Tax Deducted at Source

income-tax

What is TDS

What is TDS ?

Tax Deducted at Source

 

TDS  ( Tax Deducted at Source)  A person who is (deductor) who makes payment to any other person (deductee) shall deduct TDS and balance can be paid to deductee. The TDS should be deposited with Bank and informed to taxation authorities on quarterly basis.  This is called TDS Return, which should  be filed mandatory by every deductor.

 

 

TDS   is income tax reduced from amount paid to payee on  specified payments such lime rent,   professional fees, salary, interest, contract payment, salary etc.  Deductor will deduct TDS and issue TDS certificate.

 

TDS in simple words?

As per the Income Tax Act, any company or person making a payment shall deduct TDS tax   if the payment exceeds certain  limits. TDS shall be deducted at the rates applicable from time to tome

TDS example?

Let us take an example of TDS   XYZ Ltd makes a payment of Rs 60,000/- as professional fees to Mr. A Advocate, then XYZ Ltd shall deduct a tax of Rs 6,000/- and make a net payment of Rs 54,000/- to Mr. Advocate.

 

TDS Rates Applicable from 01-4-21

TDS rates are given below, TDS rates keep changing from time to time, hence students should refer the latest Income Tax rates.

Given below are the TDS rates applicable from April 1, 2021:

 

    

Covid Rates

Type of Payment

 

Rate (%)

Applicable 01.04.2020 to 13.05.2020

 Rates from 14.05.2020 to 31.03.2021

Section 192: Payment of salary 

    
     

Section 193: Interest on securities.

 

10

10

7.5

     

Section 194: Dividend other  Than Section 115-O

 

10

10

7.5

     

Section 194B: Income by Lottery

 

30

30

30

     

Section 194C: Payment to contractor/sub-contractors.

    

a)   HUF/Individuals

 

1

1

0.75

b)   Others

 

2

2

1.5

Section 194-I: Rent on

    

a) Plant & Machinery

 

(a) 2

(a) 2

1.5

b) Land  Building  > 2.4 lacs pa.

 

(b) 10

(b) 10

7.5

     

Section 194-IA:  purchase of  immovable property 

 

1  

1

0.75

     

Section 194 – IB: Rent paid by individual   exceeding 50K p.m.

  

5

3.75

     

Section 194J: Any sum paid by way of: Professional Fee

    

(a) Individual and HUF

 

10

10

7.5

(b) Others

 

25

25

18.75

  

30

30

22.5

Section 194M: Certain payments by Individual/HUF (Limit – 50 Lakhs)

 

5

5

3.75

     

Section 194N:Payment of certain amount in cash (Limit 1 Crore)

 

2

2

2

–  The amount is more than Rs.20 lakh but up to Rs. 1 crore

    

–  The amount exceeds Rs. 1 crore (Applicable from 01.07.2020)

 

2

2

  

5

5

Section 194O: Applicable for e-commerce  (Applicable from 01.10.2020)

 

1

0.75

     

 

What are types of TDS Certificates ?

 

TDS Certificate          Payment Types                                                         When Issued

 

Form 16                       TDS on the payment of salary                         Yearly

Form 16 A                   TDS on non-salary payments                                     Quarterly

Form 16 B                   TDS on sale of property                                              Every transaction

Form 16 C                   TDS on rent                                                                 Every transaction

                                                         

 

Can I get TDS refund?

TDS Refund can be claimed if TDS are greater than actual tax liability of any Financial Year., you can claim TDS refund for the extra amount deducted.

 

What is TDS return filing?

TDS Return is a quarterly information to be given by the deductor to Income Tax Department. … The TDS Return  includes details like the PAN number of the deductor & the deductees, all sections and relevant code of payment, date of payment, BSR Code, date of deposit TDS, Challan Number, CIN (Challan Identification Number)

 

 

Who is eligible for TDS return?

TDS return should be  filed by corporates who have valid Tax  Deduction Account Number (TAN). Any person making payments in excess of the limits prescribed under the I-T Act should deposit TDS and file TDS return within the time specified by law.

 

TDS deducted on Payment of Salary

 TDS deducted on payment  of “Income on Securities”

TDS deducted lottery, puzzles and others

 TDS deducted on Rent, Professional Fee payments.

 

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