What is the TDS (Tax Deducted at Source)?

Tax deducted at source in India is a means of collecting tax on income, dividends or asset sales by requiring the payer to deduct tax due before paying the balance to the payer under the India income tax act of 1961, income tax must be deducted at source as per the provisions of the income tax act.

Ex- income, rent, commission, professional fee, salary, interest etc.


When the TDS will get deducted?

If you are making any sort of payment specified under the income tax act, then TDS will be deducted at the time of these payments ,However no TDS (Tax Deducted at Source) will be deducted if you are an individual or Hindu undivided family (HUF) and your books are not required to be audited.

Why the TDS (Tax Deducted at Source) will be Deducted?

The concept of TDS (Tax Deducted at Source) was introduced with an aim to collect tax from the very source of income. As per this concept a person deducted who is liable to make payments of specified nature to any other person deducted shall deduct tax at source and remit the same into the account of the central government. The deducted from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basic of from 26A or TDS certificate issued by the reductor.

When and how should a TDS return be filed?

   All individuals who have deducted TDS must file Tax Deducted at Source returns. TDS returns are to be submitted quarterly, and various details need to be furnished, like the TAN, amount of TDS deducted, type of payment, PAN of the deducted, etc. Also, different forms are prescribed for filing returns depending on the purpose of the TDS deduction. The various types of return forms are as follows: Form 26QTDS on all payments except salaries. July 1st, Q1-31. Q2—31st October Q3—31st January Q4—31st May



How much TDS (Tax Deducted at source) will be deducted?

Income tax slabs

TDS Deductions

Tax Payable

Up to 2.5 Lakh

Nil

Nil

2.5 Lakh to 5 Lakh

10%

25,000

5 Lakh to 6.33 Lakh

20%

26,600

 What is TDS Return?

  • Form 26Q (payments other than salary)
  • Form 27Q (payments made to non-residents Indian other than salary)
  • Due dates for filling TDS Return
  • Government entities – July 31st, October 31th, January 31th and may 15th   
  • Non-government entities – July 15th, October 15th, January 15th and may 15th