Any persons responsible for making specified payment (check here specified payment) as prescribed in income tax are liable to deduct tax at source. The obligation to deduct tax at source is upon the person responsible for paying the income/amount which is subject to TDS.
In simple language
- Two parties i.e. Payer and Payee.
- Payer makes payment to payee.
- Payer deduct TDS (tax deduction at source) means tax at the time of payment to payee.
- Payer responsible to pay this TDS/tax to government.
What is the rate of TDS?
Its depends on the nature of payment you are paying. For example if you are paying salary then the tds rate will be applicable as per income tax slab. (See income tax slab here). If you are paying commission to someone then the TDS rate will be applicable as prescribed on commission i.e. 5% under section 194H. (See TDS on commission here). Check TDS Rates here
Who are Liable to Deduct TDS?
The following persons are liable to deduct TDS and deposit to government on behalf of deductee. Income Tax Act require specified persons to deduct tax on particular types of payments being made by them. The list of such persons requiring to make TDS is contained in TDS provision listed here. The following are the specified person who are liable to deduct TDS.
- Any person other than individual & HUF
- Individual and HUF required to deduct TDS, if last year turnover exceed Rs.1 Crore in case of business or Rs.50 lakh in case of profession.
Responsibilities of Payer / TDS Deductor
- Persons who are liable to deduct TDS as per above stated conditions must apply for allotment of ‘TAX DEDUCTION AND COLLECTION ACCOUNT NUMBER’ (TAN) in form No. 49B within one month from the end of the month in which tax was deducted. TAN is mandatory to mention on all transaction related to TDS like TDS certificate, TDS Returns and other related documents. There is penalty of Rs. 10,000 on failure to apply TAN. Apply TAN online here (NSDL official website)
- He is to deduct tax from the income/payment mentioned in the various sections.
- The amount so deducted should be deposited in challan no.281
- The payer should prepare such statement/returns and file the same with the specified period. (Check TDS return due dates)
When Payee’s PAN not Available?
If payee does not furnish his PAN to the payer, the TDS rate shall be as follows:
- (i) Rate as per respective section of TDS or (ii) Rate @20% whichever is higher
- For section 194-O/194Q rate is 5% instead of 20%
Payee Responsibility
If the payment is made by the payer without TDS, then payee shall be responsible to make payment of tax directly. However, if the tax has been deducted by payer, but not deposited with Government, then payee cannot be called up on to pay that much tax.
There are also some conditions where is no liability of deductor to deduct TDS as follows.
- On declaration furnished by payee on Form 15G or 15H as the case may be
- On certificate issued by ITO
- Payment to Government/RBI/Statutory Corporation etc.
- Exempt Incomes
- Interest Payment by Offshore Banking Unites
- Payment to New Pension System Trust
- Notified payment to Notified Institutions/Associations
Hi. I just want to clarify that an individual who is receiving prof fees more than 50 lacs but is not liable for tax audit for the reason that he is opting for Sec 44ADA. In that case, is it mandatory for him to obtain TAN No. and deduct tds on his payments.
Yes. It’s Now Turnover Base
Which is last date /dead line date to submit IT returns for year 1..4.16 to 31.3.17 for indivudal ?
TDS DEDICATED BY MY DDO IN AY 2014-15 YET INCOME TAX DEPARTMENT SENDING ME NOTICE FOR OUTSTANDING TAX. WHAT TO DO. I HAVE ALREADY SUBMITTED TDS CERTIFICATE ISSUED BY THE DEDUCTOR WITH THEIR TAN NUMBER.
If I am a Branch, and my H.O. is making payment to someone on my behalf, then who will be liable to deduct and deposit TDS (whether Branch or H.O.)? Kindly clarify.
TDS is applicabale to AOP??
What are the Exemted sales and in which conditions we need not to deduct tds.
THANKS A LOT FOR TDS GUIDANCE……..
I am getting 10k as contract fee per month from pvt limited for technical service. Will tds will be deducted if i submit 15g
thanks a lot
what is the slab for TDS in AY 2016-17 and on which amount of turnover, receipt TDS is deductable?
Sir,
My name is Sachin,
We are Fix Diposited Rs. 200000.00 a Credit Co-opp.Society.
then he told him to Tax Deducted in Intrest Amt.at the maturity time.
