A PROJECT REPORTON

“COMPARATIVE ANALYSIS OF TAX DEDUCTION AT SOURCES”

SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY

In Partial Fulfillment of the Requirement for Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

KAUTUK M CHAUDHAR
MBA 2ND YEAR (FINANCE)

UNDER GUIDANCE OF

DR . PRADIP THOMBARE

Sinhgad Institute of Management , Pune

(2022-2023)
 DECLARATION

1, The undersigned, hereby declare that the project report entitled "Comparative Analysis of
Tax Deducted at Source" written and summited by me to the Savitribai Phule Pune
University, in partial fulfilment of the requirement for the award of the degree of Master of
business Administration under the guidance of Dr. Pradip Thombare is my original work and
the conclusion drawn therein are based on the material collected by myself.

Place: Sinhgad Institute Of Management

Date:

KAUTUK M CHAUDHAR
 ACKNOWLEDGEMENT

I take this opportunity and privilege to express my deep sense of gratitude to professor M. N.
Navale, Honourable Founder President, Dr.(Mrs) Sunanda M. Navale, Founder secretary, The
Sinhgad Technical Education Society, Pune and Dr. Parag Kalkar, Director SIOM. They have
been a source of inspiration to me and I am indebted to them for initiating me in the field of
research.
I am deeply indepted to Faculty member, SIOM Prof. Indrajeet Kole, my research guide at
Sinhgad Institute of Management Pune, without whose help completion of the project was
highly impossible.
I take this opportunity and privilege to articulate my deep sense of gratefulness to the managing
Director and the staff of Dhorde Deshmukh and Company Pune for their timely help and
positive encouragement.

Place: Sinhgad Institute Of Management

Date:
KAUTUK M CHAUDHAR
 CONTENTS

Title Page No.

EXECUTIVEVE SUMMARY

Chapter No. 1- Introduction 1

1.1 Objectives of the project 1

1.2 Scope of the project 1

1.3 Limitations 1

Chapter No. 2- Profile of the organization 2

Chapter No.3- Research Methodology 5

Chapter No.4- Conceptual Background 7

4.1erature review Lit 8

4.2 Theoretical background 8

Chapter No.5- Data Analysis 26

Chapter No.6- Findings, Suggestions and 39

Conclusion.

Reference and bibliography 41

 EXECUTIVE SUMMARY

I have done the project under the title of A project report on Tax deducted at source with special
reference of Dhorde Deshmukh and Company. The study is done in Dhorde Deshmukh and
Company Pune. This project covered TDS mechanism and its implications on employees'
income.
It also explained with the case study which contains Form 16 of the employee received from
the employer. Case study is covered the employee personal information and his income
certificate. On the basis of Form 16 of the employee relative findings, suggestions and
conclusion is also given. It also contains all deductions and exemptions information for
investing the income of employee in a proper way.
Income Tax Act, 1961 is the guiding baseline for the all content in this report and the tax saving
tips provided herein are a result of analysis of options available in current market. Every
individual should know that tax planning in order to avail all the incentives provided by the
Government of India under different statures is legal.
Keeping salaried assessed at focus, process to file income tax returns and presents the
importance of prudent tax planning and tax saving options provided under this. Also an attempt
is made to educate an individual about the various aspects of income tax and coming up with
few tax planng notes.
 CHAPTER 1
INTRODUCTION

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 INTRODUCTION
This project covered TDS instrument designed for quick and smooth collection of tax due to
the authorities from taxpayer. This project TDS section with examples are taken to
understand mechanism of tax deduction at source. The data collected and used in this study is
in the form of both primary and secondary data. Primary Data is in the form of case study
(Form 16) of individuals as per their tax slab, whereas secondary data is used to explain all
the concepts of Income.
In this project TDS section with examples are taken to understand mechanism of tax
deduction at source. Tax Deducted at Source (TDS) aims at collection of revenue at the very
source of income. It is an indirect method of collecting tax and combnes the concepts of pay
as you earn and collect as it.

1.1- OBJECTIVE AND SCOPE

Different objectives behind conducting this project –

 To understand various implications of TDS deducted under various section.

 To understand tax collection mechanism (process).
 To understand the system of TDS with respect to Dhorde Deshmukh and Company
 To understand the return filing of salaried employees who’s TDS is deducted
 To understand the consequences/penalty of failure to pay tax or deduct tax. • To
analyse the various sections under which TDS is deducted and applicable rates of
TDS

1.2- SCOPE OF THE PROJECT

From this project we would understand what is the scheme of tax deduction at source. This also
contains how tax is deducted from salary income. The rate at which tax is deducted under these
sections is also understood. This also covered how to invest the income in better way to
minimize the tax liabilities.

13-LIMITATIONS
TDS calculations process is based on only Indian Income Tax Act.
Study under this project belongs to individual assessee only. The research project was carried
out with respect to the clients registered at Dhorde Deshmukh and Company India

1
 Chapter II
PROFILE OF THE ORGANISATION

2
 PROFILE OF THE ORGANIZATION

1) NAME OF THE COMPANY-

DHORDE DESHMUKH AND COMPANY

2) LOCATION OF THE COMPANY

DHORDE DESHMUKH AND COMPANY
Unit 3 Building 1
Ajay Apartment Senapati Bapat Rd,
Beside domino’s pizza,
Shivajinagar, Pune,
Maharashtra
Pune-411016
Phone: 9699095816

4) VISION AND MISSION

 We look at your life through tax and find ways to help.
 Serving taxpayers with more than 120 retail offices and digital tax solutions.

5) SERVICES OFFERED
 Income tax e-filling
 In person tax filling
 •Expert online tax preparation
 NRI tax e-filling
 US tax filling in INDIA
 Tax consultation and scrutiny
 Other tax services
 Tax chat.

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6) ORGANISATION CHART
Harshwardhan Dhorde Aditya Deshmukh
(CA) (CA)

Ajay Lokhande Nitin Marathe

(Senior Accountant) (Senior Accountant)

Kautuk Chaudhar Karan Kamble

(Jr. Accountatnt) (Jr. Accountant)

BUSINESS AND CULTURE:

Year round-Tax filing is a seasonal business. But the company provides year round support to
its client for further support after tax filing.
High ambitions, client focused
• Agile- The Company is very responsive for its client needs.
• Tax plus- The Company provides various services beyond tax filing.

