What is TDS ?
Tax Deducted at Source (TDS) is a tax deduction made by an individual or a company while making any payment. The TDS is to be deducted if the payable amount exceeds a certain specified limit. The deduction is mandatory as per the provisions of Income Tax Act, 1961. The return from fixed deposits, TDS Returns For Salary, income from services provided to customers, and many other sources of income are paid after tax deduction. The payer deducts the tax and pays it to the Income Tax Department for the payee.
What is TDS certificate?
A TDS certificate is issued by the deductor to the deductee while making a payment. Some of the TDS certificates issued by the deductor is as under:
- Form 16 is given in case of salary payments.
- Form 16A is given in case of non-salary payments.
- Form 16B is given in case of sale of the property.
- Form 16C is issued for rent payments.
When should TDS be deducted and by whom?
Tax at source is deducted when a payment is due or when it is made by any person under the Income Tax Act. TDS Return can be deducted by
- Employersin the case of private employment
- Employees if they are making the payment on behalf of the employer
- Local authorities or companies if there is any interest on securities
- Drawing and disbursing officers in the case of government employment
If any person is making the payment to an individual or Hindu Undivided Family (HUF), and is not obliged to have their books audited, then such person is not liable to deduct tds. Any person deducting tax at source is liable to deposit tds with government on or before 7th of the subsequent month.
Taxcellent helps you in calculation of tax at source to be deducted.
FAQs About TDS on Purchase of Property