Google trend - TDS

TDS - 10 things to know with detail

• What is TDS: TDS stands for Tax Deducted at Source. It is a system introduced by the Income Tax Department of India to collect tax at the source from where an individual's income is generated.
• Applicability: TDS is applicable to various types of payments such as salary, interest, commission, rent, professional fees, etc. If the amount exceeds a certain threshold, TDS is deducted at a specified rate.
• TDS Rates: The rates at which TDS is deducted vary depending on the type of payment being made. For example, the TDS rate on salary income can range from 10% to 30%, while the TDS rate on interest income can be 10%.
• TDS Deduction: TDS is deducted by the person making the payment (known as the deductor) and is deposited with the government on behalf of the payee (known as the deductee).
• TAN Number: To deduct TDS, the deductor is required to have a Tax Deduction and Collection Account Number (TAN). This number is used for all TDS related transactions and filings.
• TDS Certificate: After deducting TDS, the deductor is required to issue a TDS certificate to the deductee. This certificate contains details of the TDS deducted and deposited with the government.
• TDS Return: The deductor is also required to file a TDS return with the Income Tax Department on a quarterly basis. This return contains details of all TDS deducted and deposited during the quarter.
• TDS Refund: If the amount of TDS deducted is more than the actual tax liability of the deductee, they can claim a refund by filing their income tax return.
• TDS Exemption: Certain types of income are exempt from TDS deduction, such as agriculture income, dividend income, and certain interest income up to a certain limit.
• Penalty for Non-Compliance: Failure to deduct TDS or deposit it with the government can result in penalties and interest charges. It is important for deductors to comply with TDS rules to avoid any legal implications.