9) SWOT ANALYS OF DHORDE DESHMUSH ANDD COMPANY

STRENGTHS:
Their name and reputation, financial leverage that allows them to offer quick refunds, that
help to sell more services.

WEAKNESS:
Their prices and physical locations that increase fixed costs when demand is very seasonal

OPPORTUNITIES:
Emerging markets that potential for growth; international expansion for their software, health
care paperwork advice; tax regulatory changes; and fragmented market

THREATES:
Recession encourages saves with do-it-yourself services; changes by IT DEPT; software is
making the tax process cheaper and easier.

4
 Chapter III
RESEARCH DESIGN AND METHODOLOGY

5
 RESEARCH DESIGN AND METHODOLOGY

A process is the set of methods and procedures used in collecting and analysing measures of
the variables specified in the research problem research. The design of a study defines the
study type (descriptive, correlational, semi-experimental, experimental, review, meta-
analytic) and sub-type (eg, descriptive-longitudinal case study), research problem,
hypotheses, independent and dependent variables, experimental design and, if applicable,
data collection methods and a statistical analysis plan. design is the framework that has been
created to find answers to research questions.

Descriptive Research
Descriptive research can be explained as a statement of affairs as they are at present with the
researcher having no control over variable. Descriptive studies are closely associated with
observational studies, which involves case study which explained in below.
Example-Case study contain Form 16 of the employee.

DATA COLLECTION
The data used for the project is a secondary data, which was initially present with Dhorde
Deshmukh And Company Pune .
Secondary Data- Secondary data analysis is the use of data that was collected by someone
else for some other purpose. In this case, the researcher poses questions that are addressed
through the analysis of data set that they were not involved in collecting. The data was not
collected to answer the researcher's specific research questions and was instead collected for
another purpose.

• Advantage of Secondary Data-

The biggest advantage of using secondary data is economics. Someone else has already
collected the data, so the researcher does not have to devote money, time, energy and
resources to this phase of research.
The other advantage of using secondary data is that data collection process
often maintains a level of expertise and professionalism that may not be present with
individual researchers

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 CHAPTER IV
CONCEPTUAL BACKROUND

7
 CONCEPTUAL BACKROUND

4.1- LITERATURE REVIEW

 Parthasarathi Shome, Pawan K. Aggarwal, Kanvvarjit Singh (1996)
The study team has had the benefit of discussions on the operation of the scheme of
tax deduction at source (TDS) in India

 CA ABHIJIT SAWARKAR (2013) Tax Collection Mechanism

Assessee requires paying tax on his income by way of Deduction & Collection of Tax
at source: Governed by Section 192 to 196D Direct Payment by assessee i.e Advance
tax or Self-Assessment tax

 SANJAY GUPTTA-
In his article all things related to TDS are mentioned Do's and Dont's are explained

4.2- THEORETICAL BACKGROUND:

HISTORY OF INDIAN INCOME TAX STRUCTURE
Income Tax in India was introduced by Sir James Wilson on 24 July 1860. It was a tax
selectively imposed on the rich, royalty and British's, and hence was not liked by the
powerful. In its first year, the exchequer collected a princely sum of Rs.30 lakh. The Act
lapsed in 1865 and was re-introduced in a different form in 1867. Tax rates were based on a
rough-and-ready assessment.
The most comprehensive Income Tax law was introduced in 1922.1919 Chelmsford reforms
made distinction between the functions and resources of the state and central govt. And
Income Tax became a Primary source of revenue for central government.
After Independence, 1947Income tax is an annual tax on income. The Indian Income Tax Act
passed in, 1961 came into existence in with effect from 1/4/1962 which extends to whole of
Indian economy moved towards increased globalization in 1990s. In 1993, Authority for
Rulings was set up to provide the non-resident with the facility of ascertaining in advance
their Income Tax liability
The Permanent Account Number (PAN) was launched in 1194.It acts as a unique identifier
and enables department to link all the transaction like tax payment, TDS/TCS credits, Income
tax credits, High value transaction etc. to individual tax payer. More than 12crore PAN has
been allotted.

8
Computation of total income all income shall be classified under the following heads of
income: salaries, income from house property, profits and gains of business or profession,
capital gains, income from other sources. The total income from all the above heads of
income is calculated in accordance with the provisions of the Act as they stand on the first
day of April of any assessment year.

1. WHO IS TO PAY INCOME TAX?

The word income has a very broad and inclusive meaning. In case of a salaried person, all
that received from an employer in cash, kind or as a facilay is considered as income. For a
businessman, his net profits will constitute income. Income may also flow from, investments
in the form of Interest, Dividend, and Commission etc. In fact, the Income Tax Act does not
differentiate between legal and illegal income for the purpose of taxation. Under the Act, all
incomes earned by people are classified into five different beads, such as income from salary,
income from house property, income from business or profession, income from capital gains
and income from other sources.

2. INTRODUCTION TO TAX DEDUCTED AT SOURCE

The Indian Income Tax Act provides for chargeability of tax on the total income of a person
on an annual basis. The quantum of tax determined as per the statutory provisions is payable
as
a) Advance Tax
b) Self-Assessment Tax
c) Tax Deducted at Source (TDS)
d) Tax Collected at Source
e) Tax on Regular Assessment Tax deducted at source (TDS), as the very name implies aims
at collection of revenue at the very source of income. It is essentially an indirect method of
collecting tax which combines the concepts of-pay as you carnl and -collect as it is being
camed. Its significance to the government lies in the fact that it prepones the collection of tax,
ensures a regular source of revenue, provides for a greater reach and wider base for tax At the
same time, to the tax payer, it distributes the incidence of tax and provides for a simple and
convenient mode of payment. The concept of TDS requires that the person, on whom
responsibility has been cast, is to deduct tax at the appropriate rates, from payments of spend
nature which are being made to a specified recipient. The deducted sum is required to be
deposited to the credit of the Central Government. The recipient from whose income, tax has
been deducted at source, gets the credit of the amount deducted in his personal assessment on
the basis of the certificate issued by the deductor. While the statute provides for deduction of
tax at source on a variety of payments of different nature, in this booklet, an attempt is being
made to discuss various provisions relevant only to the salaried class of taxpayers.

