TDS – TAX DEDUCTED AT

SOURCE

FCA Vishal Poddar

A Student of GSTTM
1
 General Rules For TDS
[1] Applicability of TDS Provisions :
[A] Who is Responsible for deducting TDS ?
Every person is liable to deduct TDS on eligible payments except individual & HUF’s. individual/HUF whose total sales, gross
receipts or turnover from business or profession exceeds Rs 1 crore in case of business or Rs 50 lakhs in case of profession
during the immediately preceding F.Y.
Exception : - Individuals and HUF’s (not liable for Tax Audit) are also required to deduct TDS on following payments :-
1. Salary
2. Winnings
3. Rent u/s 194IB
4. Payment to builder u/s 194IC
5. Payment to contractors/commission/professional fees u/s 194M
6. Payment u/s 194IA
7. 194E – Payment to non-resident sportsman/entertainer

[B] Eligible Payments

It means the specified payments exceeding respective threshold limit.
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A Student of GSTTM
 General Rules For TDS
[2] Procedural Compliances
[A] Registration :-
Person liable to deduct TDS shall register himself for the purpose and shall have TDS Registration Number known as TAN (Tax
Deduction & Collection A/c Number).
Exception :- In following cases TAN is not required i.e. for deducting TDS the payer need not have TDS registration - TDS u/s
194IA, 194IB, 194M.

[B] When TDS is liable to be deducted ?

TDS on specified payments shall be made earlier of :
1. At the time of payment
2. At the time of credit to the A/c of payee.
Exception :- In following cases TDS has to be deducted only at the time of payment.
Sec. 192 - Salary, Sec. 192A – Premature withdrawal from Provident Fund, Sec. 194B/194BB – Winnings, Sec. 194DA – Payment
under Life Insurance Policy, Sec. 194EE – Payment of deposit under NSS, Sec. 194LA – Compensation for compulsory
acquisition, 194N – Cash withdrawal.

FCA Vishal Poddar

A Student of GSTTM
 General Rules For TDS
[2] Procedural Compliances
[C] TDS to be deducted at what rate ?
In general TDS rate is 10%.
Exception :-
1. Sec. 192 :- Salary – There is no TDS rate prescribed. The employer shall deduct TDS equal to tax payable on the total
income of the employee. (Including Surcharge & Cess as applicable)
2. Sec. 194B/194BB :- 30% Winnings
3. Sec. 194C :- Payment to contractors – 1% payee is Individual/HUF and 2% for other cases
4. 194D :- Insurance commission, 194G – Commission on sale lottery ticket, 194H other commission – 5%
5. 194D :- Sum received under Insurance Policy – 1% upto 31/August/2019. Thereafter 5%.
6. 194E :- Payment to non-resident sportsman/entertainer – 20%. (Surcharge & Cess as applicable)
7. 194I :- Rent on plant machines/equipments 2% and Rent on Land and Building, Furniture 10%.
8. 194IA :- Payment for transfer of immovable property 1%
9. 194IB :- Rent paid by individual/HUF not liable to Tax Audit 5%
10. 194J :- Professional Fees/Technical Fees – Payment to call centers 2% & Payment for other cases 10%
11. 194M :- Payment to contractors, commission, fees, for professional service by individual/HUF not liable to Tax Audit 5%
12. 194N :- Cash withdrawals 2%
FCA Vishal Poddar
Note : If the payee does not provide his PAN details, the payer would deduct TDS at higher of 20% or above specified rates.
TM
A Student of GST
 General Rules For TDS
[2] Procedural Compliances
[D] When TDS is required to be deposited in government Treasury ?
The due date in normal/regular is as under :-
1. For TDS deducted in April to February months – 7th of the next month.
2. For TDS deducted in march month – 30th April.

