Business

Everything You Need To Know About TDS

What Is TDS?

TDS stands short for Tax Deduction at Source. There are companies that provide taxation services amongst others for organizations as well as individuals. As stated in the Income Tax Act, any person or a company is required to deduct tax at source while making payments if it exceeds certain specified limits. TDS is to be deducted at the prescribed rates that the tax department sets.

The person or the company that makes the payments after the deductions of TDS is called a deductor, and the person or company that receives the payment is termed as the deductee. It is the responsibility of the deductor to cut the TDS before making the payment and deposit the same to the government.

Tax Deducted at Source is deducted irrespective of the mode of payment, that is through cash, cheque or credit. Further, it is also linked with the PAN of both the deductor and deducted.  Some of the payments for which tax will be deducted are rent, professional fee, salary, commission, interest, consultation fee, and so on.

However, a person or company is not required to cut TDS while paying fees or making payments to professionals such as doctors and lawyers. Tax Deduction at Source (TDS) is a kind of advance tax.

It is deposited with the government at regular intervals (periodically) and is to be done so by the deductor. As per the deductee, they can claim the TDS in the form of returns or tax refund by filing an ITR (Income Tax Returns).

What Is TDS Return?

The deductor has to deposit the deducted money from TDS to the government, and these details are to be filed in the form of a TDS return. TDS is generally filed quarterly. Further, different types of TDS have to be filed through different TDS return forms respectively.

Filing a Tax Deduction at Source (TDS) returns is compulsory for all those who have deducted TDS. Some important details that should be included are TAN, type of payment, amount of TDS deducted, PAN of the deductee, and so on.

Form 24Q – TDS on salary

  • Q1 – 31st July
  • Q2 – 31st October
  • Q3 – 31st January
  • Q4 – 31st May

Form 26Q – TDS on all payment except salaries

  • Q1 – 31st July
  • Q2 – 31st October
  • Q3 – 31st January
  • Q4 – 31st May

Form 26QB – TDS on sales property – To be paid 30 days from the end of the month in which TDS is deducted.

Form 26QC – TDS on rent – To be paid 30 days from the end of the month in which TDS is deducted.

What Is A TDS Certificate?

A TDS certificate has to be issued by the person deducting TDS to the assessee whose income TDS is deducted while making the payment.

TDS certificates include Form 16, Form 16A, Form 16B, and Form 16C.

  • Form 16 is the certificate of TDS on salary payment that is due 31st May every year.
  • Form 16A is the certificate of TDS on non-salary payments that are to be paid quarterly, 15 days before the due date of filing return.
  • Form 16B is the certificate of TDS on sale of property that is due 15 days from due date of filing return during every transaction.
  • Form 16C is the certificate of TDS on rent that is due 15 days from the due date of filing return during every transaction. If you are finding it difficult to do all these, there are many accounting services company in India that will take care of all your tax related issues.

Leave a Comment

Your email address will not be published.

You may also like