9
  The total income of an assessee for the previous year is taxable in the relevant
assessment year. For example, the total income for the F.Y. 2022-23 is taxable in the
A.Y. 2023-24.
 Tax Deduction at Source or TDS is one of the modes of collecting Income-tax.
 In simple terms, TDS is the tax getting deducted from the person receiving the
amount (Employee/Deductee) by the person paying such amount
(Employer/Deductor)
 The tax so deducted at source by the payer has to be deposited in the Government
treasury to the credit of Central Govt. within the specified time.
 The tax so deducted from the income of the recipient is deemed to be payment of
Income tax by the recipient at the time of his assessment. It is always considered as an
Advance tax which is paid to the government.

 3) Why TDS was conceptualized?

Income is earned over a period of time but the assessment/ determination of tax liability takes
place much later hence, to avoid a liquidity problem for the tax payer and to ensure a regular
flow of revenue for the government
The Income tax Act has provided for periodic recovery of tax from income liable to tax by
requiring the tax to be deducted at source from certain income/payments as and when such
income payments are credited

4) How is TDS Deducted?

Income and expenditure such as salary, lotteries, interests from banks, payment of
commissions, rent payment, payments to freelancers, etc. fall under the ambit of TDS. When
making payments under these segments, a percentage of the overall payment is withheld by
the source that is making the payments. This source, which can be a person or an
organization, is known as the Deductor. The person whose payment is getting deducted is
called the Deductee For instance, a Deductor is the employer paying salary to an employee
(the Deductee).

5) Advantages of TDS:
TDS is based on the principle of pay as and when you earn. TDS is a win-win scenario for
both the taxpayers and the government. Tax is deducted when making payments through
cash, credit or cheque, which is then deposited with the central agencies.

 Responsibility sharing for Deductor and tax collection agencies

 Prevents tax evasion.
 Widens the tax collection base
 Steady source of revenue for the government.

10
6) PROCESS

PAYER DEDUCTS TAX FROM PAYMENT/CREDITED.

PAYER DEPOSITES TAX TO GOVERNMENT

PAYER ISSUES TDS CERTIFICATE TO PAYEE

PAYEE CLAIMS REFUNDOF ITS TDS IN HIS ITR

TDS on simultaneous employment with more than one employer or on change of

employment Sub-Section 2 of Section 192 provides that where a person is simultaneously
employed with more than one employer, he may furnish the particulars of salary payments
and TDS to the employer of his choice. Similarly, on change of employment the particulars
of salary and TDS of earlier employment may be furnished to the subsequent employer.
These particulars are to be furnished in Form 12B in accordance with Rule 26A of the IT
Rules. The employer on receipt of such information is required to take into account the
particulars of salary and TDS and then deduct tax at source considering the aggregate salary
from all sources.

7) WHEN TDS IS DEDUCTIBLE

As specified in IT Act, it has to be deducted from income either on payment basis or at the
time of credit or payment whichever is earlier.
Following are the cases where Tax has to be deducted while making payment to the payee
(Payment basis)

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1. Salary
2. Dividends
3. Winning from lottery or crossword puzzle
4. Payment in respect of deposited under NSC
5. Payment in respect of repurchase of units by mutual fund or unit trust of India
6. Payment of compensation on acquisition of certain immovable property
7. Winning from horse race
8) RATE OF DEDUCTION OF TAX
As per Section 192, the is required to deduct tax at source on the amount payable at the
average rate of income tax. This is to be computed on the basis of rates in force for The
Financial Year in which payment is made The Finance Act of each financial year specifies
the rates in force for deduction of tax at source. For FY 2022-2023 rate of TDS is specified in
Part-3, schedule of Finance Act 2011 The same is as follows: -1 In case of individual &
HUF (other than II and III below)

TABLE-1
FOR INDIVIDUAL AND HUF
INCOME TAX SLAB INCOME TAX RATE

Income up to Rs. 2,50,000 Nil

Income between Rs. 2,50,001 Rs. 500,000 5% of Income above Rs. 2,50,000

Income between Rs. 500,001 - Rs. 750000 Rs.12500 + 10% of Income above Rs.
5,00,000

Income between Rs. 750000 - Rs. 1000000 Rs. 37500 + 15% of Income above Rs.
7500000
Income between Rs. 1000000 - Rs. 1250000 RS. 75000 + 20% of Income above Rs
1000000

Income between Rs. 1250000- Rs. 1500000 Rs. 125000 + 25% of Income above Rs.
12500000
above Rs. 1500000 Rs.187500 + 30% of Income above
Rs.1500000

TABLE-2

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For Senior Citizens (Age 60 years or more but less than 80 years)

INCOME TAX SLAB INCOME TAX RATE

Income up to Rs. 300000 Nil

Income between Rs. 300,001 Rs. 500,000 5% of Income above Rs. 2,50,000

Income between Rs. 500,001 - Rs. 750000 10% of Income above Rs. 5,00,000

Income between Rs. 750001 - Rs. 1000000 15% of Income above Rs. 7500000

Income between Rs. 1000000 - Rs. 1250000 RS. 75000 + 20% of Income above Rs
1000000
Income between Rs. 1250000- Rs. 1500000 Rs. 125000 + 25% of Income above Rs.
12500000

above Rs. 1500000 Rs.187500 + 30% of Income above

Rs.1500000

TABLE 3
FOR SUPER SENIOR CITIZENS (Age 80 years or more)

INCOME TAX SLAB INCOME TAX RATE

Income up to Rs. 500000 Nil

Income between Rs. 500,001 Rs. 750,000 5% of Income above Rs. 2,50,000

Income between Rs. 750,001 - Rs. 1000000 15% of Income above Rs. 5,00,000

Income between Rs. 1000000 - Rs. 1250000 20% of Income above Rs 1000000

Income between Rs. 1250000- Rs. 1500000 25% of Income above Rs. 12500000

above Rs. 1500000 30% of Income above Rs.1500000

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9) REFUND OF TDS
In case of excess deduction of tax at source, claim of refund of such excess TDS can be made
by the Deductor. The excess amount is refundable as per procedure laid down for refund of
TDS The difference between the actual payment made by the Deductor and the tax deductible
at source will be treated as the excess payment made. In case such excess payment is
discovered by the Deductor during the financial year concerned, the present system permits
credit of the excess payment in the quarterly statement of TDS of the next quarter during the
financial year. In case, the deduction of such excess amount is made beyond the financial
year concerned, such claim can be made to the Assessing Officer (TDS) concerned. However,
no claim of refund can be made after two years from the end of financial year in which tax
was deductible at source. However, for refund claims pertaining to the period up to March 31,
2023 may be submitted to the assessing officer (TDS) up to 31.3.2025