[E] Filing of TDS Returns

The payer shall submit quarterly TDS returns in Form 24Q (for salary), Form 26Q (for payees other than corporate non-
resident) & in Form 27Q (for non-residents). These returns shall be filed within due dates as under :-
1st Quarter April to June 31st July
2nd Quarter July to September 31st October
3rd Quarter October to December 31st January
4th Quarter January to March 31st May
(One month extended as payment is one month extended 30th April)

[F] The information of the payee relating to nature of payment, amount of payment & TDS deducted is updated in the
government records and is available for future reference & Assessment in 26A5.
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A Student of GSTTM
 General Rules For TDS
[2] Procedural Compliances
[G] Providing TDS Certificate to Payee
Payer shall furnish TDS certificate (for salary) in Form 16 and (for other payments) in Form 16A. Form 16 shall be issued
annually by 15th June of next year and Form 16A shall be issued quarterly within 15 days from due date of filing return.
New TDS Certificates have been issued in Form 16B (for payment u/s 194IA), Form 16C (for payment u/s 194IB).

[H] Non-deduction/Lower deduction of TDS

(a) Certificate for Non-deduction/Lower deduction –
In case of TDS u/s 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194I, 194J, 194LA and 194M – the payee can make an application
inform No.13 to the Assessing officer for lower/no deduction of TDS. If satisfied the Assessing officer shall issue certificate. The
payee shall furnish the certificate to the payer.

(b) Deduction for Non-Deduction/Lower Deduction of TDS

A resident individual of age 60 years or above (senior citizen) shall submit a declaration in for 15H for non-deduction of TDS u/s
192A, 193, 194, 194A, 194D, 194DA, 194EE, 194I.
Person other than company or firm shall furnish in Form 15G for non-deduction of TDS u/s 192A, 193, 194A, 194D, 194DA and 194I.
FCA Vishal Poddar
A Student of GSTTM
 General Rules For TDS
[2] Procedural Compliances
[I] Tax Deducted is Income Received (Sec. 198)
Exception :- In following two cases the TDS deducted shall not be treated as income :-
1. Tax paid by employer u/s 192(1A) on non-monetary perquisites provided by employer.
2. Tax deducted u/s 194N.

[J] TDS is adjustable from total tax payable (Sec.199).

Consequences of failure to deduct/deposit TDS (Sec.201)

1. The payer shall be deemed to be Assessee in default.
2. If the payee has considered the payment while computing his income & submits his return, the payer will not be treated as
Assessee in default.
3. Interest :- Interest for non-deduction of TDS is 1% for every month or part thereof from the date on which the tax was
deductible to the date on which it is actually deducted. Interest at the rate of 1.5% per month or part thereof if after
deduction it is not deposited from the date of deduction till the date of actual payment.

FCA Vishal Poddar

A Student of GSTTM
 TDS Chart
I. TAX DEDUCTION AT SOURCE
Nature of Threshold Limit for Payer Payee Rate of TDS Time of deduction
payment deduction of tax at source
Salary Basic exemption limit (Rs Any person Individual Average rate of At the time of
2,50,000/Rs 3,00,000, responsible for (Employee) income- tax payment
as the case may be). paying any computed on the basis
This is taken care of in income chargeable of the rates in force.
computation of the under the head
average rate of income- “Salaries
tax.
Premature Payment or aggregate Trustees of the EPF Individual 10% [In case of failure At the time of
withdrawal from payment ≥ Rs 50,000 Scheme or any (Employee) to furnish PAN, TDS@ payment
Employee authorised person Maximum Marginal
Provident Fund under the Scheme Rate]

Interest on > Rs 10,000 in a F.Y., in Any person Any resident 10% (7.5% At the time of credit of
Securities case of interest on 8% responsible for for the such income to the
Savings (Taxable) Bonds, paying any period from 14.5.2020 account of the payee
2003/7.75% Savings income by way of to or at the time of
(Taxable) Bonds, 2018. interest on 31.3.2021) payment
securities FCA Vishal Poddar
A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of deduction
payment deduction of tax at source
> Rs 5,000 in a F.Y., in case whichever is earlier.
of interest on debentures
issued by a Co. in which the
public are
substantially interested,
paid or credited
to a resident individual or
HUF by an A/c payee
cheque.
> No threshold specified in
any other case.
194 Dividend > Rs 5,000 in a F.Y., in case The Principal Resident 10% (7.5% Before making any
(including of dividend paid or credited Officer of a domestic sharehol for the payment by any mode in
dividends on to an individual shareholder company der period from respect of any dividend
preference by any mode other than 14.5.2020 to or before making any
shares) cash 31.3.2021) distribution or
> No threshold in other payment of dividend.
cases
194A Interest other > Rs 40,000 in a F.Y., in Any person (other Any 10% (7.5% At the time of credit of
than interest on case of interest credited or than an individual or HUF Resident for the such income to the
securities paid by – whose total sales, period from account of the
(i) a banking company; gross receipts or 14.5.2020 to FCAorVishal
payee at thePoddar
time of
turnover from 31.3.2021) Student of GSTTM
A payment,
 TDS Chart
Section Nature of payment Threshold Limit for deduction Payer Payee Rate of TDS Time of
of tax at source deduction
(ii)a co-operative society Business or profession do whichever is
engaged in not exceed Rs 1 crore in earlier.
banking business; and case of business or Rs 50
(iii) a post office on any deposit lakhs in case of profession
under a notified Scheme. during the immediately
In all the above cases, if payee is preceding F.Y.)
a resident senior citizen, tax responsible for paying
deduction limit is > interest other than
Rs 50,000. interest on securities.
> Rs 5,000 in a F.Y., in other
cases.

