| Obtaining Tax Deduction Account Number (TAN) |
Computation of Monthly TDS |
| Monthly Deposit of TDS Electronically< | Issue of TDS Certificate(Form 16 / Form16A (Per Form)> |
| Filling of Quarterly TDS Return (Per Quarter Per Return) | Filling Of Correction Statement |
TDS is Tax Deducted at Source. The meaning of TDS is clear from its name i.e. income is taxed at the point of its generation itself. In simple words, TDS is retaining a part of income (which you receive) as tax and depositing it with the Income Tax Department on your behalf. So, its like pay as and when you earn. TDS can also be commonly said as Withholding Tax.
Further, it is to be noted that deduction of TDS doesnt exempt you from the requirement of filing of ITR. If your income exceeds the basic exemption limit then
irrespective of the fact whether TDS has been deducted or not you have to file ITR. Let us understand it with the help of below example where TDS is calculated on salary income.
For e.g. Lets say you earn a total salary of Rs.6,00,000 (i.e. Rs.50,000 per month) and have no other income in F.Y 18-19. Now, as your GTI exceeds basic exemption limit (of Rs.2,50,000), tax liability will occur at the time of filing of your return. Now, to understand the concept of TDS, we will consider 2 cases: One when TDS is deducted and one without TDS u/s 192.
| S.No. | TDS Section | Nature of Payment | Payer (Deductor) | Payee (Deductee) | Rate of TDS | Exemption Limit (No TDS to be Deducted upto threshold limit mentioned) |
|---|---|---|---|---|---|---|
| 1 | Section 192 | TDS on Salary | Any Person | Employee(R or NR) | Applicable Income Tax Slab Rates | Basic GTI exemption limit of Rs.250000 or Rs.Rs.00000 or Rs.500000 as the case may be. |
| 2 | Section 192A | TDS on Premature Withdrawal from Provident Fund | Any Person | Employee | 10% (If no PAN then MMR i.e. 35.535%) | Amount is less than Rs.50000 |
| 3 | Section 193 | TDS on Interest on Securities | Any Person | Any Resident Person | 10% | Upto Rs.5000 in a financial year (FY) for Individual/HUF in the case of Debentures. |
| 4 | Section 194 | TDS on Dividends | Domestic Company | Resident Person | 10% | Upto Rs.2500 in a FY (for Individual) |
| 5 | Section 194A | TDS on Interest (Other than Interest on Securities) | Any Person(Other than Individual/HUF not liable to tax audit in last PY) | Resident Person | 10% | Up to Rs.10,000 (for payments made by banks, cooperative banks or on post office deposits) and up to Rs.5000 (for other cases). [In case of a senior citizen, the limit of Rs 10,000 shall increase to Rs. 50,000 w.e.f. 1.4.2018] |
| 6 | Section 194B | TDS on Winnings from Lottery or Crossword Puzzles | Any Person | Any Person | 30% | Up to Rs.10000 |
| 7 | Section 194BB | TDS on Winnings from Race Horses | Any Person | Any Person | 30% | Up to Rs.10000 |
| 8 | Section 194C | TDS on Payment to Contractors | Any Person(Other than Individual/HUF not liable to tax audit in last PY) | Any Resident Person | 1% (for Individual/HUF) 2% (other person) |
Up to Rs.30000 for individual payment. Up to Rs.100000 for total amount during a FY. Payment to a contractor in course of business where he declares through a PAN that he owns 10 or less good carriages during the year. |
| 9 | Section 194D | TDS on Insurance Commission | Insurance Company | Resident Agent | 5% (for Individual/HUF) 10% (other person) |
Up to Rs.15000 during FY |
| 10 | Section 194DA | TDS on Payment in Respect of Life Insurance Policy | Any Person | Any Resident Person | 1% | Less than Rs.100000 |
| 11 | Section 194E | TDS on Payments to Non-Resident Sportsmen or Sports Association | Any Person | NR- -Sportsmen -Sports Association -Entertainer |
20% | No exemption limit. |
