TDS Return Filing Online in Gujarat
What do we mean by TDS?
TDS is a type of advance tax which is deducted from the earnings of an individual or an organization before the money is actually credited into that entity’s account, according to the Indian Taxation Code. The government is able to generate revenues by implementing the provisions of TDS on the earnings of individuals as well as businesses. Rules and regulations regarding TDS are controlled and governed under the Income Tax Act, 1961 by the Central Board of Direct Taxes (CBDT).
Example:
Abex Pvt Ltd make a payment for office rent of Rs 1,00,000 per month to the owner of the property.
TDS is required to be deducted at 10%. Abex pvt ltd must deduct TDS of Rs 10000 and pay balance Rs 90,000 to the owner of the property.
Thus the recipient of income i.e. the owner of the property in the above case receives the net amount of Rs 90,000 after deduction of tax at source. He will add gross amount i.e. Rs 1,00,000 to his income and can take credit of the amount already deducted i.e. Rs 10,000 by Abex pvt ltd against his final tax liability.
What do we mean by TDS returns?
What are the methods of TDS deduction
As commonly known, TDS is deducted on the payments made to the receiver. It means that the payments are done to the receiver after deduction of appropriate tax for the income in question. The amount of TDS that the receiver is liable to pay is deducted from the payment the receiver is liable to receive and the remainder is paid out. It is important to note that the liability to deduct TDS is of the deductor. For instance, in case of employer paying salary to employee, the employer is the deductor and the employee is the TDS deductee.
What are the payments on which TDS is deducted?
TDS is to be deducted on Salary, Payment of taxable accumulated balance of provident fund, Interest on securitie, Dividend, Interest other than interest on securities, Winnings from lottery or crossword puzzle or card game or other game of any sort, Winnings from horse races, Payment or credit to a resident contractor/sub-contractor, Insurance commission, Payment in respect of life insurance policy, Payment in respect of deposits under National Savings Scheme, 1987, Payment on account of repurchase of units of MF or UTI, Commission on sale of lottery tickets, Commission or brokerage, Rent, Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land), Payment of rent by an individual or HUF not subjected to tax audit under, Payment under Joint Development Agreement to a resident individual or HUF who transfers land or building as per such agreement, Professional fees, technical fees, royalty or remuneration to a director;Note: 2% if payee is engaged in the business of operation of call center, Payment of compensation on acquisition of certain immovable property, Payment of the nature referred to in section 10(23FC) or section 10(23FC)(a) or section 10(23FCA) by business trust to resident unit holders, Payment in respect of units of investment fund specified in section 115UB, Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016), Payment of contractual work, commission (not being insurance commission referred to in section 194D), brokerage or professional fees, by an individual or a HUF not covered under section 194C, section 194H and 194J, Payment in cash by banking company or co-op. bank or post office.
What if I fail to deduct TDS?
Disallowance of expenditure:
As per section 40(a)(i) of the Income tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
However, if tax is deducted or deposited in subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year.
Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.
As per Section 58(1A) (as amended with effect from the assessment year 2018-19), the provisions of section 40(a)(ia) and 40(a)(iia) shall also apply in computing the income chargeable under the head “Income from other sources”
Get answers to all your queries
To know the quantum of the tax deducted by the payer, you can ask the payer to furnish you a TDS certificate in respect of tax deducted by him. You can also check Form 26AS from your e-filing account at https://incometaxindiaefiling.gov.in You can also use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in
TDS follows the “pay as your earn” concept. It is deducted due to following reasons:
1) TDS facilitates the sharing of the tax collection responsibility between the deductor and the government, ensuring a regular inflow of cash to the later.
2) TDS enables salaried individuals to pay taxes in easy instalments each month, thus preventing them from the burden of lump sum tax payments.
3) It enables the government to receive the necessary funds all year round which aids it in running the country smoothly.
4) It ensures that the tax net is spread wide enough and prevents tax evasion.
