TAX DEDUCTED AT SOURCE
As the name suggests, Tax Deducted at Source aims to collect tax from the very source of income. Here, the specified assessee (deductor) making specified nature of payment to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government, if the amount of payment exceeds the threshold limit specified under TDS sections as specified below:
Non-deduction of TDS
Ø In case where the amount of payment does not exceed the aforementioned threshold limit, no TDS is to deducted.
Ø Further, in case of TDS deducted on interest credited to our account by banks: Where your income does not exceed the basic exemption limit, say 2.5 Lacs (or as applicable depending on your age), you can request your bank to not deduct TDS on the interest credited to your account, by filling Form 15G or 15H (in case of senior citizen).
Ø In order to obtain Lower TDS deduction Certificate, you can also apply to the Assessing Officer of the Income Tax Department through Form 13.
Based on Form 26AS or TDS certificate issued by the deductor, the deductee is eligible to avail credit in respect of the amount of TDS deducted from his income.
(1) The tax deducted/collected by government office, can be remitted to the Central Government without production of income-tax challan.
In such a case, the person to whom the deductor reports the tax so deducted and who is responsible for crediting such sum to the credit of the Central Government, shall submit a statement in Form No. 24G.to NSDL within the prescribed time-limit.
All sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income-tax Challan?
(2) By TDS return, as mentioned above, we refer the following:
Form 24Q: To be filled by the employer, in case of TDS deducted from salaried employees.
Form 26Q: In case of TDS deductions made for non-salaried person.
Form 27Q: For TDS deducted in case of NRIs.
Mode of Payment
Tax deducted at source (TDS) shall be deposited to the credit of the Central Government by following modes:
- Electronic mode is mandatory for All corporate assesses and others (to whom provisions of section 44AB are applicable).
- Physical Mode by furnishing the Challan 281 in the authorized bank branch
Consequences for violation:
- @1% p.m.(or part of month)- if TDS not deducted*
- @1.5% p.m. (or part)-if TDS deducted but not deposited**
- Rs. 200 Per day- if return not filed on time***
- penalty at the discretion of AO, ranging from Rs. 10,000 to 1,00,000****
*Interest is payable from the due date of deduction, to the date of actual deduction.
**Interest is payable from the due date of payment, to the actual date of payment.
***The total fees should not exceed the total TDS amount of that quarter. The late filing fee is payable, till the date of actual filing of return. And such late filing fee should be paid before filing such delayed eTDS statement.
****Delay in filing of TDs return- exceeding 1 year, or in case of incorrect details filed. This penalty is in addition to the penalty of Rs. 200 mentioned above.