What is TDS?
TDS stands for 'Tax Deducted at Source'. It was introduced to collect tax at the source from where an individual's income is generated. The government uses TDS as a tool to collect tax in order to minimise tax evasion by taxing the income (partially or wholly) at the time it is generated rather than at a later date.
Usually, the person receiving income is liable to pay income tax. But the government with the help of Tax Deducted at Source provisions makes sure that income tax is deducted in advance from the payments being made by you.
When should TDS be deducted and by whom?
Any 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. But no TDS has to deducted if a person making the payment is an individual or HUF whose books are not required to be audited.
However, in case of rent payments made by individuals and HUF exceeding Rs 50,000 per month, are required to deduct TDS @ 5% even if the individual or HUF is not liable for a tax audit.
How TDS is deducted?
For most payments rates of TDS are set in the income tax act and TDS is deducted by payer basis these specified rates.
What is the due date for depositing the TDS to the government?
TDS deducted in the month of June must be paid to the government by 7th July. However, the TDS deducted in the month of March can be deposited till 30th April. For TDS deducted on rent and purchase of property, the due date is 30 days from the end of the month in which TDS is deducted.
Interest on delayed of payment of TDS?
Interest will be levied at 1% for every month or part of a month for Delay In Deduction and at 1.5% for every month or part of a month for Delay In Remittance After Deduction.
Note: Interest should be calculated on monthly basis not on day basis.
Due date for filing of TDS Return?
| For Quarter Ending on | 31st July |
|---|---|
| 30th June | 31st October |
| 30th September | 31st October |
| 31st December | 31st January |
| 31st March | 31st May of next financial year |
Penalty on Non filing of Return?
The amount of Penalty is Rs 200 per day till the default continues . (Maximum Amount of Penalty is up to the Amount of TDS Deducted).
What is 26 AS?
TDS has been deducted from any of your income you must go through the Tax Credit Form 26AS. this form lists out the details of TDS deducted on your income by each deductor for all kinds of payments made to you – whether those are salaries or interest income – all TDS linked to your PAN is reported here.