194B Winnings from any > Rs 10,000 The person Any 30% At the timeof
lottery, crossword responsible for paying Person payment
puzzle or card game or income by way of such
other game of any sort winnings

194BB Winnings from horse > Rs10,000 Book Maker or a person Any 30% At the timeof
race holding licence for horse Person payment
racing or for
arranging for
wagering or betting in FCA Vishal Poddar
any race course. A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source

194C Payments Single sum credited Central/State Govt., Local Any 1% (0.75%*) At the time
to or authority, Central/State/ Resident of sum paid or of credit of such
Contractors paid > Rs 30,000 Provincial Corpn., company, contractor credited, if the sum to the account
(or) firm, trust,registered for payee is an of the contractor or
The aggregate of society, co- operative society, carrying out Individual or at the time of
sums credited or university established under any HUF payment,
paid to a Central/State/ Provincial Act, work 2% (1.5%*) of whichever is
contractor during declared university, under the (including sum paid or earlier.
the UGC Act, Govt. of Foreign State supply of credited, if the
F.Y. > Rs 1,00,000 or a foreign enterprise, labour) payee is any
individual/HUF whose total other person.
Individual/HUF sales, gross receipts or turnover * The rates of
need not deduct from business or profession 0.75% and
tax where sum is exceeds Rs 1 crore in case of 1.5% are for
credited or paid business or Rs 50 lakhs in case of the period
exclusively for profession during the from 14.5.2020
personal purposes immediately preceding F.Y. to 31.3.2021

