TDS Rules and Regulations

TDS or Tax Deducted at Source is a mandatory deduction from the receivable income of an individual.
TDS was initially introduced to broaden the spectrum of tax payers and create an environment where
tax can be deducted on the receivable income. TDS deduction is irrespective of the type of
employment, one could be a self employed individual or a paid employee at a firm.

The tax is deducted under various rules and regulations laid down by the Government of
India under IT act, for example:

 TDS payments are supposed to be made to Central Government within stipulated timeframe,
which is one week from the last day of deductions made.
 Issuance of form 16 or TDS certificates within stipulated timeframe.
 Filing of quarterly TDS returns
 An individual responsible for TDS deduction requires TAN NO. (Tax Deduction Account
Number)along with filing of Annual Return of income.
 Tax is calculated and deducted as per the current rates published by the government.
 As per the amended rule a new form 17 is needed to be submitted for the TDS deducted after
or on, 2009-10-06.
 In the event of lapse in making deductions within stipulated timeframe, certain penalties are
levied.

Under TDS following items can be viewed for deduction:

 Rental fee on movable or immovable items

 Salary (up to a certain bracket)/bonus/incentives
 Interest on fixed deposits etc
 Commission earned through insurance/sale/brokerage
 Profit from shares/UTI/mutual funds/financial bonds
 Money earned through lotteries/contests/sports etc
 Income earned through compensation/professional consultancy etc.

There are several exemptions applied to TDS under various sections, to name a few:

Saving investments like Public Provident Fund, Life/Medical insurance premium, Retirement plans,
interest on house/education loan, donation given to certified NGO/prime minister relief fund, Tuition
fee and house rent.
What is the difference between tds and income tax?
if we calculate tds thn do v hve to calculate income tax?

Best Answer - Chosen by Voters

TDS is Tax Deducted at Source. It is a part of income tax. If your income exceeds the taxable income
limit, your employer will deduct tax every month provisionally or at the end of financial year from your
salary itself. At the end of financial year when you file IT return, you have to calculate the final Income tax
payable by you for the whole year. If it exceeds the TDS, you have to pay byn Challan in Bank. If the IT
falls short of that collected by your employer you can claim refund from the IT department.
Source(s):
A part of my income tax is deducted at source from my salary. The remaining i have paid through Challan
in bank and i filed IT return enclosing Form-16 (showing TDS) and a copy of challan.

Excise duty is levied by central govt & it is charged on the spot on production value of goods in the factory
premises only. Without the payment of excise duty, goods are not allowed to go out of manufacturing
premises.

Tds is tax deducted at source. It is again a central govt levy & comes under Income Tax dept. It has been
introduced to minimise the possibility of tax evasion. Hence any payment out of gainful intention is
subjected to deduction of tax at the source of payment.

Vat is value added tax. It comes under state govt purview & it is in lieu of sales tax. Sales tax was
chargeable at first point of sale, but there were many loopholes in its application & recovery. Now vat is
applicable at every point of sale & is recoverable after wards till goods are sold at final point of sale i.e. to
the end user.
Source(s):
work experience.