10) WHO SHALL DEDUCT TAX AT SOURCE

The statute requires deduction of tax at source from the income under the head salary. As
such the existence of employer-employee relationship is the "sine-qua-non for taxing a
particular receipt under the head salaries. Such a relationship is said to exist when the
employee not only works under the direct control and supervision of his employer but also is
subject to the right of the employer to control the manner in which he carries out the
instructions. Thus the law essentially requires the deduction of tax when
(a) Payment is made by the employer to the employee.
(b) The payment is in the nature of salary and
(e) The income under the head salaries is above the maximum amount not chargeable to tax
However, in case of
1.Central/State Government/P.S. U- The designated drawing & disbursing officers.
2 Private & Public Companies - The company itself as also the principal officer thereof.
3. Firm - The managing partners/partner of the firm.
4. HUF-Karta of the HUF
5. Proprietorship concern - The proprietor of the said concern.
6. Trusts Managing trustees thereof.
7. In case of a company, it is to be noted, that though the company may designate an officer
employee to make payments on the behalf of the company

11) WHAT DEDUCTOR MUST DO

1. Obtain TAN

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Every Deductor is required to obtain a unique identification number called TAN (Tax
Dedaction Account Number) which is a ten digit alpha numeric number eg DELH90468K
This number has to be quoted by the Deductor in every correspondence related to Income
Tax matters concerning TDS
2. Deductor should obtain PAN of the Deductee
3. The tax deducted has to be deposited in the designated banks within specified time. (Govt.
Deductor shall transfer the tax deducted through book entry in Government account). This is
detailed below
By or on behalf of the Government: on the same day,
By or on behalf of any other person: before the 7th of the following month However, if the
amount is credited in the books in the month of March, then the tax should be remitted by
30th April.
4. Use challan no. 281 for depositing TDS amount.
5. File statements of tax deduction in the prescribed time.
6. Use correct form to file TDS/TCS Returns.
Issue of T.D.S. Certificate 2.7.1 Every person deducting tax at source is required as per
Section 203 to furnish a certificate to the payee to the effect that tax has been deducted along
with certain other particulars. This certificate is usually called the TDS certificate. Even the
hanks deducting tax at the time of payment of pension are required to issue such certificates.
In case of employees receiving salary income including pension, the certificate has to be
issued in Form No.16. The certificate is to be issued in the deductors own stationery
However, there is no obligation to issue TDS certificate in case of tax at source is not
deducted /deductible by virtue of claims of exemptions/ deductions

12) DUE DATES FOR PAYMENT OF TDS

These due dates are applicable to all non-Government assesses and also to Government
assessee who deposit tax with Challan.
For government assessee who does not make the payment with challan, the due date for
payment of TDS will be the same day on which the amount is deducted

13) LATE PAYMENT AND FILING CONSEQUENCES:

Fees for delay in deduction: In the case when the TDS is not deducted on the specific due
date (Deduction due date is 30th of the month and in case of February, the last day of the
month). then interest will be applicable at a rate of 1% per month from the date when it
should have been deducted.

 Example: If the TDS amount was to be deducted for the month of May (ie., on 30th
of May), but it was actually deducted on 10th of June then interest will be 2% (for the
month of May and June).

15
Fees for delay in payment of deducted amount: In the case when the TDS deducted on
time but is not paid by the specific due date (payment due date is 7th of next month and in
case of March, it is 30th of April), then interest will be applicable at a rate of 1.5% per month
from the date when it should have been paid.

 Example: If the TDS amount was to be paid for the month of November (ie, on or
before 7th of December), but it was paid on 10th of December then interest will be
3% (for the month of November and December).

14) INTEREST
SECTION NATURE OF INTEREST PERIOD FOR
DEFAULT SUBJECT TO WHICH INTEREST
TDS/TCS IS TO BE PAID
AMOUNT
201 A Non deduction of tax 1 % per month From the date in
at source, either in which tax deductible
whole or a part to the date on which
tax actually
deducted
After deduction of 1.5 per month From the date of
tax, non-payment of deduction to the date
tax either in whole of payment
or in part

Example
Say that your payable TDS amount is Rs 5000 and the date of deduction is 13th January. Say
you pay TDS on 17th May. Then the interest you owe is Rs 5000 x 1.5% p.m. x 5 months Rs
375.
15) PENALTY
Equals to the amount that was failed to be deducted/collected or remitted may be imposed.
Prosecution (Sec 276B): If a person fails to pay to the credit of the Central Government-The
Tax deducted at source by him as required by or under the provisions of Chapter XVII-B, he
shall be punishable with rigorous imprisonment for a term which shall not be less than three
months but which may extend to seven years and
Penalty (Sec 234E): Deductor will be liable to pay way of fee Rs 200 per day till the failure
to pay TDS continues. However penalty should not exceed the amount of TDS for which
statement was required to be filed.
Penalty (See 271H1): Assessing officer may direct a person who fails to file the statement of
TDS within due date to pay penalty minimum of Rs 10,000 which may extended to
Rs.1,00,000 Penalty under this section is in addition to the penalty u/s 234E. This section will
also cover the cases of incorrect filing of TDS return.

16
16) PAYMENT COVERED UNDER THE SCHEME OF TDS
1-Salary-Sec. 192-TDS on SalaryAny person responsible for payment of salary is liable to
deduct tax at the slab rates applicable to individual employees for the financial year in which
payment is made in respect to income chargeable under the head_Salaries

Who Is the Payer Employer

Who Is the Recipient Employee

Payment Covered Taxable Salary of The Employee

At What Time Tds to Be Deducted At the Time of Payment

Maximum Amount Which Can Be Paid The Amount of Exemption Limit (LE
Without Tax Deduction 2,00,000/5,00,000/10,00,000 For AY 2014-
15

Rate At Which Tax to Be As Per As Per Calculation

Calculation

When The Provisions Are Not Applicable --

Is It Possible To Get The Payment Without The Employee Can Make Application In
Tax Deduction Or With Lower Tax FormNo.13 To The Assessing Officer To
Deduction Get The Certificate Of Lower
Tax Deduction Or No Tax Deduction

Example
Computation of tax at Average Rate with Uniform Salary (AY: 2023-24)
The income chargeable under the head salaries of an employee below sixty years of age for
the year inclusive of all perquisites is Rs.40,000/- p.m. The monthly income tax to be
deducted at average rate is computed as under.

