CA Ankita Mathur
For quick and efficient collection of taxes, Income Tax Department has launched the system of deduction of tax at the point of generation of income. The provisions of TDS as contained in Income Tax Act, 1961 applies to several payments like salary, interest, commission, brokerage, professional fees, royalty, etc. The person deducting the tax has to deposit the tax within a prescribed time and file TDS return also.
Every person (i.e. the payer) other than an individual or Hindu Undivided Family (HUF) is liable to deduct tax at source from specified payments. However, an individual or HUF is liable to deduct TDS if such individual or HUF was liable to get his/its accounts audited under section 44AB in the preceding financial year.
When TDS is to be Deducted, at What Rate?
TDS is deducted on payment in respect of specified transactions under the Income Tax Act. Different rates are being prescribed for different transactions. The relevant provisions of TDS are contained in Chapter XVII-B of Income Tax Act, 1961. The most commonamong tax deductions is the TDS on Salary,under Section 192 which says all personsrequired to deduct TDS should withhold taxes at source while paying salary to their employees.
TDS Deposit& Due Date
TDS deducted by the deductor is to be deposited with the government via Challan No 281. In this challan one needs to mention TAN (Tax Deduction Account Number), name and address for depositing the tax. A separate challan is required for each deduction made under different sections.
The due dates for depositing TDS through challanwith the government are:
|Particulars||For Government Deductor||Other Deductor|
|April to February||7th of succeeding month||7th of succeeding month|
|March||7th April||30th April|
|TDS on sale of immovable property (194IA)
TDS from rent by individual and HUF(194IB)
|30 days from the end of month of deduction of tax|
While making online payment, it should be noted that payment made after 8.00 pm is considered as made on next day. Interest at the rate of 1.5% (per month or part)is attracted if there is delay in depositing TDS.
E.g. M/s ALTD deducts TDS of Rs 2,000 for the month of July 2017 while making payment to a contractor. M/s A LTD will have to deposit the TDS with the government by 7th of August 2017.
TDS return is a form which is to be filed by every person deducting TDS. TDS deducted by the deductor is paid to the government through challanno 281.After depositing the TDS,the deductor files TDS return with the government on the due date.
Different forms have been prescribed for filing TDS returns; each differs on the basis of the nature of transaction.A brief about the forms is given below:
|Form 24Q||Statement of TDS for salaries|
|Form 26Q||Statement of TDS for payments except salaries|
|Form 27Q||Statement of TDS from interest, dividend or any other sum payable to a non-resident|
TDS Return Due Dates
The TDS returns due dates have been changed from 2016 onwards, and they are as follows:
|Quarter||FORM 24Q and 26Q||FORM 27Q|
|April to June||31st July||31st July|
|July to September||31st October||31s October|
|October to December||31st January||31st January|
|January to March||31st May||31st May|
TDS is a tool used bygovernment to curb tax evasion. Hence tax payers should have a proper understanding of TDS returns to avoid any penalty and interest, and also ensure that they are not duped by any deductor in the name of TDS.
CA Ankita Mathur (business services-H&R Block India Private Limited), author of this article, can be reached for assistance regarding GST compliant invoicing at [email protected].