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TDS expands to Tax Deducted At Source. It has a special significance in Indian Taxation that has a significant bearing on the taxpayers. It was introduced with an aim to collect tax from the very source of income and reduce the burden on Tax Collection Agencies to collect tax significantly reduces. Under this concept, any deductor who is liable to make payment of specified nature to any other person or deductee shall deduct tax at source and remit the same into the account of the Central Government. It is currently applicable on payments such as salaries, rent, professional fees, brokerage, commissions, etc. In this article, we’ll get to learn more about TDS, its rates, and its online filing procedure.

 

When should TDS be deducted and by whom

TDS is incurred at the source of income along with the TCS. Any person making specified payments mentioned under the Income Tax Act is required to deduct TDS at the time of making such specified payment. But no TDS has to be deducted if the person making the payment is an individual or HUF whose books are not required to be audited.

For Instance- Let’s say that the nature of payment is professional fees and the specified tax rate is 10%. Any Ltd makes a payment of Rs 40,000/- towards professional fees to Z, then Axy Ltd shall deduct a tax of Rs. 4,000/- and make a net payment of Rs. 36,000/- to Z. They will directly deposit the amount of Rs. 4,000/- deducted by Axy Ltd to the credit of the government.

 

Due Dates of FY 2021-22 for Return Filing

The due dates for TDS Payment filing for FY 2021-22 are as follows:

Quarter

Period

Due Date for filing

Quarter 1

April 2021 to 30 June 2021

31 March 2022

Quarter 2

July 2021 to September 2021

31 March 2022

Quarter 3

October 2021 to December 2021

31 January 2022

Quarter 4

January 2022 to March 2022

30 June 2022

 

TDS rates

Any person paying income is responsible to deduct tax at source and depositing TDS within the stipulated due date. Different types of payments on which TDS is applicable are governed by around 20 to 25 sections. A few common types of payments on which tax is to be deducted at source along with the relevant section and TDS rates applicable are discussed below.

Nature of Payment and Section

Threshold

Individual/ HUF TDS Rate

Premature withdrawal from EPF, 192A

₹50000

10%

Salaries,192

As per the employee’s IT declaration

10%

Dividends,194

₹5000

10%

Interest on securities,193

₹10000

10%

Interest from banks,194A

₹40000

10%

Senior citizen,194A

₹50000

10%

Single contractor payment,194C

₹30000

1%

Aggregate contractor payment, 194C

₹1 lakh

15%

Insurance commission (15G and 15H allowed), 194D

₹15000

5%

Life insurance policy, 194DA

₹1 lakh

1%

NSS,194EE

₹2500

10%

Repurchase units by MFs, 194F

20%

Commission from the lottery,194G

₹15000

5%

Brokerage,194H

₹15000

5%

Rent of plant, machinery, or equipment, 194I(a)

₹2.40 lakh

2%

Rent of building, land, and furniture, 194I(b)

₹2.40 lakh

10%

Transfer of immovable property besides agricultural land, 194IA

₹50 Lakh

1%

Rent by Individual / HUF (w.e.f. 1st June 2017), 194IB

₹50000 per month

5%

Payment under agreement applicable from FY 2017-18, 194IC

10%

Fees-tech services, call center, etc., 194J (a)

₹30000

2%

Fee for royalty or professional service, 194J (b)

₹30000

10%

Compensation on the transfer of immovable property other than agricultural land, 194LA

₹2.50Lakh

10%

Payment of dividends by mutual funds, 194K

₹5000

10%

Infrastructure debt fund income (TDS rate for NRI), 194LB

5%

Interest on specific bonds and Government Securities, 194LD

5%

Cash withdrawal in the previous year from one or more accounts with a lending institution, 194N

₹1 crore

2%

An individual or HUF payment to commission or brokerage, 194M

₹50 Lakh

5%

Purchase of goods, 194Q

₹50 Lakh

0.10%

TDS on e-commerce, 1940

₹5 Lakh

1%

 

Filing TDS Returns Online

→ It is mandatory for corporate and government deductors to furnish their TDS and TCS returns in electronic form (e-TCS return) from F.Y. 2004-2005 onwards.
→ e-TDS/TCS return has to be prepared in the data format issued by the e-Filing Administrator which is available on the Income Tax Department website and NSDL-TIN website.
→ There is validation software available along with the data structure which should be used to validate the data structure of the e-TDS/TCS return prepared.
→ Filing of the revised TDS Return can only be done if the TIN central system accepts the original return.

 

Procedure

Step 1: Go to http://incometaxindiaefiling.gov.in/.

Step 2: Enter your credentials and enter Captcha to log in.

Step 3: Once you’ve logged in, click on the “TDS” menu and select “Upload TDS” from the drop-down list.

Step 4: You will be provided with a form where you will need to select the correct details. Once the details are selected, click on Validate. The returns can be validated through the following modes:

Validate using DSC or Digital Signature Certificate. The TDS statements can be uploaded using DSC. To upload using DSC, first, upload the TDS zip file and also attach the digital signature file. Then, click on Upload. Once the TDS statement is uploaded, a success message will appear on the screen and a confirmation mail will be sent to your registered email ID.

Validate using Electronic Verification Code. After step 4, if you haven’t generated a DSC, you will be able to validate the TDS statements using an electronic verification code (EVC).

Step 5: Upload the TDS zip file and click on ‘Click here to E-verify’.

Step 6: Once you are done with form validation, submit the form. After successful submission, a message will be displayed on the screen and a confirmation mail will be sent to the registered email ID.

The status of the return can be checked by providing the Provisional Receipt Number and the PAN details on the official website of the NSDL.

 

Conclusion

TDS acts as a steady source of revenue for the Government. It is a vital component that governs multiple income-based transactions in the country. It ensures that people do not evade the payment of taxes. Hence, it is vital for an individual or a company that is bound under the law to fulfill their tax obligations timely. If TDS has been deducted from your salary, you can get it refunded, provided you file your returns on time.

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