Tax Deducted at Source(TDS)
The general rule is that the total income of an assessee for the previous year is taxable in the relevant assessment year. However, income-tax is recovered from the assessee in the previous year itself by way of TDS. The relevant provisions therein are listed below. (To be used for reference only.)
|
Section
|
Nature of payment
|
Threshold limit (up to which no tax is deductible)
|
TDS to be deducted
|
|
192
|
Salary to any person
|
Exemption limit
|
As specified for individual in Part III of I Schedule
|
|
193 2
|
Interest on securities to any resident
|
Subject to detailed provisions of given section
|
10%
|
|
194A 2
|
Interest (other than interest on securities) to any resident
|
Rs 10000 (for Bank/cooperative bank) & Rs 5000 otherwise
|
10%
|
|
194B
|
Winning from lotteries etc. to any person
|
Rs 10000
|
30%
|
|
194BB
|
Winning from horse races to any person
|
Rs 5000
|
30%
|
|
194C 2
|
Payment to resident contractors
|
Rs 30000 (for single contract) & Rs 75000 (for aggregate consideration in a financial year)
|
2% (for companies/firms) & 1% otherwise
|
|
194D
|
Insurance commission to resident
|
Rs 20000
|
10%
|
|
194E
|
Payment to non-resident sportsmen or sports association
|
Not applicable
|
10%
|
|
194EE
|
Payment of deposit under National Savings Scheme to any person
|
Rs 2500
|
20%
|
|
194G
|
Commission on sale of lottery tickets to any person
|
Rs 1000
|
10%
|
|
194H 2
|
Commission/brokerage to a resident
|
Rs 5000
|
10%
|
|
194-I 2
|
Rents paid to any resident
|
Rs 180000
|
2% (for plant, machinery, equipment) & 10% (for land, building, furniture)
|
|
194IA
|
Payment for Purchase of Immovable Property
|
Rs 5000000
|
1%
|
|
194J 2
|
Fees for professional/technical services; Royalty
|
Rs 30000
|
10%
|
|
194LB
|
Interest paid by Infrastructure Development Fund under section 10(47) to non-resident or foreign company
|
-
|
5%
|
|
195
|
Interest or other sums (not being salary, which is covered under section 192) paid to non-residents or foreign company except under section 115O
|
Amount as computed by the Assessing Officer on application made under section 195(2) or 195(3)
|
As per double taxation avoidance treaty or regular provisions of Income Tax Act, which is beneficial to the recipient
|
Notes:
1.No surcharge or education cess is deductible / collectible at source on payments made to residents (Individuals / HUF / Society / AOP / Firm / Domestic Company) on payment of incomes other than salary or wages.
2.TDS at higher rate of 20% or TDS rate, whichever is higher, has to be deducted if the deductee does not provide PAN to the deductor.(section 206AA)All persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain Tax Deduction or Tax Collection Account Number (TAN).
Point of Deduction of TDS
Salary :At the time of payment
Other Payments :When income paid or credited including credit to "Payable" or "Suspense" account.
Consequences of failure to deduct tax:
Interest - 1% of the tax deductible.
Penalty - equal to the amount of tax deductible but not deducted.
Due Dates for depositing TDS
Due Date for TDS Payment in case of Govt. Assessee:
| Sl. No. |
Particulars |
Due Date |
| 1. |
Tax Deposited without Challan |
Same Day |
| 2. |
Tax Deposited with Challan |
7th of next month |
| 3. |
Tax on perquisites opted to be deposited by the employer |
7th of next month |
Due Date for TDS Payment in case of Non-Govt Assessee:
| Sl. No. |
Particulars |
Due Date |
| 1. |
Tax Deductible in March |
30th April |
| 2. |
Other Months and Tax opted to be deposited by the employer |
7th of next month |
Consequences of default :
Interest @ 1.5% of tax not deposited is payable u/s 201(A).
Punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine under Section 276(B).
Issue of TDS Certificate :
1. Section 192 (TDS on Salary) :
The certificate on Form No.16 should be issued by the deductor by 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted.
2. In all other cases :
The certificate on Form No.16A should be issued within fifteen days from the due date for furnishing the "statement of TDS" under rule 31A.
Penalty on Failure to Issue TDS Certificate: Rs. 100/- every day for the period failure continues subject to a maximum of TDS amount.
Forms for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)
(a) Statement of deduction of tax under section 192 in Form No.24Q
(b) Statement of deduction of tax under sections 193 to 196D in :
1.Form No.27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and
2.Form No.26Q in respect of all other deductees.
As per section 208, every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of “advance tax” by following dates :
| Status |
By 15thJune |
By 15thSept |
By 15thDec |
By 15thMarch |
| Non-Corporate taxpayers |
Nil |
Upto 30% of advance tax |
Upto 60% of advance tax |
Upto 100% of advance tax |
| Corporate taxpayers |
Upto 15% of advance tax |
Upto 45% of advance tax |
Upto 75% of advance tax |
Upto 100% of advance tax |
|
Penal Provisions for failure / default in submitting returns /statements
|
|
Section 272A(2)
|
Failure to submit returns prescribed under Section 200(3)
|
Penalty of Rs. 100/- every day during
which the failure continues upto a
maximum of TDS amount.
|
|
Section 234E
|
Failure to TDS return in time
|
Fine of Rs. 200/- every day during which
the failure continues will be levied
on deductor as long as the default continues,
subject to a maximum of TDS amount.
|
|
Section 271H
|
(i) If deductor defaults for more than 1 year in filing TDS Statement
(ii) If deductor furnishes incorrect details like PAN, TDS amount, Challan particulars etc.
|
Penalty which shall not be less than ten
thousand rupees but which may extend to
one lakh rupees.
|