Income Chargeable under the head Salaries 480000

inclusive of all perquisites [40000x12]

Tax on Total Salary 23000

Rebate U/s 87A 5000

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 Net Tax Payable Education and SHE Cess 18000
3%

Education and SHE Cess 3% 540

Total Income Tax + Cess 18540

Average Rate of Tax [(216307480000) X 3.86%

100]

Amount required to be deducted each month 1544

[40000 x 4.51%]

17) DEDUCTIONS
Deductions can be claimed as to reduce the TDS amount. Following deductions can be
considered by the Deductee. The Income Tax Act provides that on determination of the gross
total income of an assessee after considering income from all the heads, certain deductions
therefrom may be allowed. These deductions detailed in chapter VIA of the Income Tax Act
must be distinguished from the exemptions provides in Section 10 of the Act. While the
former are to be reduced from the gross total income, the latter do not form part of the
income at all

 SECTION SOC
Under section 80C, a deduction of Rs 1.50,000 can be claimed from your total income. In
simple terms, you can reduce up to Rs 1,50,000 from your total taxable income through
section 80C. This deduction is allowed to an Individual or a HUF.

 SECTION 80CCC:
Deduction for Premium Paid for Annuity Plan of LIC or Other Insurer This section provides
deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or
any other insurer. The plan must be for receiving pension from a fund referred to in Section
10(23AAB).
Other deductions-

 SECTION 80CCD (2):

Deduction in respect of Contribution to Pension Account (by Employer) Deduction available
for the amount paid or deposited by the employer of the assess in a pension scheme notified
or as may be notified by the Central Government subject to a maximum of 10% of salary in
the financial year.

 SECTION 80CCD:

18
Additional Contribution to New Pension Scheme (NPS) A deduction of up to Rs. 50,000 is
available over and above the limit of Rs. 1.50 lakh in respect of contributions made to NPS
under Section 80CCD (1).

 SECTION 80CCG:

Rajiv Gandhi Equity Saving Scheme:

Amount invested by resident individuals, whose gross total income does not exceed Rs. 12
lakhs, in listed shares or listed units in accordance with notified scheme for a lock-in period
of 3 years (Subject to certain conditions)
Deduction of 50% of total investment subject to maximum of Rs. 25,000 in 3 consecutive
assessment years, beginning with the assessment year relevant to the previous year in which
the listed shares or list units of equity-oriented funds are first acquired.

 SECTION 80D:
Deduction in respect of Medical Insurance:
Deduction is available up to Rs. 30,000/- for senior citizens and up to Rs 25,000/- in other
cases for insurance of self, spouse and dependent children. Additionally, a deduction for
insurance of parents (father or mother or both) is available to the extent of Rs. 30,000/-if
parents are senior Citizen and Rs. 25,000/- in other cases. Therefore, the maximum deduction
available under this section is to the extent of Rs. 60,000/- Within the existing limit a
deduction of up to Rs. 5,000 for preventive health check-up is available.

 SECTION 80E:
Deduction in respect of Interest on Loan for Higher Studies:
Deduction is applicable for the interest which assess is paying for education loan. The
deduction is also available for the purpose of higher education of a relative.

 SECTION 80G:
Deduction in respect of Various Donations:
The various donations specified in Sec. 80G are eligible for deduction up to either 100% or
50% with or without restriction as provided in Sec. 80G

 SECTION 80GG:
Deduction in respect of House Rent Paid:
1. Rent paid less 10% of total income
2. Actually rent received.
3. 40% of Basic salary Or 50% of basic salary (For metro city)

19
Assess or his spouse or minor child should not own residential accommodation at the place of
employment. He should not be in receipt of house rent allowance. He should not have self-
occupied residential premises in any other place.

 SECTION 80GGA:
Deduction in respect of certain donations for scientific research or rural development

 SECTION 80GGC:
Deduction in respect of contributions given by any person to political parties

 SECTION 80 TTA:
Deduction on Saving Bank Account Interest:
Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000,
in respect of interest on deposits in savings account (not time deposits) with a bank, co-
operative society or post office.

 SECTION 80EE:
This section allows tax benefits for first time home buyers. Income tax deduction can be
claimed on home loan interest. To claim this deduction loan must have been taken from a
financial institution for purchasing your first residential house property. This deduction is
over and above the Rs 2 lakhs limit under section 24 of the income tax act. Read more about
deduction of Rs 2 lakhs on interest on home loan here.
Section 80EE was introduced effective 2013-14 and was available for 2 years, FY 2013-14
and FY 2014-15 only (assessment year 2014-15 and 2015-16).
However, this section has been reintroduced effective FY 2022-23 (assessment year2023-
24).
After all these calculations the taxable income is found out on which the relevant tax is
calculated as per the tax slab applicable. The education Cess is also calculated @3% on the
tax and that is an to the tax payable amount. The amount of rebate is given to the individual if
his net taxable income is below RS 5,00,000/-
2)Interest on securities-Sec 193
The person responsible for paying interest on securities to a resident is required to deduct
TDS. Tax is to be deducted at the time of payment or credit to the account of the payee,
whichever is earlier. Where any amount of interest is credited to any account whether called
Interest payable account or suspense account or any other name, provisions of this section
shall apply and TDS is to be deducted.

 Rate: @ 10% (20% If PAN is not provided)

 On debenture- Rs. 5,000

20
  On others- Rs. 10,000
 Deduction at the time of credit or payment whichever is earlier.
 Exempt from provision: NDDB, NSC, Gold Bonds, Government securities.
3)TDS ON DIVIDENT-SEC.194
The principal officer of an Indian company or a company which has made the prescribed
arrangements for the declaration and payment of dividends within India is liable to deduct tax
at source on dividends. Tax is to be deducted at the time of credit of such amount to account
of payee or at the time of payment whichever is earlier. Assessee can apply to assessing officer
for no TDS or TDS at lower rate under Section 197.

