overview of tds
Post on 14-Apr-2017
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OVERVIEW OF TDS
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.
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.
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.
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.
192 TDS on Salaries
Slab rate applicableBasis of estimated income
193 Interest on Securities
10000 if income from 8% Saving bonds5000 if interest on DebenturesResponsible any person issuing security
No TDS if:Securities is in DMAT formListed on Stock Exchange
194A Any interest other than interest on Securities10000 if Payer is Banking Company,
Co-Operative Society or Deposit with Post Office
5000 in other caseResponsible any person other than
Individual or HUF10%20%
194B Winnings from Lottery, Crossword Puzzle or Television Game1000030%
194BB Winnings from Horse Race500030%
194C Payment in Pursuance of any ContractResponsible Person Liable to get their
Books AuditedPayee is Individual or HUF 1%Other person 2%Contract exceeds 30000Total in a year with same contractor or
sub-contractor exceeds 75000
No TDS ifPayee is Transport operator and
Furnished his PAN to Payer
194D Insurance Commission
20000 10% 20%
194E payment to non-resident sportsman Nil 20%
194EE Sum out of National Savings Scheme u/s 80CCALimit 250020%
194F Repurchase relevant of units covered u/s 80CCBNil20%
194G Commission or Prize relating to Lottery tickets100010%Stocking, Purchasing or Selling Lottery
tickets
194H Commission or Brokerage
5000Other than individual and HUF10% PAN furnished20% PAN not furnished
194-I Rent
1,80,000Responsible other than individual and
HUF2% Machinery & Plant10% Land, Building, Furniture and
Fittings
194J Fees for Professional or Technical Services30000Responsible other than individual and
HUF10% PAN furnished20% PAN not furnish
194LA Immovable property acquisition compensationNot applicable for agricultural land2,00,000 ( w.e.f. 1-7-2012)Any resident10%
195 Any sum paid to non-resident or foreign companyRate as per Double Tax Avoidance
Agreement (DTAA) with that Country
Consequences of not deductingor 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.
THANK YOU
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