A person responsible for making payment of income which is covered by provisions TDS (Tax Deducted at Sources),
is required to deduct tax at source and deposit the same to the Government within the prescribed time.
A person who deducts TDS is called as ‘deductor’ and person whose tax has been deducted is called ‘deductee’. Tax will deduct on gross amount, deductee will received net amount after deduction of tax.
Who is liable to deduct the TDS?
Following is the list of some important deductors of TDS under different types of the payments.
TDS on Salary (Section 192)
Any person who is responsible for paying any income chargeable under the head “Salary” is required to deduct tax at sources on the amount payable.
TDS on interest on security (section 193)
Any person responsible for paying interest on security to a resident is required to deduct TDS.
Deduction of TDS from dividend (Section 194)
The principal officer of an Indian company or a company which has made the prescribe arrangement for the decleration and payment of dividends within India is required to deduct TDS.
TDS on interest other than interest on security (Section 194A)
Any person other than individual and HUF who is responsible for paying to a resident any income by way of interest other than security is required to deduct the TDS.
TDS on payment to contractors / sub-contractor (Sec. 194C)
Any specified person who is responsible to for paying any sum to any resident in pursuance of a contact between a specified person and resident contractor is required to deduct the tax at source. Here specified person includes, central and state government, local authority, corporation, company, co-operative society, trusts, universities, partnership firms, and also individual and HUF whose books of accounts audited under section 44AB immediately preceding financial year.
TDS on insurance commission (Section 194D)
Person responsible for paying to a resident any income by way of commission, remuneration and reward for soliciting or procuring insurance business is required to deduct TDS.
Any sum under life insurance policy (Section 194DA)
Any person responsible for paying to resident any sum under life insurance policy including bonus is required to deduct TDS.
Any payment as commission or brokerage (Section 194H)
Any person other than individual and HUF who is responsible for paying commission or brokerage to a resident shall deduct a tax at sources.
Income by way of Rent (Section 194I)
Any person other than individual and HUF who is responsible for paying rent to a resident is required to deduct a tax at source.
TDS transfer of Immovable property (194IA)
Any person who is responsible for paying to a resident seller any sums by a way of consideration of any immovable property other than rural agricultural land is liable to deducts TDS on source.
Fees for professional or technical services (Section 194J)
Any specified who is responsible for paying to a resident any sum by way of professional fees, fees for technical services, royalties, etc, is required to deduct the TDS at source. Here specified person mean any person other than individual and individual and HUF whose books of accounts audited under section 44AB immediately preceding financial year.
TDS chart transaction limit and TDS rate:
|Section||Nature of Payment||Transaction Limit (Rs.)||TDS Rates for Individual and HUF||TDS Rates for Other|
|193||Interest on security||2500/-||10||10|
|194A||Interest From Banking company, co-operative
society, post office
|194A||Interest from other person||5,000/-||10%||10%|
|194B||Winning, Lottery, Crossword, Puzzles||10000/-||30%||30%|
|194BB||Winning from Horse Race||5000/-||30%||30%|
|194C||Contractors ( Including Advertising & Sub
|30,000 ( Per Invoice or Payment) or 75,000/- p.a||1%||2%|
|194DA||Life Insurance Policy w.e.f. 1/10/2014||1,00,000/-||2%||2%|
|194F||Repurchases Units of MF’s Or UTI||–||20%||20%|
|194G||Commission on Lottery tickets||1000/-||10%||10%|
|194H||Commission Or Brokerage||5,000/-||10%||10%|
|194I||Rent of Building and Land||1,80,000/-||10%||10%|
|194I||Rent on Plant and Machinery and other Equipments||1,80,000/-||2%||2%|
|194IA||Transfer of Immovable Property Other than Agriculture Land||50,00,000/-||1%||1%|
|194J||Payment of Professional Fees, Technical Services & Royalty||30,000/-||10%||10%|
|194LA||Compensation on acquisition of immovable property||2,00,000/-||10%||10%|
|194LB||Interest from an Infrastructure Bond||–||5%||5%|
|194LBA||Income in the nature of interest received or
receivable from a special purpose vehicle, distributed by a business trust to
its unit holders. w.e.f. 01/10/2014
|194LC||Interest to Non Resident from Indian company/business trust engaged in certain business.||–||5%||5%|
- If recipient does not provide his PAN to thedeductor, tax will be deducted at 20%. However casual income like winning fromlottery, crossword puzzle, winning from horse races, etc, will be deducted @rate 30% on gross amount, even for non-PAN holder.
- Above rates are excluding surcharge and education cess as applicable.
- In the case of transport business no TDS will be deducted if payee furnishes his PAN.
- TDS is deducted on accrual basis i.e. due or paid whichever is earlier.
Due date of payment of TDS
Tax collected to be paid at Government treasury on or before 7 days from the end of the month in which tax is deducted.
Due date of issuing from 16
Form 16 will be issued annually; the due date of issuing Form 16 is May 31 of the financial year immediately following the financial year in which tax is deducted.
Due date of Return filling
|Quarter Ending||Due Date of Filling|
|For the quarter ending June 30 of the financial year||July 15 of the Financial year|
|For the quarter ending September 30 of the financial year||October 15 of the Financial year|
|For the quarter ending December 31 of the
|January 15 of the Financial year|
|For the quarter ending March 31 of the financial year||May 15 of the financial year immediately
following financial year in which tax is deducted/collected.