TDS(Tax Deducted at Source)

TDS (Tax Deducted at Source) is the amount of tax that is deducted at the time any transaction is undertaken. There are various transaction on which the tax is deducted at the source only, including rent, commission, salary, interest by the persons undertaking such transaction.  With the provision of TDS (Tax Deducted at Source) tax is deducted by the government at its source only which helps in preventing the tax evasion by the multiple people. In order to know the correct amount of tax to be deducted and take its credit at the time of making final payment it is vital that the applicant must become familiar with all the aspects of TDS. Through the course of this blog we will be taking a look at the different aspects of TDS in India.

What is TDS(tax deducted at Source)

Lawdef- What is TDS(tax deducted at Source)

What is TDS?

TDS or Tax Deducted at Source is the amount that is deducted from the income at the time income is generated rather than the later date at which the tax is supposed to be due. The tax collected at the specified time is deposited to the account of government at the same time it is collected. Different rate of TDS is applicable to different class of people and to different items.

How does TDS operates?

The person who is making the payment also known as the deductee is responsible for deducting the certain percentage of tax as specified by the government at the time of making the payment and then depositing the same with the government.  The person receiving the income will get the certificate for the TDS deducted from the amount to receive with which he can claim this TDS (Tax Deducted Source) amount paid by him for the financial year it was deducted.  The person paying the TDS is called the deductee.  Once the TDS is successfully deposited  this amount reflects in the FORM 26 AS of the individual deductee present on the TRACES website linked with the income tax department.

What are the current TDS rates Applicable?

The current TDS rates applicable for financial year 2019-2020 are as follows-

Nature of IncomeRelevant SectionTDS rate for Indian ResidentsTDS rates for Non- Residents
Salary IncomeSec 192According to the income tax categoryAccording to the income tax category
Income from wining the horse racesSec 194 BB30 %30%
Income received from wining the card games, lotteries and other games.Sec 194B30%30%
Income from National Savings scheme DepositsSec 194EE10%10%
Income received from repurchasing the units by the UTI or the mutual fundsSec 194 F20%20%
Income received from lottery tickets sales commissions and other transactionsSec 194G5%5%
Income received by the unit holder from investment fundSec 194LBB10%30%
Income received from investments made in securitization trustSec 194LBC25%30%

 

Is there a way to avoid the deduction of GST?

There exists a certain exemption limit within which the TDS is not applicable. The person seeking the exemption can file the form 15G/15H and ask the deductor to not deduct the TDS from his income.

What is the due date for depositing the TDs with government?

The last date for depositing the TDS with government is 7th of the subsequent month in which TDS become due.

How can I deposit the TDS?

In order to deposit the TDS in India the applicant is required to visit the official website at onlineservices.tin.egov-nsdl.com select the challan no ITNS 281 and fill the required details.  In order to process the submission of TDS(Tax Deducted at Source) it is mandatory for the applicant to hold a valid TAN.

Conclusion

Once you have made the payment of TDS make sure to get the credit for it by following the proper procedure for it.