TDS (Tax Deducted at Source) is an indirect system of deduction of tax according to the Income Tax Act, 1961 at the point of generation of income. Tax is deducted by the payer and is remitted to the government by him on behalf of the payee.
A TDS Return is a quarterly statement which has to be submitted to the Income Tax Department of India. Submitting TDS Return is mandatory if you are a deductor. It has details of TDS deducted and deposited by you.
It is the duty of the person who is making payment to someone for specified goods and services to deduct TDS and file TDS return. The specified payments include salaries, interests, commissions, brokerages, professional fee, royalty, contract payments, etc. The person who deducts TDS is called deductor and the person whose tax is being deducted is called deductee.
TDS is not required to be deducted by Individuals and HUF except for those whose accounts are required to be audited u/s 44AB i.e. whose gross receipts in preceding financial years in case of business is more than 2 crores (AY 2017-2018) or 1 crore ( AY 2016-2017) and in case of profession 50 lakhs ( AY 2017-2018) or 25 lakhs (AY 2016-2017).
Every person deducting taxes as per provisions of section 203 is required to issue a certificate to the payee in respect of taxes deducted by him along with certain other particulars. This certificate is called TDS Certificate. Even banks deducting TDS on pensions issue TDS certificates.
Types of TDS certificate to be issued in different cases:
Failure to issue certificate will result in penalty of Rs. 100 for every day the failure continues but limited to the TDS amount.
Different types of TDS forms are as follows :-
Following table gives the types of payments, threshold limits and the rates at which TDS is to be deducted.
|Section||Particulars||TDS Rates in %||Threshold limits|
|192||Salary||As per the rates of Income Slab||As per the rates of Income Slab|
|192A||Payment of accumulated balance of provident fund which is taxable in the hands of an employee||10||Rs. 50k|
|193||Interest on securities|
|a) Interest on Securities||10||Rs 10,000|
|b) Interest on Debentures;||10||Rs 5000|
(other than the listed companies)
|194A||Income by way of interest other than interest on securities
|194B||Winnings from lotteries/ puzzles/card games.||30||Rs. 10,000|
|194BB||Income by way of Winnings from horse races||30||Rs. 10,000|
|194C||Payment to contractor/sub- contractor
|194D||Insurance commission||5||Rs. 15,000|
|194DA||Payment in respect of life insurance policy||1||–|
|194EE||Payment of NSS Deposits||10||Rs. 2,500|
|194F||Payment on account of repurchase of unit by Mutual Fund or Unit trust of India||20||Nil|
|194G||Commission on sale of lottery tickets||5||Rs. 15,000|
|194H||Commission or brokerage||5||Rs. 15,000|
a) Plant & Machinery
b) Land or building or furniture or fitting
|Rs. 2.4 lakhs|
|194-IA||Payment on transfer of certain immovable property other than agricultural land||1||Rs. 50 Lakhs|
|194-IB||Payment of rent by individual or HUF not liable to tax audit||5||Rs. 50,000|
|194-IC||Payment of monetary consideration under Joint Development Agreements||10||–|
|194J||Any sum paid by way of
If payee call center
|194LA||Payment of compensation on acquisition of certain immovable property||10||Rs. 2.5 lakh|
|194LBA||Income distribution by a Business Trust u/s 115UA||10||–|
|194LBB||Income distribution by a Investment Fund u/s 115UB||10||–|
|194LBC||Income distribution by a Securitisation Trust u/s 115TCA||25% in case of Individual or HUF 30% in case of other individual||–|
|Any other Income||10||–|
Due dates of submission of quarterly TDS Return is 31st July for Q1, 31st October for Q2, 31st January for Q3, and 31st May for last quarter.