Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting prescribed percentage. It is managed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS). It has a great importance while conducting tax audits. Assessee is also required to file quarterly return to CBDT. Returns states the TDS deducted & paid to government during the Quarter to which it relates.
Contents
TDS on Dividends
Section 302of Income Tax Act, 1961 by law notes.
TDS on immovable property
Section 194I of Income Tax Act by Freakans.
This TDS on property is required to be deposited in 30 days from the end of the month in which deduction is made for all payments to be made on or after 01st June 2016. Before 01.06.2016 time limit to deposit TDS on property is 7 days from the end of the month in which deduction is made
Section 194C of Income Tax Act
Section 194C of Income Tax Act - Tax need to be deducted 1% (for individual, HUF)/ 2% (for others) of payment where payment is made for carrying out any work (including supply of labour for carrying out any work and advertisements) by a contractor/sub-contractor. Such work must be in pursuance of a contract (including sub contract) between the contractor and payer. TDS is to be made at the time of credit to the account of contractor or at the time of payment in cash or by cheque or draft or by any other mode whichever is earlier.
Tax Collected at Source
Tax Collected at Source (TCS) is income tax collected by seller in India from payer on sale of certain items. It is provided in section 206C of Income Tax Act 1961. The seller has to collect tax at specified rates from the payer who has purchased these items : category a
category b (grant of lease\license of the following
category c
category d
Example:- Sale of scrap by X to Y for Rs 500000
Y Pay amt of 500000 for scrap + VAT + TCS@1%
Sale Amt 500000
VAT Amt@5% 25000
TCS Amt@1% 5000
Total Amt 530000
This is the amount paid by buyer and buyer will get the TCS Paid Certificate from seller. Buyer take the credit of TCS at the time of filling of return of their income. Seller has to pay the amt to govt with the due date and file return of the TCS paid quarterly.
TDS Certificates
A deductor is required to issue a TDS certificate called form 16 for salaried employees and form 16A for non salaried employees within a specified time.
He has to issue TDS Certificates within two month of the next financial year
Impact of non-compliance to TDS
Income Tax Act, 1962
TDS rate chart for FY 2015-16 & AY 2016-2017
TDS rate chart for FY 2015-16 & AY 2016-2017. Tax is deductible chart is available from Section 192 to Section 206.dip