TDS

Tax Deduction at Source

Prepared By:
Visharad Shukla
 Contents
1. Introduction
2. Basics
3. Deduction of Tax
4. Due Dates
5. TDS Payments
6. Return Filing
7. Fees/Interest/Penalty
8. TDS Certificate
 Introduction
●It is not another type of Tax rather a way of collection of

Income tax.
●A form of advance tax.

●This concept was first in 2004 on the

introduced
principle of “pay as you earn”
(who makes
●Onus of compliance on Payer the
expenditure) instead of actual
i.e assesse
taxpayer under Income Tax Act 1961.
 Basics
Payer deducts tax from payment/credited

Payer deposit tax to Govt

Payer file Return of TDS

Payer issues TDS Certificate to Payee

Payee claims refund of TDS in his ITR

●TAN (Tax deduction Account Number): Every
deductor/payer to obtain TAN except who deduct Tax on
payment for property purchased.
●Composition of TAN: DELH90468K

●Form 49B to be submitted at any TIN-FC (Charges-Rs.

62)
●TAN is used in any TDS related matters (such as

Return/TDS Deposit).
 Deduction of Tax
●Tax has to be deducted @ specified in relevant section.

●Deductor must have PAN of Payee.

●Tax has to be deducted at higher rate (i.e.20 %) in case

non-availability of PAN (Section 206AA).

●Non deduction/Lower Deduction u/s 197/197A

●Form 15G/15H- Self declaration

●Form 13 – Certificate from AO

●Non deduction of TDS of any payment made to

RBI, Govt., Corporation by central act.

● Section 192 (TDS on Salary):
●Rate: Average rate of Tax payable for FY

●Limit: As per the applicable rates

●Deduction at the time of payment/credit every month

●Amount of Tax:

●estimated tax for FY/12 month

●For the month of March=Actual Tax Payable-Tax Paid

●Consider: Salary from previous employer & Income from

other sources
●Salary means Salary as under section 17.
●Section 193 (TDS on Interest on Securities):
●Rate:@ 10%

●Limit:

●On debenture- Rs. 5,000

●On others- Rs. 10,000

●Deduction at the time of credit or payment whichever

is earlier.
●Exempt from provision: NDDB, NSC, Gold
Bonds, Govt securities
●Section 194 (TDS on Deemed Dividend):
●Rate:@ 10%

●Limit: Rs. 5,000.

●Deduction at the time of credit or payment whichever

is earlier.
●Deemed dividend as under section 2(22)(e).
●Section 194A (TDS on Interest other than securities):
●Rate:@ 10%

●Limit:

●For banking co.-Rs. 10,000

●For other –Rs. 5,000

●Deduction at the time of credit or payment whichever

is earlier.
●Section 194B (TDS on lottery/CrosswordnPuzzle):
●Rate:@ 30%

●Limit:- Rs. 10,000

●At the time of payment/credit in cash or kind

●Section 194BB (TDS on Winnings from Horse Race):

●Rate:@ 30%

●Limit:- Rs. 5,000

●Section 194C (TDS on Contracts):
●Rate:

●Transporter with valid PAN @ 0%

●Individual/HUF @ 1%

●Others @ 2%

●Limit:

●Any single sum credited/paid >= Rs. 30,000 or

●Total Sum credited/paid during FY >= Rs. 75,000

●Deduction at the time of credit or payment whichever

is earlier.
●Section 194D (TDS on Insurance Commission):
●Rate: @ 10%

●Limit: RS. 20,000

● Section 194E (TDS on NR Sport Person/Association):

●Rate: @ 20%

●Amount: Any payment made

● Section 194EE (TDS on Withdrawals from NSS):

● Rate: @ 20%

● Limit: RS.2,500
● Section 194F (TDS on Repurchase by MF/UTI):
●Rate: @ 20%

●Amount: Any amount on

termination/repurchase of unit by MF/UTI (prev.
deduction u/s 80CCB)

●Section 194G (TDS on commission on Sale of Lottery

Tickets:
●Rate: @ 10%

●Limit: Rs. 1,000

●Section 194H (TDS on commission/brokerage (other
than Section 194D & 194G:
●Rate: @ 10%

●Limit: Rs. 5,000

●Section 194I (TDS on Rent):

●Rate:

●On Plant & Machinery- @ 2%

●On Land, Building & Furniture- @ 10%

●Limit: Rs. 1,80,000 p.a.

●Section 194IA (TDS on Purchase of
Immovable Property):
●Rate: @ 1%

●Limit: Rs. 50,00,000

●Amount: Lumpsum or Installment

●Section 194J (TDS on Professional/ Technical fees):

●Rate: @ 10%

●Limit: Rs. 30,000

●Section 194L (TDS on Compulsory Acquisation
of Capital Assets):
●Rate: @ 10%, Limit: Rs. 1,00,000

●Section 194LA (TDS on Compulsory Acquisation

of Property):
●Rate: @ 10%, Limit:- Rs. 2,00,000

●Section 194LB (TDS on Interest paid ti NR

from Infrastructure Debt Fund):
●Rate: @ 5%
● Section 194LC (TDS on Interest from Indian
Company to NR or Foreign Company):
●Rate: @ 5%

●Section 195 (TDS on Amount paid to Non-Resident):

●Rate: @ different rate provided in section 195 and

DTAA with that country whichever is beneficial for
Deductee
 Due Dates
●TDS Payment: (Rule 30(1))

● on every 7day of next month

● TDS of March- 30th April

●TDS Return:

● Every 15th day of following quarter

● Return of Q4- 15th of May

●Issuance of TDS Certificate(Rule 31):

● Within 15 days from due date of TDS Return (Non- Salary)

● Within 15 days from due date of TDS Return of Q4 (Salary)

 TDS PAYMENTS
● Challan: in challan no. 281
● Only online payment to be made
● TDS on Property to be paid along with Return in
Form 26QB (within 7th day of the following month)
 Return Filing
● Return can only be made electronic form as
per scheme launched in 2003.
● RPU (Return preparer utility is made available by
NSDL for processing of TDS Return)
● Based on RPU, a number of software are
available in market for processing of Return such
as compu- TDS
● FVU (File Validation Utility) file generated from the
software/ utility to be submitted to TIN-FC alongwith
Verification Form (Form 27A)
 List of Form used in Return
● Form 24Q-Salary
● Form 26Q- Non Salary
● Form 26QB- TDS on Property
● Form 27Q- Other than Salary to Non Resident
 TDS CERTIFICATE
● Form 16- Salary
● Form 16A- Non Salary
● Form 16B- TDS on Property
 Fees/ Interest/ Penalty
● For Return Filing/uploading at NSDL:
● Upto 100 entries:- RS. 35
● Upto 1000 entries:- Rs. 200
● More than 1000 entries:- 600
● For late payment of TDS:- 1.5 % p.m
● For late filing of TDS Return:-
● Rs. 200 per day or
● Amount equal to TDS amount in the quarter
● Whichever is lower