Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting prescribed percentage. It is managed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS). It has a great importance while conducting tax audits. Assessee is also required to file quarterly return to CBDT. Returns states the TDS deducted & paid to government during the Quarter to which it relates.
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Tax is deductible at source at the rates given in table Below. If PAN of the deductee is not intimated to the deductor, tax will be deducted at source by virtue of section 206AA either at the rate given in the table or at the rate of 20 per cent, whichever is higher. Further, under section 94A(5), if payment or credit is made or given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate given in the table or at the rate of 30 per cent, whichever is higher.
TDS rates for the financial year 2015-16 are as follows:
| SECTION | NATURE OF PAYMENT | POINT OF DEDUCTION (IF PAYMENT IN EXCESS OF) | RATE OF TDS |
|---|---|---|---|
| 192 | Salary | Monthly- at the time of payment where estimated yearly net taxable salary exceeds tax free limit | As per Income tax Slab |
| 194A | Interest other than interest on securities | Banking Rs .10,000/- p.a. Other Rs. 5,000/- p.a. | 10% |
| 194B | Winning from Lotteries & Puzzles | Rs. 10,000/- p.a. | 30% |
| 194C | Payment to contractor, Payment to Advertising / subcontractor | Rs. 30,000/- per contract or Rs. 75,000/- p.a. | 1% if individual/ HUF otherwise 2% |
| 194D | Insurance Commission | Rs. 20,000/- p.a. | 10% |
| 194H | Commission and brokerage | Rs. 5,000/- p.a. | 10% |
| 194Ib | Rent – land and building | Rs. 1,80,000/-p.a. | 10% |
| 194Ib | Rant – Plant and Machinery | Rs. 1,80,000/-p.a. | 2% |
| 194J | Professional fees, Technical fees, consultancy fees or software fees | Rs. 30,000/- p.a. | 10% |
| 194IA | Immovable property other than Agriculture land | Rs. 50,00,000/- | 1% |
Different TDS returns forms have been prescribed depending upon the purpose of deduction, those are as follows:
| FORMS NO. | PARTICULARS |
|---|---|
| Form 24Q | Statement of tax deducted at source from salaries |
| Form 26Q | Statement of tax deducted at source on all payments other than salaries. |
| Form 27Q | Statement of tax deducted at source from interest, dividend, or any other sum payable to non- residents. |
| Form 27EQ | Statement of tax collection at source. |
| QUARTER | DUE DATE OF FORM 24Q, 26Q, 27Q & 27EQ |
|---|---|
| April to June | 15th July |
| June to July | 15th October |
| October to December | 15th January |
| January to March | 15th May |
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