TDS (Tax Deducted at Source) is a key compliance requirement. Learn when to deduct TDS, rates applicable, and how to file TDS returns on time.
When is TDS Applicable
TDS applies when you make payments exceeding specified thresholds. Professional fees over Rs. 30,000 require 10% TDS. Contract payments over Rs. 30,000 require 2% TDS. Rent over Rs. 1.8 lakhs yearly requires 10% TDS.
Salary payments require TDS based on income tax slabs. Interest from banks or post office above Rs. 10,000 requires 10% TDS. Commission or brokerage over Rs. 15,000 requires 5% TDS.
TDS Rates
Section 194J covers professional fees at 10%. Section 194C covers contractor payments at 2%. Section 194 requires TDS on salary at applicable income tax rates. Section 194A covers interest at 10%.
If PAN not provided by deductee, TDS rate doubles. This is a common oversight causing unnecessary tax burden for vendors. Always collect and verify PAN details early.
TDS Return Filing
File TDS returns quarterly using Form 24Q for salary, Form 26Q for other payments, and Form 27Q for foreign payments. Due dates are 31st July, 31st October, 31st January, and 31st May for respective quarters.
Issue TDS certificates (Form 16, 16A) to deductees within 15 days of due date. File TDS returns even if no TDS deducted during the quarter. Late filing attracts Rs. 200 per day penalty up to the TDS amount.
TDS Certificate Format
Form 16 is for salary TDS with annual details. Form 16A is for other payments with quarterly details. Download from Traces portal after TDS return processing. Deductees need these certificates for claiming credit.
