TDS (Tax Deducted at Source) is an indirect system of deduction of tax according to the Income Tax Act, 1961 at the point of generation of income. Tax is deducted by the payer and is remitted to the government by him on behalf of the payee.
TDS (Tax Deducted at Source) is an indirect system of deduction of tax according to the Income Tax Act, 1961 at the point of generation of income. Tax is deducted by the payer and is remitted to the government by him on behalf of the payee.
Frequently Asked Questions
TDS means Tax Deducted at Source. It is the amount deducted from payments of various kinds such as salary, contract payment, commission etc. This deducted amount can be adjusted against the tax due of the deductee.
TDS is not required to be deducted by Individuals and HUF except for those whose accounts are required to be audited u/s 44AB i.e. whose gross receipts in preceding financial year in case of business is more than 2 crore (AY 2017-2018) or 1 crore ( AY 2016-2017) and in case of profession 50 lakhs ( AY 2017-2018) or 25 lakhs (AY 2016-2017).
Form 24Q -TDS on Salaries
Form 26Q – TDS on payments other than Salaries
Form 27Q – TDS on payments made to Non-Residents
Form 27EQ – TCS
Following table gives the types of payments, threshold limits and the rates at which TDS is to be deducted.
| Section | Particulars | TDS Rates in % | Threshold limits |
|---|---|---|---|
| 192 | Salary | As per the rates of Income Slab | As per the rates of Income Slab |
| 192A | Payment of accumulated balance of provident fund which is taxable in the hands of an employee | 10 | – |
| 193 | Interest on securities | ||
| a) Interest on Securities | 10 | Nil | |
| b) Interest on Debentures; | 10 | Nil | |
| 194 | Dividend (other than the listed companies) |
10 | Nil |
| 194A | Income by way of interest other than interest on securities | 10 | Rs. 5,000 |
| 194B | Winnings from lotteries/ puzzles/card games. | 30 | Rs. 10,000 |
| 194BB | Income by way of Winnings from horse races | 30 | Rs. 5,000 |
| 194C | Payment to contractor/sub- contractor
a) HUF/Individuals b) Others |
1
2 |
Rs. 30,000 |
| 194D | Insurance commission | 5 | Rs. 20,000 |
| 194DA | Payment in respect of life insurance policy | 1 | – |
| 194EE | Payment of NSS Deposits | 10 | Rs. 2,500 |
| 194F | Payment on account of repurchase of unit by Mutual Fund or Unit trust of India | 20 | Nil |
| 194G | Commission on sale of lottery tickets | 5 | Rs. 1,000 |
| 194H | Commission or brokerage | 5 | Rs. 5,000 |
| 194-I | Rent a) Plant & Machineryb) Land or building or furniture or fitting |
2
10 |
Rs. 1.8 lakhs |
| 194-IA | Payment on transfer of certain immovable property other than agricultural land | 1 | – |
| 194-IB | Payment of rent by individual or HUF not liable to tax audit | 5 | – |
| 194-IC | Payment of monetary consideration under Joint Development Agreements | 10 | – |
| 194J | Any sum paid by way of
|
10 | Rs. 30,000 |
| 194LA | Payment of compensation on acquisition of certain immovable property | 10 | Rs. 1 lakh |
| 194LBA | Income distribution by a Business Trust u/s 115UA | 10 | – |
| 194LBB | Income distribution by a Investment Fund u/s 115UB | 10 | – |
| 194LBC | Income distribution by a Securitisation Trust u/s 115TCA | 25% in case of Individual or HUF 30% in case of other individual | – |
| Any other Income | 10 | – |
E-payment is compulsory for all Corporate assesses & non-corporate assessees who are liable for audit u/s 44AB.
Physical payment can be made using Challan 281 in authorised bank branch.
Every person deducting tax as per provisions of section 203 is required to issue a certificate to the payee in respect of tax deducted by him along with certain other particulars. This certificate is called TDS Certificate. Even banks deducting TDS on pensions issue TDS certificates.
Types of TDS certificate to be issued in different cases:
Salaries: Certificate is to be issued in Form 16 containing details of TDS Payment, tax deducted at source and tax calculation based on which TDS was estimated. The certificate should be issued within 31st May of next financial year.
Non Salary Payments: Certificate is to be issued in Form 16A containing details of payment and tax deducted at source. The certificate should be issued within 15 days of due date of filing the return.
TCS: Certificate to be issued in Form 27D containing the Tax Collected & Paid details.
Failure to issue certificate will result in penalty of Rs. 100 for every day the failure continues but limited to the TDS amount.
Every person deducting tax as per provisions of section 203 is required to issue a certificate to the payee in respect of tax deducted by him along with certain other particulars. This certificate is called TDS Certificate. Even banks deducting TDS on pensions issue TDS certificates.
Types of TDS certificate to be issued in different cases:
Salaries: Certificate is to be issued in Form 16 containing details of TDS Payment, tax deducted at source and tax calculation based on which TDS was estimated. The certificate should be issued within 31st May of next financial year.
Non Salary Payments: Certificate is to be issued in Form 16A containing details of payment and tax deducted at source. The certificate should be issued within 15 days of due date of filing the return.
TCS: Certificate to be issued in Form 27D containing the Tax Collected & Paid details.
Failure to issue certificate will result in penalty of Rs. 100 for every day the failure continues but limited to the TDS amount.