 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).
4)TDS ON INTEREST OTHER THAN SECURITIES-SEC 194A
Section 194A deals with the provisions relating to TDS on interest other than on securities.
Tax is to be deducted under section 94A, if interest (other than interest on securities) is paid
to a resident. Thus, the provisions of section 94A are not applicable in case of payment of
interest to a non-resident. Payments made to non-residents are also covered under TDS
mechanism, however, tax in such a case is to be deducted as per section 195.

 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.

5)TDS ON WINNING FROM LOTTERIES-Sec.194B
Under Section 194B of the Income Tax Act, 30% tax is deducted on any prize money in
excess of Rs 10,000 and other winnings from games, lotteries etc. This is deducted at source
(TDS). A 3% education cess is payable on the tax amount.
While filing your income tax return you must include prize money under income from other
sources and you must submit the TDS certificate as proof that you have paid all the tax due
against the prize money

6)TDS ON WINNING FROM HORSE RACE-Sec 194BB

Any person being a bookmaker or a person whom a license has been granted by the
government under the law for horse racing in any race course for wagering or betting in any

21
race ourse, who is responsible for paying to any horse race in an amount exceeding Rs 5000
shall, at the time thereof, deduct TDS at 30%
7)-TDS ON PAYMENT TO CONTRACTOR -Sec 194C

Who is the payer Specified person

Who is the recipient A resident person

Rate of TDS 1% if payment made to individual or HUF

or 2% in any other case

Payment Covered Consideration for any Work Contract

At the time of payment or at the time of

At what time TDS has to be deducted
credit

Maximum amount which can be paid The tax is required to be deducted if a single
without tax deduction payment exceeds Rs. 30000/- or if the
aggregate payments exceed Rs. 75000/- Per
annum

8) TDS on INSURANCE COMMISSION-SEC 194D

Person responsible for paying to a resident commission or otherwise for soliciting or
procuring business including continuance, renewal or revival of policies is required to deduct
TDS TDS is required to be deducted at the time of credit of such amount of payment thereof
whichever is earlier. TDS is required to be deducted only when the aggregate of the amounts
of such income credited or paid or likely to be paid or credited during the financial year
exceeds Rs. 20,000. (Rs. 15,000 from 1st June 2023)
Rate of TDS and Threshold Limits under Section 194D

22
 Threshold Limit Rs. 15,000
RS. 20,000

10%
IPAN is furnished
5%

20% 20%
If PAN is not furnished

9) PAYMENT OUT OF DEPOSITE UNDER NSS

(New rate applicable from 1.6.2022)-Sec 194EE

 Threshold Limit -2500 (w.e.f. 1-6-2022)

 TDS Rate (Individual & HUF): 10% (New) / 20% (Old)
 TDS Rate (Others): 10% (New) / 20% (Old)
 TDS Rate if No PAN: 20%
10 COMMISSION-LOTTERY
(New Percentage and Limit applicable from 1-6-2022)-Sec 194G

 Threshold Limit-15000 (New)/Rs.10000 (Old)

 TDS Rate (Individual & HUF): 5% (New) / 10% (Old)
 TDS Rate (Others): 5% (New) / 10% (Old)
 TDS Rate if No PAN: 20%
11)TDS ON COMMISSION-Sec 194H

 Section 194H is for income tax deducted on any income by way of commission or
brokerage, by any person responsible for paying to a resident.
 Individuals and Hindu Undivided Family who were covered under section 44AB are
also required to deduct TDS
 The rate of TDS shall be 10%
 Commission or brokerage includes any payment
1. Received or receivable,
2. Directly or indirectly, OR
3. by a person acting on behalf of another person

23
12) TDS ON RENT: Sec.1941
 The person (not being an Individual or HUF) who is responsible for paying of rent is
liable to deduct tax at source.
 In case the aggregate of the amount of rent credited or paid or likely to be credited or
paid during the financial year exceeds Rs. 1,80,000/- Also, individuals and/or HUFS
who are subject to tax audit are also under an obligation to deduct the tax at source
 The limit of Rs. 1,20,000/- was enhanced to Rs. 1,80,000/- w.e.f. 1.7.2010Rent means
any payment, by whatever name called, under any lease, sub-lease, tenancy or any
other agreement or arrangement for the use of (either separately or together) any
a. Land or
b. Building (including factory building) or
c. Land appurtenant to a building (including factory building) or
d. Machinery or
e. Plant or
f. Equipment or
g. Furniture or
h. Fittings
The Rate of TDS?

S No Nature of Payment Rates of tax deduction

1 Rent of plant and machinery 2%

2 Rent of land or building or 10%
furniture or fitting

TDS ON FESS OR PROFESSIONAL /TECHNICAL SERVICES:

Sec1941
Any sum paid by way of
a) Fee for professional services
b) Fee for technical services
c) Royalty
d) Remuneration/fee/commission to a director or
e) For not carrying out any activity in relation to any business

24
 f) For not sharing any know-how, patent, copyright etc.RATE-10%
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 to be made.
TDS CERTIFICATE

 Form 16- Salary

 Form 16A-Non Salary
 Form 16B- TDS on Property
Time-Limits to Deposit TDS
Where tax is deducted by the office of the Government:

 On or before 7 days from the end of the month in which the deduction is made; and.
 On the same day where the tax is paid without production of income tax challan.
In any other cases

 On or before 7 days from the end of the month in which the deduction is made; and
 On or before 30th day of April, where the income or amount is credited or paid in the
month of March.
Time-Limit for Issue of TDS Certificate
Form 16A should be issued within 15 days from the due date for furnishing the statement of
tax deducted at source.
1. Quarter Ending 30th June - Due date 31 July to furnish statement
-Due date for issue of TDS Certificate is 15th Aug
2. Quarter Ending 30th September-31st Oct to furnish statement
-Due date for issue of TDS Certificate is 15th November
3. Quarter Ending 30st December-31s January to furnish statement
-Due date for issue of TDS Certificate- 15th February
4. Quarter Ending 31st March-31st May to furnish statement -Due date for issue
Of TDS Certificate is 15th June

25
 CHAPTER 5
DATA ANALYSIS

26
 DATA ANALYSIS

CASE STUDY I
Arjun Mehta, work in company ABC PVT LTD, as a employee. Calculations are given on the
basis of his Form 16.

