TDS or Tax Deducted at Source is income tax deduct from the money at the time of making payments like rent, commission, professional fees, salary etc. by the persons who is making such payments to any person
Normally, the person who is receiving the money or income is liable to pay income tax. But the government with the help of TDS provisions makes sure that income tax is deducted in advance basis to ensure that payments being made.
The recipient of income receives the net amount (after reducing TDS).then he/she can claim the deduction from the tax which already paid as a name of TDS from the gross income tax.
Any person making certain payments mentioned under the IT Act are required to deduct TDS at the time of such payment. But there is no obligation to deduct TDS if any person making the payment to any individual or HUF whose books are not fall under to be audited.
but as an exception,rent paid by individuals and HUF exceeding Rs 50,000 per month, are need to less TDS @ 5% even if the individual or HUF is not required to be audited. And for this they don't need to apply for TAN.
If you are in job so your employer deducts TDS at the income tax slab rates applicable to you.
Banks deduct TDS @10%. may deduct @ 20% if you don't disclose your PAN.
3.When TDS need to deduct?
At the time of payment or
2. At the time crediting the A/C of payee
Whichever is earlier
But in following cases TDS deducted only at the time of payments:
c. Maturity of life insurance policy
d. Compensation on compulsory acquisition of property
The TDS should be deposited to the government by 7th of the subsequent or next month.
TDS deducted in the month of may should be paid to the government by 7th of june. However, the TDS deducted in the March can be deposited till 30th April. This grace period is given to entity for finalization of accounts.
The due date of TDS on rent and purchase of property, is within 30 days from the end of the month in which TDS is deducted at the time of payment
5. How to deposit TDS?
TDS need to be deposited by using Challan no ITNS-281 on the portal.:-
6. How and When to file TDS returns?
Filing TDS is mandatory for all who have deducted TDS at the time of payment. TDS return is a quarterly return and need to be furnished prescribe details like TAN, amount of TDS deducted, type of payment, PAN etc. Also, different forms are there to file return depending on the type of TDS are as follows:
6. What is a TDS certificate?
there are some specified certificates like Form 16, Form 16A, Form 16 B and Form 16 C . TDS certificates have to be issued by a person who is deducting TDS from you or any other person . As an example
Banks issue Form 16A to the depositor when TDS is deducted on interest from fixed deposits if depositor dont give 15G or 15H form.
Form no 16 is issued by the employer to the employee.
7. TDS credits in Form 26AS
It is important to understand how TDS is linked to your PAN. TDS deductions are linked to PAN numbers for both the deductor and deductee. If TDS has been deducted from any of your income you should get Tax Credit in Form 26AS.
This form is a
consolidated tax statement which is available to all PAN holders. Since all TDS
is linked to your PAN, this form lists out the details of TDS deducted on your
income by each deductor for all kinds of payments made to you – whether those
are salaries or interest income – all TDS linked to your PAN is reported here.
This form also has income tax directly paid by you – as advance tax or selfassessment tax. Therefore, it becomes important for you to mention your PAN
correctly, wherever TDS may be applicable on your income.