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, processional fees, interest, rent, etc.
Now, let’s have a look at the TDS Tax Rates
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 in respect of 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.
Under section 203 of the Income Tax Act, the tax deductor requires to issue a TDS certificate to the deductee within a stipulated period of time. This certificate is a 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 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 certificates in this case should be issued in FORM 16A containing the tax deducted and tax paid. For each section, separate certificates should be issued for certificates. This refers to the details submitted in Form 26Q and Form 27Q.
|Month||Quarter||Due date for payment of TDS challan||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|
Late filing fee
U/S 234E, an individual has to pay a fine of Rs 200 per day as long as the return is not filed. The total penalty computed should not exceed the total amount of tax deducted.
|Section||Nature of Default||Amount of Interest||Time Period|
|210 A||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 actually deducted|
|After deduction of tax, non-payment of tax either in whole or in part||1.5% per month||From the date of Non-deduction the date of payment|
Prosecution (Section 276B):
If a person fails to pay the credit of the Central Government-
The Tax deducted at source by him as required by or under the provisions of Chapter XVII-B, he shall be punishable with rigorous imprisonment for a term which shall not be less than 3 months and may be extended to 7 years along with fine.
Penalty (Sec 234E): Deductor will be liable to pay way of fee Rs. 200 per day till the failure to pay TDS continues. However, penalty should not exceed the amount of TDS for which statement was required to be filed.
Penalty (Sec 271H): Assessing officer may direct a person who fails to file the statement of TDS within due date to pay penalty minimum of Rs. 10, 000 which may extended to Rs. 1, 00,000.
Penalty under this section is in addition to the penalty u/s 234E.
This section will also cover the cases of incorrect filing of TDS return.
U/S 271H, no penalty will be charged if the following conditions are satisfied:
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