TAX DEDUCTED AT SOURCE (TDS)

Introduction​

TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get a credit for the amount so deducted on the basis of Form 26AS for the TDS certificate issued by the deductor.

Fees for professional or technical services 194J

Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of

a)  Fee for professional services,

b)  Fee for technical services

c)  Royalty,

d)  Remuneration/fee/commission to a director or

e)  For not carrying out any activity in relation to any business

f)  For not sharing any know-how, patent, copyright, etc.

Threshold limit:

The tax has to be deducted in case the payment is greater than Rs. 30,000 during the year. However, there is no such limit for payments made to a director. The tax will have to be deducted no matter how small the amount.

Rate of deduction of tax:

Any payment covered under this section shall be subject to TDS at the rate of 10%

With effect from June 1, 2017, the rate of TDS would be 2% in the case of the payee engaged in the business of operation of call center.

In case the payee does not furnish his PAN then the rate of the deduction would be 20%

Time for Deposit of TDS deducted

For the month of March On or before 30^th April

Other months within 7 days from the end of the month in which deduction is made.

Filing of return

The quarterly return of TDS shall be filed by the following dates

1. For Quarter ending 30^th June – 31^st July of the financial year

2. For Quarter ending 30^th September – 31^st October of the financial year

3. For Quarter ending 31^st December – 31 ^st January of the financial year

4. For Quarter ending 31^st March– 31^st May of the financial year immediately following the financial in which such deduction is made.