Introduction to TDS:

TDS, or Tax Deducted at Source, is a portion of a person’s monthly income that is taxed as soon as it is received.It is applicable to all forms of income and is paid to the Indian Central Government. There are 27 sections under Tax Deducted at Source, each with a particular deduction provision and an exemption threshold. 

All businesses and individuals are required to pay Tax Deducted at Source because it falls under the Advanced Income Tax Act of 1961. The government uses the Tax Deducted at Source concept as a method to reduce tax evasion and collect money at the source. Salary, interest, rent, brokerage, professional services, etc. are all examples of sources of income.

By filing Form 26AS/Tax Deducted at Source certificate, you can obtain the difference back if Tax Deducted at Source in a fiscal year exceeds income tax liability. Receivers may be subject to greater Tax Deducted at Source on their income if they don’t provide a PAN card. The two most crucial documents for Tax Deducted at Source deposit are TAN and PAN.

Who can deduct?

An organisation is qualified to deduct from a bill paid if its books of account are audited and it is required to make payments under Tax Deducted at Source. Because they are not authorised to do so, individuals or HUFs are unable to deduct Tax Deducted at Source.

On or before the seventh day of every month, the deductor must deposit the Tax Deducted at Source in the government’s account. Tax Deducted at Source deduction rates vary depending on the goods and services.

When should it be deducted?

The explanation for why Tax Deducted at Source is taken can make the idea of when it is taken simpler. Tax Deducted at Source is a type of income tax that is levied immediately at the source of the income. As a result, paying a bill or an amount is the perfect time to deduct it.

What is the TDS rate of different types of payments?

Section and Nature of PaymentPayerApplicable Rate
Section 192, SalarySalaried individualApplicable Income Tax slab
Section 192A, Premature withdrawal of EPFIndividual10% of the total sum
Section 193, Interest amount on securitiesIndividual10%
Section 194, DividendsDomestic companies10%
Section 194A, Interest on assets & securitiesIndividuals except for taxpayers and HUF liable for audit10%
Section 194B, Applicable on money earned through any competition or lotteryIndividual30%
Section 194BB, Prize amount on winning horse raceAny individual30%
Section 194C, ContractorsIndividuals except for taxpayers and HUF liable for audit1% for individuals and HUF, 2% for other taxpayers
Section 194D, Insurance commissionInsurance aggregator5% for individuals and HUF and 10% for other agents
Section 194DA, Life insurance policyIndividual1%
Section 194E, Payments to a non-residential sportspersonIndividual20%
Section 194EE, Deposit under NSSIndividual10%
Section 194G, Commission from the sale of lottery ticketIndividual10%
Section 194H, TDS on commission or brokerage earnedIndividuals except for taxpayers and HUF liable for audit5%
Section 194I, TDS on rentIndividuals except for taxpayers and HUF liable for audit2% (from machines or equipment) or 10% (from land, buildings and furniture)
Section 194IA, TDS on funds earned for transfer of immovable assets (except agricultural land)Individual1%
Section 194IB, Rent by individuals & HUFIndividuals except for taxpayers and HUF liable for audit5%
Section 194IC, Payment on agreementIndividual10%
Section 194J, Royalty, professional or technical servicesIndividuals except for taxpayers and HUF liable for audit10%
Section 194LA, Compensation for acquisition of an immovable assetIndividual10%
Section 194LB, Income from infrastructure debt fund interestInfrastructure debt funds5%
Section 194LBA, Income from units of a business trustBusiness trusts10% for resident individuals and 5% for NRI

How to deposit TDS?

The idea of TDS is to withhold money at the point of source and pay it to the government. The steps for TDS deposit are as follows:

To make an online payment to NSDL, log in.

Go to the TCS/TDS area and choose Challan No. ITNS 281. Here, you must input your TAN, assessment year, PIN number, and payment method.

The TDS on regular assessment and the TDS deducted or payable options. “Submit” must be clicked.

A confirmation message will show up with the TAN and the taxpayer’s whole name as it appears in the master data.

This will take you to the payment page right away. Pay your bill over here.

A counterfoil containing the CIN, a payment confirmation, and the bank information will be provided as payment proof after a successful transaction. You must now submit a TDS return.

What is TDS return?

It is paying the taxpayer their excess TDS deduction back.

You might be wondering why, if TDS is a component of income tax, people still owe income tax at the end of every year even after paying it.

In order to prevent payment delays, you must recognise that TDS is tax deducted at the source of revenue. If your tax due is greater than the total TDS paid in a given year, the government will refund the difference.

You should ask your deductor how to obtain a TDS certificate in order to obtain this return. When submitting a TDS return, a TDS certificate is required.

When to file TDS return?

Form No.TDS Deducted on Transaction TypeDue Dates of Return Filing
24QSalaryQ1 – 31st July, Q2 – 31st October, Q3 – 31st January, Q4 – 31st May
27QAny payment to non-residents (not salary)Q1 – 31st July, Q2 – 31st October, Q3 – 31st January, Q4 – 31st May
26QBSale of property30 days from the end of the month of TDS deduction
26QCRent30 days from the end of the month of TDS deduction

How to file TDS return?

1. You must first log in to the Indian Government Income Tax Department’s website.

2. On the navigation bar, under the TDS tab, click “Upload TDS”.

3. Type in the details for the following statement, then click “Validate.”

Financial year Form name Quarter Upload type FVU version

4. You must now upload the TDS zip file. You must now provide a signature file or DSC. Click “Upload” after selecting all the files.

5. If the TDS is properly filed, you will receive a mail on the email address you provided and an SMS to the telephone number you provided.

By selecting View File TDS from the TDS option on the navigation bar, you may now see the filed TDS return.

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