Tax Deducted at Source

SOURCE
(TDS)
SUBMITTED BY:
AMBAR PRATIK MISHRA
GUIDED BY:
RAJNIKANT KHUNTIA
ASST. PROFFESOR
DEPT. OF COMMERCE
DHENKANAL AUTONOMOUS COLLEGE

DHENKANAL
MEANING
 Means that the person responsible for making payment
of certain incomes to the income earners deduct income
tax at the prescribed rates on such incomes before
payment is made to them.
 Amount so deducted at source shall be deposited by the
deductor in the Govt. Treasury with in the prescribed
limit.
Deductor
 It is a person/company who is liable to deduct the TAX at

source, from the payment being made to the party.
 Deductor is also termed as Employer in cases where the

payments are under Salaries.
Deductee
 It is the person, from whom the tax is being deducted or
accrued for deduction.
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
 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.
Payments subject to deduction of tax at
source
 Salaries- Section 192
 Interest on securities- Section 193
 Dividends - Section 194
 Interest other than interest on securities- Section 194A
 Winnings from lotteries or crossword puzzles- Section 194B
 Winnings from horse races- Section 194BB.
 Payments to resident contractors- Section 194C.
 Payment to insurance commission-Section 194D.
 Payment to non-resident sportsman or Sports Association-
Section 194E
 Payment of commission etc. on sale of lottery tickets Section
194G
Section 192 - Salaries
 Who is liable to deduct?

Any person responsible for paying any sum chargeable under the head
“salaries”.
In other words every employer is liable to deduct tax at source.
Thus ,even individuals or HUF are required .
 TDS @average rate of Tax payable for FY

 Salary means ''salary” as per Sec 17 of Act
TDS has to be deducted @ the time of payment every month
Amount = Estimated Tax for FY /12 months
 Consider: Salary from previous employer
 Consider: Income from other sources
Deductions under Chapter-VIA
Section 80C
Section 80CCA: National Saving Scheme or deferred annuity plan
 Section 80CCB: Equity linked saving scheme
 Section 80CCC: Pension Funds
 Section 80CCD: Pension Scheme of Central Government
 Section 80D: Medical Insurance
Section 80DD: Medical treatment of handicapped
Section 80E: Repayment of loan for higher education
Section 80GG: House Rent Paid
Section 80RRA: Remuneration in Foreign Currency
Section 80U: Persons suffering from disability
Interest on Securities
SEC-193
 The person responsible for paying income by way of “Interest
on Securities” to a resident or a domestic company shall, at the
time of payment thereof or at the time of credit of such interest
in the books of account, whichever is earlier.
 Rate of Tax: 10%
 Tax shall not be deducted at source from any interest payable
on:
 National Saving Certificate
 Debentures issued by a co-operative society or any public
sector company and which are notified by the CG.
National Development Bond
Dividend
SEC-194
 Who will deduct tax at source? - The principle officer of

company
 On which income deduction is to be made?- On
dividends u/s 2(22)(e)
 Rate of TDS: 10%
Interest other than
“interest on securities”
SEC-194a
 Who will deduct the tax at source?

 An individual or HUF, who is required to get his account
audited u/S44ab
A company, firm, co-operative society, AOP, BOI etc
 Payment made to whom?- A resident of India or domestic
company
 Rate of tax-10%
 Limit:
For banking co.-Rs.10000
For others- Rs.5000
 Deduction at the time of credit or payment which is earlier.
Winnings from lotteries or crossword puzzles etc
SEC-194b
 The person responsible for paying any income to any resident or domestic
company by way of winnings from lottery or crossword puzzles or card
game or any other game of any sort of an amount, exceeding Rs.10000 at
the time of payment, deduct income tax thereon at the rates in force.
 Rate of tax: 30%
 Important points:
 When the prize is given partly in cash and partly in kind income tax will be
deducted with reference to the aggregate amount of the cash prize and the
value of the prize in kind.
 When the prize is given in installments, the tax will be deducted only at the
time of actual payment of each installment.
Winnings from horse races
SEC-194bb
Tax will be deducted at source by bookmakers race

clubs from winnings from horse races where the
payments exceed Rs 5000.
 Rate of Tax- 30%
Payments to Contractors
SEC-194c
• Income tax will be deductible at source from
payments made by the following to any resident
contractor for carrying out any work in pursuance of a
contract between the contractor and
The Central Govt. or any State Govt.
Any local authority.
Any company
Any statutory corporation.
Any co-operative society.
Any trust.
 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.
Insurance commission
SEC-194d
 Any person responsible for paying to a resident or
domestic company any income by way of insurance
commission will be required to deduct income tax
from such income at the rate of 10% during the
financial year.
 No TDS shall be deducted at source if such incomes
does not exceed Rs 20,000 in the financial year.
Section 194E (TDS on NR Sport Person/Association)
Rate: @ 20%
Amount: Any payment made
Payment of commission etc. on sale

of lottery tickets
 The person who is responsible for paying, any
commission, remuneration or prize exceeding Rs
15,000 to a person who is stocking, distributing,
purchasing or selling of lottery tickets shall deduct tax
at source thereon @5%.
TDS ON RENT
SEC-194i
 Who is liable to deduct ?

Every person other than individual and HUF
Individuals and HUFs liable for tax audit also required
to deduct at source.
 Rate:
On Plant & Machinery- @ 2%
On Land, Building & Furniture- @ 10%
Limit: Rs. 1,80,000 p.a.
Section 194H
(TDS on commission/brokerage)
Rate: @ 5%
Limit: Rs. 15,000
Section 1941A
(TDS on Purchase of Immovable Property)
Rate: @ 1%
Limit: Rs. 50,00,000
Section 194J –
Fees for Professional or Technical services
Who is to deduct tax?

Any person other then individuals and HUF (not
subject to tax audit)
Rate- 10%
Limit- Rs.30000
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. 2,50,000
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
THANK YOU

Tax Deducted at Source

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SOURCE

DHENKANAL AUTONOMOUS COLLEGE

 It is a person/company who is liable to deduct the TAX at

 Deductor is also termed as Employer in cases where the

 Tax has to be deducted @ specified in relevant section.

 Who is liable to deduct?

 TDS @average rate of Tax payable for FY

 Who will deduct tax at source? - The principle officer of

 Who will deduct the tax at source?

Tax will be deducted at source by bookmakers race

Payment of commission etc. on sale

 Who is liable to deduct ?

Who is to deduct tax?

Return can only be made electronic form as per

Form 16- Salary

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