TAX DEDUCTED AT SOURCE

Tax Deducted at Source, as the name suggests, is the tax deducted at the time the income is received by or credited to the “person” so that collection of tax is preponed and there is regular flow of taxes to the government. TDS is deducted on various types of income such as salary, interest on bank deposits and bonds, winnings from lotteries and horse races, payment to contractors and sub-contractors, insurance commission, commission or brokerage, rent, fees for professional and technical services, etc.

TDS has to be deposited to the credit of the Central Government and TDS Returns should be filed within due dates prescribed by the Income Tax Act, 1961. TDS Certificates have to be issued by the deductor giving details of tax deducted so that the same is adjusted against income tax payable for the year by the deductee. A mandatory 10 digit Tax Deduction Number (TAN) is also required to be obtained by the deductor for this purpose.

Non Compliance with any of the provisions of the Income Tax Act in respect of deduction and deposit of TDS, filing returns, obtaining TAN etc. leads to severe penalties. Hence, it is advisable to take expert help in order to avoid any kind of liability. VAA provides a whole range of services which can completely take care of your Income Tax issues including TDS.

TDS HIGHLIGHTS

TAN Registration

TAN is a 10 character alpha-numeric code issued by the Income Tax Department for persons responsible for deducting or collecting tax at source. It can be obtained in 5-10 working days from the time of submission of application with the required documents.

TDS Returns

TDS has to be deposited monthly within 7th of the following month. TDS Returns are to be filed quarterly within 15th of the month following the quarter for which the return is being filed. Only return for the quarter ended March is filed by the 15th of May.

Penalty

Failure to deduct tax at source shall attract penalty equal to the amount of tax deductible along with interest @ 1% per month. There are various other rigorous penalties for non-deposit, short deposit or late deposit.

TDS Sections

TDS is deducted under various sections depending upon the nature of income such as Salary, Rent, Interest, Income from Catering, Advertising, Royalty etc. The rates of TDS and threshold limits are different under different sections. Hence, one has to be careful to deduct tax under the appropriate section.