| 12 | Section 194EE | TDS on Payment for Deposit Under NSS | Any Person | Any Person | 10% | Upto Rs.2500 |
| 13 | Section 194G | TDS on Commission on Sale of Lottery Tickets | Any Person | Any Person | 5% | Upto Rs.15000 |
| 14 | Section 194H | TDS on Commission or Brokerage | Any Person(Other than Individual/HUF not liable to tax audit in last PY) | Any Resident Person | 5% | Up to Rs.15000 |
| 15 | Section 194I | TDS on Rent | Any Person(Other than Individual/HUF not liable to tax audit in last PY) | Any Resident Person | 2% (on rent paid for use of machinery, plant or equipment) 10% (other cases) |
Up to Rs.180000 during the FY |
| 16 | Section 194IA | TDS on Payment on Transfer of Immovable Property (Not Being an Agricultural Land) | Any Person (Other than person referred to in section-194LA) | Any Resident Person | 1% | Less than Rs.50,00,000 |
| 17 | Section 194IB | TDS on Payment of Rent by Certain Individuals or HUF | Individual & HUF(Other than covered u/s 194 I) | Any Resident Person | 5% | Upto Rs.50000 per month |
| 18 | Section 194 IC | TDS on Payment Made Under Specified Agreement | Any Person | Any Resident Person | 10% | No exemption limit |
| 19 | Section 194J | TDS on Fees for Professional or Technical Services | Any Person(Other than Individual/HUF not liable to tax audit in last PY) | Any Resident Person | 10% 2% (in case of payment made to the business of operating a call centre). |
Up to Rs.30000 during FY (the separate limit for each kind of payment) |
| 20 | Section 194LA | TDS on Payment of Compensation on Acquisition of Certain Immovable Property | Any Person | Any Resident Person | 10% | Upto Rs. 2,50,000 |
| 21 | Section 194LB | TDS on Income by way of Interest from Infrastructure Debt Fund | Infrastructure Debt Fund | NR or Foreign Co. | 5% | No exemption limit |
| 22 | Section 194LBA | TDS on Certain Income from Units of a Business Trust | Business Trust | Unit Holder being Resident or Non resident | 10% (for resident) 5% ( for non-resident). |
No exemption limit |
| 23 | Section 194LBB | TDS on Income in Respect of Units of Investment Fund | Investment Fund | Unit Holder being Resident or Non resident | 10% (for resident) For non-resident person the tax rate will be as per the rates in force during FY. |
No exemption limit |
| 24 | Section 194LBC | TDS on Income in Respect of Investment in Securitisation Trust | Securitisation Trust | Investor being Resident or Non resident | 25%(for individual or HUF) or 30% (for any other person) | No exemption limit |
| 25 | Section 194LC | TDS on Income by way of Interest from Indian Company | Specified Indian company or Business Trust | Non-resident | 5% | No exemption limit |
| 26 | Section 194LD | TDS on Income by way of Interest on Certain Bonds and Government Securities | Any Person | Foreign Institutional Investor or Qualified Foreign Investor | 5% | No exemption limit |
| 27 | Section 195 | TDS on Other Payments Made to NR (Not Company) or Foreign Company | Any Person | NR or Foreign Company | Rate as specified in Act or DTAA | No exemption limit |
Different forms have been prescribed for filing TDS returns depending upon the nature of the TDS deduction, such as
| FORM | PARTICULARS |
|---|---|
| Form 24Q | Quarterly statement for tax deducted at source (TDS) from Salaries |
| Form 26Q | Quarterly statement for tax deducted at source in respect of all payments except salaries |
| Form 27Q | Quarterly statement of deduction of tax from interest,dividend or other sum payable to non residents. |
| Form 26QB | It is a challan cum statement of deduction of tax u/s 194-IA. |
| Form 26QC | It is a challan cum statement of deduction of tax u/s 194-IB. |
| Form 27EQ | Quarterly statement of collection of tax at source (TCS) |
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