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All About TDS
1. What is TDS?
TDS or Tax Deducted at Source is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest etc. by the persons making such payments. Usually, the person receiving income is liable to pay income tax.
2. When should TDS be deducted and by whom?
Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.
However, in case of rent payments made by individuals and HUF exceeding Rs 50,000 per month, are required to deduct TDS @ 5% even if the individual or HUF is not liable for a tax audit. Also, such Individuals and HUF liable to deduct TDS @ 5% need not apply for TAN.
3. What is the due date for depositing the TDS to the government?
The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month.
For instance:
TDS deducted in the month of June must be paid to the government by 7th July. However, the TDS deducted in the month of March can be deposited till 30thApril.
4. How to deposit TDS?
Tax Deducted at Source has to be deposited using Challan ITNS-281 on the government portal. Read our article for a step by step guide to deposit TDS.
5. How and When to file TDS returns?
Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS. TDS return is to be submitted quarterly and various details need to be furnished like TAN, amount of TDS deducted, type of payment, PAN of deductee, etc. Also, different forms are prescribed for filing returns depending upon the purpose of the deduction of TDS. Various types of return forms are as follows:
|
Form No |
Transactions reported in the return |
Due date |
|
Form 24Q |
TDS on Salary |
Q1 – 31st July Q2 – 31st October Q3 – 31st January Q4 – 31st May |
|
Form 26Q |
TDS on all payments except salaries |
Q1 – 31st July Q2 – 31st October Q3 – 31st January Q4 – 31st May |
|
Form 26QB |
TDS on sale of property |
30 days from the end of the month in which TDS is deducted |
|
Form 26QC |
TDS on rent |
30 days from the end of the month in which TDS is deducted |
6. What is a TDS certificate?
Form 16, Form 16A, Form 16 B and Form 16 C are all TDS certificates. TDS certificates have to be issued by a person deducting TDS to the assessee from whose income TDS was deducted while making payment. For instance, banks issue Form 16A to the depositor when TDS is deducted on interest from fixed deposits. Form 16 is issued by the employer to the employee.
|
Form |
Certificate of |
Frequency |
Due date |
|
Form 16 |
TDS on salary payment |
Yearly |
31st May |
|
Form 16 A |
TDS on non-salary payments |
Quarterly |
15 days from due date of filing return |
|
Form 16 B |
TDS on sale of property |
Every transaction |
15 days from due date of filing return |
|
Form 16 C |
TDS on rent |
Every transaction |
15 days from due date of filing return |
You can easily file your TDS returns through Clear Tax software i.e. It is an online TDS software that requires no download or desktop installation or software update. It helps you to prepare regular & correction e-TDS statements online easily with just a few clicks on your computer. It is also compatible with TDS returns of previous financial years for easy import. Also, you can generate your TDS certificates using Clear TDS.
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