FORM 16

(See rule 31(1)(a);

PART A

Certificate under section 203 of the Income-tax Act, 1961 for Tax deducted at
source on salary

Name of the employer Name and Designation of the Employee

ABC PVT.LTD Arjun Mehta (Admin Department)

B block, Right street B block, left street,

City-125345, State City-125345, State

27
 TAN-MUMM34567G MUMB236541 AABBS234WP

7.Add Any Other income reported by employee

0
Income from House Property

515700
8.Gross Total income (6+7)

9. Deduction under chapter VI A

A) Section 80C, 80 CCC, 80 CCD

Deduction under section 80C

0
Repayment of home loan interest

25000
Life insurance premium

0
Mutual Fund
2000
Employee provident fund

Public provident fund 10500

5000
Sukanya Samrudhi

B) Other Deduction Under Section (80E, 80G etc.)

28
Aggregate of deductible amount under chapter

42500
VI A

473200
11. Total income (8-10)

22320
12. Tax on total income

5000
13. Less Rebate u/s.87 A

17320
14. Tax after Rebate u/s.87 A

519
15. Add: Education Cess

0
16. Relief Under Section 89

17840
17. Tax Payable (14+15)

29844
18. Tax Deduction

12000
19. Net Tax Payable / Refundable

29
 CASE II-
FORM NO. 16
[See rule 31(1Xa)]
PART A

Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source on salary

Certificate No. FXNMVA Last updated on- 24 May

Name and address of the Employer Name and address of the

Employee

PAN of the TAN of the Dedutor PAN of the Employee Employee Reference
No
No Provided by the Employer No. provided by the
employer (If
available)

CIT ( TDS) Assessment Year Period with the Employer

Address – ABC 2023-24 01ST Apr to 31st Mar 2023

30
 PART B (Annesare)

Details of Salary paid and any other income and deducted

1) Gros Salary Rs. 130.000

a) jay Salary as per provisions contained in sec 17(1) 0

B ) Value of perquisites u/s 17(2) (as per Form

No. 12BA, wherever applicable) 0

c) Profits in lieu of salary under section 173as per

Form No 128A, wherever applicable) 0

4)Total Rs 1,300,000

2 Less Allowance to the extent exempt u/s 10

Conveyance Rs. 9800

3 Balance (1-2) Rs 12,90,400

4 Deductions

(b) Tax on employment 0

(b) Tax on employment Rs 2400

5 Aggregate of 4(a) and (b) Rs 2400

6 Income chargeable under the head "Salaries' (3-5) Rs 1,288,000

7 Add: Any other income reported by the employee

Interest on let out property Ra 300,000

8 Gross total income (6+7) Rs. 9,88,000

9 Deductions under Chapter VI-A

31
A) sections SOC, 80CCC and 80CCD

(a) section 80C Gross amount Deductible amount

(i) Employee PF Rs 97,097 Rs 97.307

(II) Principal Loan Repayment Rs. 53,903 Rs $3.903

(b) section 80CCC Rs.0 Rs.0

(b) section 80CCD Rs.0 Rs.0

(B) Other sections (eg 80E, 80G, SOTTA, etc.)

under Chapter VI-A Deductible amount

(i) section ………… Rs.0

10 Aggregate of deductible amount under Chapter Rs. 1,50,000

VI-A

11 Total Income (8-10) Rs. 838.000

12 Tax on total income Rs. 92.600

13 Education cess @ 3% (on tax computed at S.

No. Rs. 2,778

14 Tax Payable (12-13) Rs 95,378

15Less: Relief under section 89 (attach details) Rs 0

16 Tax payable (14-15) Rs. 95.378

32
 INTERPRETATION

 In the above Form 16 it can he seen that the gross salary of the individual is
Rs.520000
 According to the gross salary the individual falls into second tax slab that is
Tax Rate 20%

 To get the more refund he can claim -

HRA (House rent allowance)
Medical allowance
LTA (leave travel allowance)

 Under Chapter VI A-
As the limit in 80 C is Rs. 1.50,000, but in above form 16: Rs.42500- is only given so
he can further claim the remaining amount.

 The individual is liable to pay taxes up to Rs-12000/- after giving the rebate benefit of
Rs-5,000/-

INTEREST FOR DEFAULT IN TAX FILING: Sec 234A

Where the return of income for any assessment year is furnished after the due date or is not
furnished, the assessee shall be liable to pay simple interest at the rate of one per cent for
every month or part of a month for the period commencing on the date immediately
following the due date up to the date of furnishing the return (in cases where return is
furnished after the due date) or up to the end of the Assessment Year (in cases where no
return is fumished) on the amount of shortfall in total income tax payable by the assessee
In simple words, interest @ 1% per month is payable on the amount of income tax paid after
the due date for filing of the return.
Due Dates for Filing of Returns for AY 2023-2024 (FY 2022-23)

33
For non-corporate (Individuals, HUFS,

For non-corporate (Individuals, 30th September

HUFS, Firms Co-operatives & Local 2023
Authorities) assessee whose accounts are
required to be For salary earners and other
non- corporate audited

For the salary earns and other non-corporate 05 Aug 2023

assessee whose account are not required to
be audited

Illustration:
Let's say that your total tax outstanding is Rs. 1,00,000 (net of advance tax paid & TDS if
any) and you file your return on the 15th December instead of 31st July of the assessment
year, when you were actually supposed to file your return. You are now 5 months late in your
tax payments.
(The 15-day period in December is treated as a month)
Interest-100,000 x 1% x 5-Rs. 5,000
This Rs. 5,000 is over and above the tax amount that you will be paying in any case
If you do not file your return at all, you will have to pay 1% interest till the end of the
assessment year ie. 31st March. In the example above, your liability would be 8% of Rs.
1,00,000 which is Rs 8,000
Interest payable for default in payment of advance tax: Sec.234 B
An assessee who is liable to pay advance tax has failed to pay such tax or where the advance
tax paid by such assessee is less than ninety per cent of the assessed tax, the assessee shall be
liable to pay simple interest at the rate of one per cent for every month or part of a month for
period from the date on which the payment of advance tax became due on the amount of
shortfall in the amount of advance tax paid.
In simple words, interest @ 1% per month is payable on the amount of income tax paid after
the end of the financial year.
IIIustration 1
Radhika's total tax liability is Rs 48.000. Radhika paid this amount on 12th June while filing
her return. Radhika's total tax liability is more than Rs 10,000, she was liable to pay advance
tax Therefore, Radhika will be liable to pay interest under section 2348