My Income is more than taxable limit.so we do not given 15G.
so please give me information about of TDS.
My knowledge is only Bank ( co-opp bank) are liable to Deduct TDS.
So Please give me suggetion….
Can colleges deduct TDS?
Can you please specify the Notification / Circular / Rule exempting small employers (individuals / HUF etc. not subject to tax audit) from deducting tax at source.
i am individual do i need to deduct tds on commission paid by me .i am not in any proffesion. i am one of the partner in partnership bussiness . but this commission is paid on my personal property given on rent . and the commission paid by me to person who bring the party as tenent . it is commercial property and not for residential purpose
My turnover is 2 crore. How to apply for TAN.
Is individual liable to deduct tds on land purchase from resident u/s 194-IA &195 from NR for an amount exceeding Rs.50lakhs.
1.For Personal use-only salary income
2.For Commercial purpose but not liable for Tax Audit.
Can we say liability of individual to deduct tds is only if he is liable for Tax audit in all cases/not.
I wish to open a research centre. I may get funds from interested donors. Should I get a TAN and TIN Nos for that?
If I get TAN and TIN and not use it, what will be the consequences?
Sir, If you are getting refund, you don’t need to get TAN. Its only require when you make payment to someone and its added his/her income. So you have to deduct TDS on that. So here you are receiving funds so you don’t need to deduct TDS of anyone.
On 12.02.2015 payment of Rs.220000 made to Arvind for purchase of diaries made according to specifications of ABC Ltd.However no material was supplied for such diaries to Arvind by ABCLtd.
pls i need the answer for this question.
Sorry Reshma..ok then what is your question about the situation??
Any employees are liable for deduction of TDS from their salary
our business will be less than Rs 1.00Crore during the FY 2015-16, can we liable to deduct tds
asish
I am consulting physio in hospitals as per only call basis. .they give me 20000 rupees for the 3 years…Should they deduct TDS from me ?
I am an independent professional. For AY 2014-15, I will probably invoice Rs.20 lac worth of services. I use different partners to help me. I will end up paying one partner approximately Rs. 7 lacs and another one Rs. 1 lac. Is the TAN requirement solely based on my income? Or will IT dept consider the payments made to contract partners also? I generally work alone and do not outsource regularly. Is there a way to get official waive off for getting a TAN as an individual professionals?
What’s rate of TDS on Courier payment in year Rs. 2 to 3 lacs p.a. or below 1.00 p.a. pl suggest
SALE OF SCRAPE IS IT INCOME ………………? & IT IS CHARGEABLE TAX ON INCOME OF SALE OF SCRAP………..
THANKS IN ADVANCE…………….!!!
Yes, Income from sale of scrap is taxable under Income Tax
sale of scrape it is an income to us, & it is chargeable tax on income……..?
I think you should not deduct the TDS. Individuals are liable when their accounts are audited u/s 44AB
I am Individual Having Business, My turnover FY 2013-14 Is Rs.48 lacs and net loss is 9 lac and others income is Rs.90 thousand only.Is TAX AUdit by CA is Necessary & If I get TAX Audit Done,Am I applicable for TDS Registration or Deduction in the Next FY 2014-15 ???????
Tax Audit is not compulsary in this case. Because your business Turnover is less than Rs. One Crore
I am individual , my income is from professional software consulting . I do not own any registered business and i do my work through freelance sites like Elance etc .
I pay a couple of persons who are working for me . My annual income would be close to 5 to 7 lakhs .
I pay the persons who are working with me , which would be around 4 lakhs .
Should i deduct TDS for them ? Should i get a TAN no?
Is deducting TDS in my case mandatory ?
Thanks in advance..!!!
You are able to get a lot of info for free, isn’t it ? So, don’t worry about his grammar. Just say thanks for the info. For most of us, English is not our mother tongue, so, grammar mistakes ? Chalta hain 🙂 not a big deal, not a big deal at all.
thanks a lot for these info. great web site.
I have received an invoice from Trust and the service fee is for towards presentation fee for participating at six sigma level competition; will the TDS be deducted u/s 194J.
Well said, Sir !
Thanks Great Information Please Carry on your work is praise worthy
Simply Superb,,,,,,,,,,,Thank You Soomuch