Tax Deducted at Source (TDS) is a mechanism that has been introduced by the Income Tax Department. Under this, the responsible person is supposed to deduct a certain percentage of tax before making the payment to the receiver. The payment includes salary, commission, professional fees, interest, rent, etc.
ABC Ltd. makes a payment of 50,000 INR by the way of fees to Mr. X. In this case, the company shall deduct a tax amounting to 5,000 INR. The net payment will be 45,000 INR. This amount will then be deposited to the Government’s account by ABC Ltd.
Every person who is responsible for making payment of nature covered under the TDS provisions of Income Tax Act, 1961 shall be liable to deduct tax at source. In case of payments made u/s 194A, 194C, 194H, 194I and 194J, all assesses other than individual and HUF whose accounts are not subject to Tax Audit Under Section 44AB of the Income-tax Act, 1961 during the preceding financial year, is required to deduct tax at source.
* If an individual/HUF (who is not required to deduct tax u/s 194C, 194H or 194J) paid more than Rs. 50 lakh during the year to a resident then section 194M is applicable and tax is required to be deducted at the rate of 5% on such payment.
Under section 203 of the Income Tax Act, the tax deductor requires to issue a TDS certificate to the deductee within a stipulated period. This certificate is proof regarding the deduction and payment of the respective TDS amount to the bank. The deductee needs to produce the details of the certificate during the regular assessment of income tax for the adjustment of the TDS amount against the tax payable by the deductee or assesse.
In this case, the certificate should be issued in FORM 16 containing details like computation, deductions, and payment of taxes. This refers to the details submitted in Form 24Q.
The certificate, in this case, should be issued in FORM 16A containing the tax deducted and tax paid. For each section, separate certificates should be issued. This refers to the details submitted in Form 26Q and Form 27Q.
TDS in case of Section 194IA:
The certificate, in this case, should be issued in FORM 16B containing the amount of property, tax deducted amount and address of the property, etc. For each seller, a separate certificate should be issued.
TDS in case of Section 194IB:
The certificate, in this case, should be issued in FORM 16C containing the amount of rent, tax deducted amount and address of the property, etc. For each landlord, a separate certificate should be issued.
TDS in case of Section 194M:
The certificate, in this case, should be issued in FORM 16D containing the amount of payment, tax deducted amount and nature of the transaction, etc.
The certificate, in this case, should be issued in FORM 27D containing the tax collected and paid. This refers to the details submitted in Form 27EQ.
A step by step guide to filing TDS returns online
|Month||Quarter||The due date for payment of TDS challan||The due date for filing of return for all deductors|
|For Govt. sector||For other deductors|
|April||30th June||7th May||31st July|
|July||30th September||7th August||31st October|
|October||31st December||7th November||31st January|
|January||31st March||7th February||31st May|
|March||7th April||30th April|
– The tax deducted/collected at source is paid to the credit of the Government.
– Late filing fees and interest (if any) is paid to the credit of the Government.
– The TDS/TCS return is filed before the expiry of a period of one year from the due date specified in this behalf.
|Section||Nature of Default||Amount of Interest||Period|
|201(1A)||Non-deduction of tax at source, in whole or in part||1% per month||From the date on which tax is deductible to the date on which tax is deducted|
|After deduction of tax, non-payment of tax either in whole or in part||1.5% per month||From the date of deduction to the date of payment|
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MOST RESPECTED SIR,
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With due respects,
I want to about TDS proper processes how to generate the challan and from where deposit the TDS amount etc.
so i want to any helpline no.
Very well written blogs, The Complete Guide Of TDS and tax filing
First a fall, congratulations. I appreciate your efforts. Informative and user-readable. I loved reading your article. Thank you for sharing this valuable information with us.
What is the new rate of TDS on rent if paid by Bank to an individual
The person other than Individual or HUF who is responsible for paying any income to a resident by way of rent is liable to deduct tax at source under section 194-I of the income tax act 1961 at the rate of 10 % for the use of any land or building or land appurtenant to a building or furniture or fittings and at the rate of 2% for the use of any machinery or plant or equipment if whole amount of such rent for the year exceeds 240000. Any individual / HUF who is not liable to tax audit under section 44AB paying rent to a resident exceeding Rs. 50,000 per month or part of a month are also liable to deduct TDS @ 5% under section 194-IB.
In the given case we are assuming that rent is paying to a resident individual for the use of land and/or building hence if, whole amount of the rent payable for the year exceeds Rs. 2,40,000 then TDS is deductible at the rate of 10%.
Great Article. Its really informative and useful. keep posting with latest updates. Thanks for sharing.
ABC Ltd. providing service to y ltd and the value of service is 95,000/- and this service is only one time… is it required to deduct tds 1.5% u/s 194c.
As per section 194C of the Income-tax Act, 1961, Any person who is responsible for paying any sum to any resident contractor for carrying out any work in pursuance of a contract, is required to deduct tax at source. Tax is to be deducted at the time of payment or at the time of credit of such sum to the account of the payee, whichever is earlier. Tax is required to be deducted when the amount credited or paid exceeds Rs. 30,000 in a single payment or Rs. 1,00,000 in the aggregate during the financial year. Tax is required to be deducted at the rate of 1% (if recipient is individual or HUF) or 2% (if recipient is any other person).
In the given case, single amount credited to the account of payee exceeds the limit of Rs. 30,000, so tax is required to be deducted u/s 194C in this given scenario. ABC Ltd. (i.e. recipient) is come under the category of other person to determine the rate of TDS, so 2% tax is required to be deducted from the payment. However, Due to Covid-19 situation, the rates of TDS on payments made to resident Indian has been reduced by 25% for the period starting from 14th May, 2020 to 31st March, 2021. If your transaction date is coming between 14/05/2020 to 31/03/2020 then applicable rate of TDS is 1.5% in the given case.
hi whether such kind of relaxation apply on lower deduction certificate also.
Section 197 of the Income-tax Act, 1961 allows the deduction of tax at lower rate or NIL rate. In order to avail this benefit assessee whose income would be liable for deduction of tax, needs to make an application in Form 13 to the assessing officer having jurisdiction over the assessee.
On receipt of the application the assessing officer may grant the certificate for deduction of tax at lower rate or NIL rate on the basis of total income of the assessee and the estimated tax liability.
Due to Covid-19 situation, the rates of TDS on payments made to resident Indian has been reduced by 25% for the period starting from 14th May, 2020 to 31st March, 2021. However, this reduced rate would not applicable for the assessee paying tax at lower rate on the basis of Form 13 furnished to the assessing officer.