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FAQs on Tax Deducted at Source (TDS)

In this content we will answer some frequently asked questions on TDS. Following are the some of the FAQs which would be handy for understanding TDS.

  Q. What is TDS?

In simple words TDS means Tax Deducted at Source. It is one of the methods of collection of taxes. This concept was introduced to collect tax at origin of income. Under this system the person who makes the payment is required to deduct tax at source at prescribed rates. The recipient receives the net amount i.e. after deduction of tax at source. The amount of tax deducted by the payer is remitted to the government on behalf of the payee.

 Q.What are the specified rates for TDS?

The specified rates of TDS are as follows:

        1.Where the person is resident in India

Where the person is resident in India-1Where the person is resident in India-2

       2. Where the person is not resident in India

Where the person is not resident in India-1Where the person is not resident in India-2Where the person is not resident in India-3

          3.In case of a company – Domestic Company

 In the case of a Domestic company-1In the case of a Domestic company-2

               4. Where the company is not a domestic company.

Where the company is not a domestic company-1Where the company is not a domestic company-2


 Q.When is TDS deductable/ what is the point of deduction for TDS?

As per the income tax act TDS is deductable from income on payment or at the time of credit whichever is earlier. However is case of Salary it is deducted at the time of payment.

 Q.What are the necessary requirements of the person deducting tax at source?

The person responsible for deducting tax at source has to follow the following procedures:

  i.Obtain a TAN( Tax Deduction Account Number)
ii.Tax should be deducted at applicable rates
iii.Tax deducted by him shall be deposited within the time limit specified to the of the central government.
v.File the TDS returns within due date
vi.TDS certificate must be issued to the payee

  Q.What is due date for payment of TDS?

The due date for payment of TDS challan for each month except for the month of March is on or before 7th of the next month. However for the amount deducted in the month of March the due date is 30th of April.

It is to be noted that the above mentioned due dates are applicable to all the non-government deductors and government deductors paying taxes with a bank challan.

However for government deductors who pay their taxes without producing a challan, the due date is the same day as the deduction date.

  Q.How to pay Tax deducted at source?

Tax deducted or collected at source shall be deposited to the credit of the Central Government by following modes:

1) Electronic mode: E-Payment is mandatory for
                                a) All corporate assesses; and

                                b) All assesses (other than company) to whom provisions of section 44AB of the        Income Tax Act, 1961 are applicable.      

2) Physical Mode: By furnishing the Challan 281 in the authorized bank branch

 Q.What if the deductor has failed to deduct TDS or fails to deposit the same to the government after deducting.

If TDS has not been deducted interest is levied @1% for every month or part of the month from the date on which it was deductable to the date on which it was actually deducted.

If TDS was deducted but not deposited timely, interest @1.5% for every month or part of month from the date on which was deducted to the date on which such tax was remitted to the government for payment.

Q.What are the due dates for filing quarterly TDS returns?

The due dates for filing quarterly TDS returns, both electronic and paper are as under:

S. no Date of ending of quarter of financial year Due Date
1. 30th June 31st July of the financial year
2. 30th September 31st October of the financial year
3. 31st December 31st January of the financial year
4. 31st March 31st May of the financial year immediately following the financial year in which the deduction is made


Q.What is rate of TDS if the payee does not furnish his/her Permanent Account Number?

If the person entitled to receive any income on which Tax is to be deducted does not furnish his/her PAN, tax shall be deducted at the higher of the following rates.
 i. at the rate specified in the relevant provisions of this act the rate or rates in force or, 20%

It is to be noted that this provision shall also apply if PAN provided to the deductor is invalid or does not belong to the deductee.

However there is an exception to this provision. The provisions of this section shall not apply to a non-resident, not being a company, or to a foreign company, in respect of—

i.payment of interest on long-term bonds as referred to in section 194LC and
ii.any other payment subject to such conditions as may be prescribed

  Q.Where is the amount of TDS deducted by the payer reflected?

The deductor after deducting the amount of TDS will have to furnish a TDS certificate indicating the amount of TDS deducted on behalf of deductee. However the amount of TDS deducted is also reflected in form 26AS of deductee. The deductee/payee can claim the credit of TDS deducted while filing his/her income tax return. Form 26AS is easily available from the income tax department portal i.e.

Q.What if the amount of TDS is not reflecting in Form 26AS?

A deductor when fails to file the return or fills up any incorrect information (wrong PAN) in the return then the amount of TDS does not reflects in the form 26AS of deductee. In this case the deductor has to correct the details.

Q.How to correct the details if there is any mistake in Original TDS return?

Correction in TDS return can be made by filing revise TDS return. Revised return can be filed multiple times to incorporate the changes.

Q.What if the payee requests the payer to pay the amount without deduction of TDS?

If according to the payee his total income (including the amount to be received from the payer) during the financial year will be below the slab i.e. the amount of taxes would be Nil then the payee with the help of form 15G (for individuals or person other than company or firm) or form 15H (for senior citizens) can request to payer not to deduct the tax at source.

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