"In India, tax deductions at source (TDS) are made at the point of payment. Entities and individuals who engage in TDS deductions are legally obligated to file TDS returns quarterly, providing detailed information on these deductions. While the process of filing TDS returns and paying TDS online can be complex, Vyapaar Registration makes it easy. Our experts assist you throughout the process, ensuring that your TDS return filing is accurate, timely, and fully compliant.
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TDS (Tax Deducted at Source) is when tax is deducted by the payer at the time of making certain payments like salary, rent, interest, or commissions. The payer is responsible for depositing the deducted tax online. The recipient receives the net amount after TDS is deducted and must report the full amount (before TDS) in their tax return. This system ensures the government collects taxes on time.
TDS should be deducted by individuals, Hindu Undivided Families (HUFs), firms, companies, and other entities based on the Income Tax Act, 1961. The obligation to deduct TDS depends on specific conditions and the turnover of the business.
Once TDS is deducted, it must be deposited with the government within the specified timelines. Timely deposit is essential to comply with tax regulations and avoid penalties.
The TDS deposit should be made by the 7th of the month following the deduction. For TDS deducted in March, the deposit deadline is usually by April 30 (for most cases) or by March 31 (for certain government deductors).
TDS is typically deducted on payments such as:
1. Salaries
2. Rent
3. Contractor or subcontractor fees
4. Professional fees
5. Commissions
6. Interest (excluding interest on securities)
TDS forms vary based on the income type or the category of the deductee. These forms must be submitted quarterly to maintain compliance with the Income Tax Act.
| Form | Filing Frequency | Purpose |
|---|---|---|
| Form 24Q | Quarterly | For TDS on salaries under Section 192. Shows salary payments and TDS deducted by employers. |
| Form 26Q | Quarterly | For TDS on all payments except salaries. Includes interest, commission, rent, etc. |
| Form 27Q | Quarterly | For TDS on payments (except salary) made to non-residents and foreigners. |
| Form 27EQ | Quarterly | For reporting tax collected at source (TCS) under Section 206C. Applicable to both corporate and government entities. |
Filed by employers for salary payments and TDS details.
Used for non-salary payments and TDS deductions.
Specifically for payments to NRIs and foreign entities.
Involves tax collection at source (TCS) reporting.
Employers, organizations with a TAN, individuals under Section 44AB audit, and government/ corporate entities filing quarterly returns online.
Individuals, HUFs, corporations, partnerships, local authorities, and associations.
Submit correct forms before the due date to avoid legal issues.
o Salary payments
o Income from securities
o Winnings from lotteries, puzzles, and horseraces
o Insurance commissions
o Payments related to the National Savings Scheme and more.
Filing TDS returns is a legal requirement for all tax deductors. Non-compliance can lead to penalties and legal issues.
TDS returns serve as a transparent record of taxes deducted at the source of income, ensuring accountability.
Filing TDS returns allows taxpayers to verify that the correct tax amount has been deducted and paid to the government.
Taxpayers can claim credit for TDS against their total annual tax liability, helping prevent overpayment.
When excess tax is deducted, TDS returns streamline the refund process during income tax filing.
TDS filing ensures adherence to tax regulations and promotes transparency in financial transactions.
Timely filing of TDS returns aids the government in revenue collection, contributing to national development.
Comprehensive summary of TDS Rates for the Financial Year 2023-24 and 2024-25, including relevant sections, threshold limits, TDS rates, and applicability. This table covers key sections for TDS under the Income Tax Act for AY 2025-26 with simplified thresholds, rates, and applicability.
| Section | Description | Threshold Limit | Rate (%) | Deducted From |
|---|---|---|---|---|
| 192 | Payment of salary | Normal slab rate | As per income slab | Employee salary |
| 192A | Payment of accumulated balance of provident fund | - | 10 | Provident fund |
| 193 | Interest on securities | - | 10 | Interest |
| 194 | Income by way of dividend | - | 10 | Dividend income |
| 194A | Interest other than on securities | 10 | 10 | Interest income |
| 194B | Winnings from lotteries, puzzles, games, gambling | - | 30 | Prize winnings |
| 194BA | Winnings from any online game | - | 30 | Online game winnings |
| 194BB | Winnings from horse races | - | 30 | Horse race winnings |
| 194C | Payment to contractors/sub-contractors | - | 1 (Individual/HUF), 2 (Others) | Contractor payments |
| 194D | Insurance commission | - | 5 | Commission income |
| 194DA | Payment in respect of life insurance policy | - | 5 (till 30-09-2024), 2 (w.e.f 01-10-2024) | Insurance payout |
| 194EE | Payment under National Savings Scheme | - | 10 | Savings scheme payout |
| 194F | Repurchase of units by Mutual Fund or UTI | - | 20 | Repurchase amount |
| 194G | Commission on lottery tickets | - | 5 (till 30-09-2024), 2 (w.e.f 01-10-2024) | Lottery commission |
| 194H | Commission or brokerage | - | 5 (till 30-09-2024), 2 (w.e.f 01-10-2024) | Commission income |
| 194I | Rent for plant/machinery & land/building | - | 2 (Plant & Machinery), 10 (Land/Building) | Rental income |
| 194-IA | Payment on transfer of immovable property | Rs. 50 Lakhs | 1 | Transfer amount |
| 194IC | Monetary consideration under JDA | - | 10 | JDA consideration |
| 194J | Fees for professional/technical services | - | 2 (Tech services, Call center), 10 (Others) | Service fees |
| 194LA | Compensation on acquisition of immovable property | - | 10 | Compensation amount |
| 194M | Payment of commission, brokerage, contractual/professional fees by non-TDS entities | Rs. 50 Lakhs | 5 (till 30-09-2024), 2 (w.e.f 01-10-2024) | Payments to professionals |
| 194N | Cash withdrawal exceeding limit | Rs. 20 Lakhs/Rs. 1 Crore | 2/5 | Cash withdrawals |
| 194O | Payment by e-commerce operator | Rs. 50 Lakhs | 1 (till 30-09-2024), 0.1 (w.e.f 01-10-2024) | E-commerce payments |
| 194Q | Purchase of goods exceeding limit | Rs. 50 Lakhs | 0.1 | Purchase amount |
| 194R | Benefit or perquisite exceeding Rs. 20,000 | Rs. 20,000 | 10 | Benefit/perquisite |
| 194S | Transfer of Virtual Digital Asset | Rs. 10,000 (Others), Rs. 50,000 (Specified) | 1 | Sale consideration |
For accurate and up-to-date TDS rates and limits, always refer to official notifications from the Income Tax Department.
TDS Rates are subject to periodic revisions and updates from the CBDT, so it’s important to check the latest updates.
Threshold Limits indicate the minimum amount of payment that must be made before TDS is applicable.
TDS is applicable on various payments such as salary, rent, professional fees, and interest, with specific rates depending on the nature of payment.
TDS rates for non-residents may be higher than for residents, and the application of DTAA (Double Taxation Avoidance Agreement) can alter the rate.
Non-compliance with TDS provisions, including late payment or incorrect filing, can lead to penalties.
Timely submission of TDS returns as per the deadlines above helps maintain compliance and avoid penalties.
| Quarter | Duration | Last Date to File TDS Return |
|---|---|---|
| Q1 | April - June | 31st July |
| Q2 | July - September | 31st October |
| Q3 | October - December | 31st January |
| Q4 | January - March | 31st May |
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