FCA Vishal Poddar

A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source

194D Insurance > Rs15,000 in a Any person Any Resident 5% (3.75% At the time of credit
Commission financial year responsible for paying for the of such income to the
any income by period from account of the payee
way of remuneration or 14.5.2020 to or at the time of
reward for 31.3.2021) payment,
soliciting or procuring whichever is earlier.
insurance business
194DA Any sum ≥ Rs 1,00,000 Any person Any resident 5% of the amount At the time
under a Life (aggregate amount of responsible for paying of income of payment
Insurance Policy payment to a payee in a any sum under a LIP, comprised
(if not exempt u/s financial year) including the sum (3.75% for the
10(10D) allocated by way of period from
bonus 14.5.2020 to
31.3.2021)
194E Payment to NIL for the payees if is not Any person Non-resident 20.8% At the time of credit
non-resident a citizen of India or non- responsible sportsman (including health of such income to the
sportsmen or resident sports for (including and account of the payee
sports association or institution making the payment athelete) education or at the time of
association or entertainer cess@4%) FCA Vishalpayment,
Poddar
TM
Entertainer A Student ofis
whichever GST
earlier.
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source
194EE Payment of ≥ Rs 2,500 in a Any person Individual or 10% (7.5% for At the timeof
deposit under financial Responsible for HUF payment to residents payment
National year Paying For the period from
Saving 14.5.2020 to
Scheme 31.3.2021)
194G Commission on > Rs 15,000 in a Any person responsible Any person 5% (3.75% for At the time of credit
sale of lottery financial year for Paying any income stocking, payment of such income to
tickets by way of commission, distributing, to residents the account of the
remuneration or Purchasing or for the payee or at the time
prize (by whatever selling lottery period from of payment,
name called) on tickets 14.5.2020 to whichever is earlier.
lottery tickets 31.3.2021)
194H Commission > Rs 15,000 in a Any person (other Any resident 5% (3.75% At the time of credit
or brokerage financial year than an Individual or for the of such income to
HUF whose total sales, period from the account of the
gross receipts or 14.5.2020 to payee or at the time
31.3.2021) of payment,
whichever is earlier.
FCA Vishal Poddar
A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source
194-I Rent > Rs Any person (other than an individual or Any For P & M or equipment- At the time of credit
2,40,000 in HUF whose total sales, gross receipts or resident 2% (1.5%*) of such income to the
a financial turnover from business or profession For land or building, land account of the payee
year carried on by him do not exceed Rs 1 crore appurtenant to a building, or at the time of
in case of business or Rs 50 lakhs in case furniture or fittings -10% payment, whichever
of profession during The immediately (7.5%*) is earlier.
preceding F.Y.) responsible for paying rent.
194-IB Paymen > Rs 50,000 Individual/ HUF (other than covered in sec Any 5% (3.75% At the time of credit
t for a month 194 I) responsible for paying rent. Resident for the of rent, for the last
of or part of a period from month of the
rent by month 14.5.2020 to previous year or the
certain 31.3.2021) last month of tenancy,
individu if the property is
als vacated during the
or year, as
HUF the case may be, to
the account of the
payee
FCA or atPoddar
Vishal the time
of payment,
A Student of GSTTM
whichever is earlier
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source
194-IA Payment On ≥ Rs 50 Any person, being a Resident 1% (0.75% At the time of credit
transfer Of certain lakh transferee (other than a person transferor for the of such sum to the
immovable (Consideratio Referred to in section 194LA) period from account of the transferor
property other than n for transfer) 14.5.2020 to or at the time of payment,
agricultural land 31.3.2021) whichever is earlier.
194LA Compensation > Rs 2,50,000 Any person responsible for Any 10% (7.5% At the time of
on acquisition in a financial paying any sum in the nature of Resident duringthe payment
of certain year compensation or enhanced period from
immovable compensation on compulsory 14.5.2020 to
property other Acquisition of immovable property 31.3.2021)
Than agricultural
land
194K Income on > Rs 5,000 in a Any person responsible for paying Any resident 10% (7.5% At the time of
units other financial any income in respect of units of a duringthe credit of such sum
than in the year mutual fund/Administrator of the period from to the account of
nature of specified undertaking/ specified 14.5.2020 to the payee or at the
capital gains company 31.3.2021) time of payment,
whichever is
earlier.
FCA Vishal Poddar
A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source
194-IC Payment under No threshold Any person responsible for Any Resident 10% (7.5% for At the time of credit
Specified specified. paying any sum by way of the period from of such income to the
agreement consideration, not being 14.5.2020 to Account of the payee
referred to in consideration in kind, under a 31.3.2021) or at the time of
section 45(5A) registered agreement, wherein L or B or payment, whichever is
both are handed over by the Owner for earlier.
development of Real estate project, for
a consideration, being a share in L or B
or both in such project, with payment
of part consideration in cash.
194K Income on > Rs 5,000 in Any person responsible for paying any Any resident 10% (7.5% At the time of
units other a financial income in respect of units of a mutual duringthe credit of such sum
than in the year fund/Administrator of the specified period from to the account of
nature of undertaking/ specified company 14.5.2020 to the payee or at the
capital gains 31.3.2021) time of payment,
whichever is
earlier.