34
Interest calculation
Rs 48,000 x 1% x 3 (April, May, June)
=Rs 1,440
Radhika is liable to pay Rs 1,440 interest as per section 234B.
Illustration 2
Amay had a total tax payable of Rs 56,000, out of which Rs 48,000 was paid by him on 29th
March as advance tax. Remaining balance of Rs 8,000 was paid by Arnav at the time he was
filing his return on 30th May.
Even though Arnav has paid advance tax, we need to check whether he paid 90% of the
assessed tax as advance tax or not.
Assessed tax is Rs 56,000. 90% of assessed tax is Rs 50,400. However, Arnav only deposited
Rs 48,000 which is less than 90% of assessed tax, therefore, Arnav is liable to pay interest
under section 234B
Interest calculation
56,000(assessed tax) - Rs 48,000 (advance tax)
=8,000
8,000 x 1% x 2 (April and May)
=Rs 160, (Rs 160 are the interest payable under section 234B by Arnav.)

Interest payable for deferment of advance tax Sec 234C

Interest is payable a 1% for 3 months on the amount of shortfall in payment of advance tax
became due on 15th June (applicable only to corporate assessee), 15th September (all
ameses) and 15th December (all assessee) and interest @ 1% on the amount of shortfall in
payment of advance tax became due on 15th March (all assessee).
In case of salaried employees, the advance tax liability is to be computed on the income other
than salary income. TDS deducted by the employer is not to be adjusted against this liability.

35
Calculation of Interest under section 234C-In case of a Non-Corporate Tax
Payer
Rate of Interest Period of Amount on which
Interest Interest is calculated

If Advance Tax paid Simple interest 3 months 30% of Amount less tax
on or before @1%) per month already deposited before
September 15 is less September 15
than 30% of the
Amount

If Advance Tax paid Simple interest 3 months 60% of Amount"

on Simple interest @1% per month less tax already
per month or before deposited before
December 15 @1% December 15
is less than 60% of
the Amount

Simple interest 60% of Amount" less tax

@1% per month already deposited before
March 15

Calculation of Interest under section 234C-In case of a Corporate Tax Payer

Rate of Interest Period of Interest Amount on which

Interest is calculated

If Advance Tax paid Simple 3 MONTHS 15% of Amount less

on or before June 15 interest @1% per tax already
is less than 12% of month deposited before
the Amount June 15

NB If Advance Tax Simple 3 MONTHS 45% of Amount"

paid on or before interest @1% per less already
September 15 is less month deposited before
than 36% of the September 15
Amount

36
If Advance Tax paid Simple 3 MONTHS 75% of Amount less
on or before interest @1% per tax already
December 15 is less month deposited before
than 75% of the December 15
Amount

If Advance Tax paid Simple 100% of Amount

on or before March interest @1% per less tax already
15 is less than 100% month deposited before
of the Amount March 15

37
 CHAPTER 6
FINDINGS AND SUGGESTIONS AND CONCLUSION

38
 FINDINGS AND SUGGESTIONS AND CONCLUSION

FINDINGS
Finding from the above case study are as given below.

 In above case 1. Arjun has the liability which can be reduce by investing the money in
HRA, LTA etc.

 Different ways to invest the money.

 In case II, the employee has self-occupied house, so deduction in form of interest paid
co loan is allowed up to Rs 2.00.000.

SUGESTIONS
CASE I -

 last year my FD earned interest of a little over Rs. 10,000, but since I failed to
submit the Form 156, the bank deducted 10% as TDS, The bank told me to file
tax returns, the following which I would receive a refund. The bank has given me
as interest certificate. My total income does not exceed Rs. 250,000.
Depending upon the source of your income, you need to select the correct locome Tax
Return and disclose your total income earned from all the sources. As your total income does
not exceed Rs 2.5 lakh, your tax liability will be nit
You can claim the credit in respect of taxes deducted at source and claim refond in the return
of income. Please ensure that the TDS is reflected in your Forti 26AS Once the n of income is
processed, you will be entitled to receive the refund of TDS

CASE II-

 I work for a private company and have a salary of Rs 15,000. My company

deducts TDS at 10% from my salary. I have no PAN, but am I eligible for the
deduction? My employer told me that I would get back the 10% amount
deducted once I file my return.
Considering monthly salary of Rs 15,000, the employer was not liable to deduct the TDS
Having deducted the TDS and paid to the government, you will have to claim the refund by
filing the return of income Without having PAN, you will not be in a position to file the
return of income and claim the refund of taxes deducted. You are advised to obtain the PAN
and comply with provisions of the IT Act, 1961

39
 CONCLUSION

Responsibility for deduction or collection of tax at source is fixed on specified persons. Every
specified person responsible for deduction of tax at source is required to obtain a tax
deduction Account Number Statements of TDS have to be submitted on prescribed forms and
within specified time. Tax advisor should suggest the suitable way to invest money to get the
refund. Also provide the benefits of return filing

40
 REFERANCE AND BIBLIOGRAPHY

 Dr. Vinod K. Singhania and Monica Singhania: -

-Students Guide to Income Tax Taxman Publications Pvt. Ltd
 Mahesh Chandra & DC Shukla Income-tax Law and Practicef, Pragati Publications,
latest edition
 Dr Radha Gupta-
-Impact of Income Tax on Saving and Investments Indian Journal of Applied
Research, December 2012
 ParthasarathI Shome, Pawan K. Aggarwal and Kanvvarjit Singh -The system of tax
deduction at source: coverage, functioning and suggestions for reform.

INTERNET WEBSITES
www.incometaxindia.com
www.moneycontrol.com
www.cutmytax.com/
www.hrblock.in

 TRAINING
l) Training sessions carried out at Dhorde Deshmukh and Company (including On lob
training)
2) Learning from seniors in the organization.

41