purpose including the employer in case of private employment DDO (Drawing & Disbursing Officer), In case of Govt. Office any officer designated as such. In the case of "interest on securities" other than payments made by or on behalf of the Central govt. or the State Government, it is the local authority, corporation or company, including the Principal Officer thereof.
- 5. Tax must be deducted at the time of payment in cash or cheque or credit to the payee's account whichever is earlier. Self declaration in Forms 15G and 15H can be filed by the Deductee if his income doesn't exceed the amount chargeable to tax. This self declaration can be filed for dividends, interest and mutual fund income only. In these cases no tax has to be deducted.
- 6. 192 TDS on Salaries Slab rate applicable Basis of estimated income
- 7. 193 Interest on Securities 10000 if income from 8% Saving bonds 5000 if interest on Debentures Responsible any person issuing security No TDS if: Securities is in DMAT form Listed on Stock Exchange
- 8. 194A Any interest other than interest on Securities 10000 if Payer is Banking Company, Co- Operative Society or Deposit with Post Office 5000 in other case Responsible any person other than Individual or HUF 10% 20%
- 9. 194B Winnings from Lottery, Crossword Puzzle or Television Game 10000 30% 194BB Winnings from Horse Race 5000 30%
- 10. 194C Payment in Pursuance of any Contract Responsible Person Liable to get their Books Audited Payee is Individual or HUF 1% Other person 2% Contract exceeds 30000 Total in a year with same contractor or sub- contractor exceeds 75000
- 11. No TDS if Payee is Transport operator and Furnished his PAN to Payer
- 12. 194D Insurance Commission 20000 10% 20% 194E payment to non-resident sportsman Nil 20%
- 13. 194EE Sum out of National Savings Scheme u/s 80CCA Limit 2500 20% 194F Repurchase relevant of units covered u/s 80CCB Nil 20%
- 14. 194G Commission or Prize relating to Lottery tickets 1000 10% Stocking, Purchasing or Selling Lottery tickets
- 15. 194H Commission or Brokerage 5000 Other than individual and HUF 10% PAN furnished 20% PAN not furnished
- 16. 194-I Rent 1,80,000 Responsible other than individual and HUF 2% Machinery & Plant 10% Land, Building, Furniture and Fittings
- 17. 194J Fees for Professional or Technical Services 30000 Responsible other than individual and HUF 10% PAN furnished 20% PAN not furnish
- 18. 194LA Immovable property acquisition compensation Not applicable for agricultural land 2,00,000 ( w.e.f. 1-7-2012) Any resident 10%
- 19. 195 Any sum paid to non-resident or foreign company Rate as per Double Tax Avoidance Agreement (DTAA) with that Country
- 20. Consequences of not deducting or not paying the amount of TDS If any person has not deducted tax at source Interest shall be charged @1% p.m./part of the month for the period starting from the date when tax was deductible up to the date when tax was deducted. If any person has deducted tax at source but it was not paid within the prescribed time period, Interest shall be charged at a rate of @1.5% p.m./part of the month for the period when tax was deducted at source up to the date of payment.
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