FCA Vishal Poddar

A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for
payment deduction of tax at
source
194J Fees for  Rs 30,000 in a financial
professional or year, for each category
technical ervices/ of income. (However,
Royalty/ Non- this limit does not
compete fees/ apply in case of
Director’s payment made to
emuneration director of a company).
Further no TDS required
where fees for professional
services is credited or paid
exclusively for his personal
purposes.
Payer Payee Rate of TDS Time of
deduction
Any person, other Any Resident 2% (1.5%*) - At the time of
than an individual or Paye engaged only in credit of such
HUF; However, in the businessof peration sum to the
case of fees for of call centre account of the
professional or payee or at the
technical services 2% (1.5%*)- Incase of time of
paid or credited, fees for technical payment,
individual/HUF, services or royalty, whichever is
whose total sales, where such royalty is in earlier.
gross receipts or the nature of consider-
turnover from ation for sale,
business or distribution or exhibition
Profession exceeds of cinematographic films
Rs 1 crore in case of
business or Rs 50 10% (7.5%*) - Other
lakhs in case of payments
profession during
the immediately
preceding F.Y
FCA Vishal Poddar
A Student of GSTTM
 TDS Chart
Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of
payment deduction of tax at deduction
source
194M - Payments to > Rs 50,00,000 in Individual or HUF Any 5% (3.75% At the time of credit
Contractors a financial year other than those Resident duringthe of such sum to the
- Commission who are required to period from account of the payee
or brokerage deduct tax at 14.5.2020 to or at the time of
-Fees for source under 31.3.2021) payment, whichever
professional section 194C or is earlier.
services 194H or 194J
194N Cash withdrawals > Rs 1 crore - a banking Any @2% of such sum At the time of
company or any person In case the recipient has not filed payment of such sum
bank or banking ROI for all the 3 immediately
institution Preceding P.Y.s, for
- a co-operative Which time limit u/s 139(1) has
society expired,
engaged in - @2% of the sum, where cash
carrying on the withdrawal > Rs 20 lakhs but ≤ Rs
business 1 crore
of
banking or - @5% of sum, where cash
withdrawal exceeds Rs 1 crore
FCA Vishal Poddar
A Student of GSTTM
 TDS Chart

Section Nature of Threshold Limit for Payer Payee Rate of TDS Time of deduction
payment deduction of tax at source

194-O > Rs 5 lakhs, being E-commerce E-commerce 1% (0.75% At the time

(w.e.f. of
1.10.20 gross amount of sales operator,who participant for the credit of such sum
20) or service or both in a facilitates sale of period upto to the account of
financial year to an e- goods or 31.3.2021) the payee or at the
commerce participant, provision of of gross time of payment,
being individual services of an e- amount of whichever is
or
HUF and such e- commerce sale or earlier.
commerce participant participant service or
has furnished PAN or through digital or both [In case
Aadhar number to the electronic facility of failure to
e-commerce operator or platform furnish PAN,
> No threshold in Maximum
other cases TDS@5%]

FCA Vishal Poddar

A Student of GSTTM
ADVANCE TAX

FCA Vishal Poddar

A Student of GSTTM
20
 Provisions for Advance Tax
1] Applicability (Sec.207)
Every Assessee shall pay tax in advance during the financial year (PY) as per provisions of sec.208 to sec. 219.
Sec. 208 – As per this section advance tax shall arise in every case where the tax payable is Rs. 10,000 or more.
Tax Payable = Tax liability on actual income (-) TDS/TCS
Exception :- In case of senior citizen resident (60 & above) not having PGBP income is exempted from advance tax provisions
irrespective of the amount of tax payable.

2] Due dates & Amount of Advance Tax Payable

Quarter Due Date Advance Tax Payable
1 15th June 15% of tax payable
2 15th September 45% of tax payable
3 15th December 75% of tax payable
4 15th March 100% of tax payable

Exception :- In case of Assessees computing PGBP income on estimated basis u/s 44AD or 44ADA. Advance Tax has to be paid
only on 15th March 100% of tax payable.
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A Student of GSTTM
 Provisions for Advance Tax
3] Interest for Non-Payment/Short Payment of Advance Tax
(A) Interest on non/short payment of advance tax on each quarterly due date (Sec. 234C)
In case of non/short payment of advance tax on 1st three due dates the interest shall be calculated on the shortfall @ 3%.
However interest for shortfall of last quarter shall be 1%. In case Assessee has any of the following income :
1. Capital gains
2. Winnings
3. PGBP of newly started
4. Dividend
While computing the shortfall of each installment for calculating interest, the tax shall be considered in that quarter in which
they arise.

(B) Interest u/s 234B

Interest under this section is applicable if the advance tax paid (upto 31st March of PY) is less than 90% of tax payable.
Interest is calculated @ 1% p.m. or part from 1st April upto the date of payment of tax.
Interest shall be calculated on tax payable (-) Advance tax paid upto 31st March.

4] Credit for Advance Tax (Sec. 219) FCA Vishal Poddar

A Student of GSTTM