What is TDS? Full form and rule | TDS Rule (Rates in PDF)

Typically TDS is seen by adding salaries. Because people who get decent salaries, they have a TDS deduction. But do you know that TDS  cut without salaries? And do you know the deduction of TDS reduced too? And more, if you want you to get the cut back TDS.

What is TDS and What are the rules of TDS? On what basis it cuts and how can TDS deduct the deduction or can get back all these things we will tell in this post today.

 

What is TDS: Meaning And Full Form

 

TDS’ full form is ‘Tax Deducted at Source’. Which means ‘Tax deduction at source’ Here the source ‘sources’ means-source of earnings. The sources of income under the Income Tax Act are considered as 5 types-

1. Income as salary | Paycheck
2. Income from business/profession | Income from your business or profession
3. Income from house property | Income from rent to a property as a ‘
4. Income as capital gains | If any property is sold as its profit,
5. Income From other sources | Income form of interest, commission, dividend etc.

What is TDS? Full form and rule | TDS Rule (Rates in PDF)

 

The TDS system is that these salaried / payment-giving institutions/individuals will deduct your tax payment is made to you. You pay the remaining amount form of a salary or payment.

 

tax deduction was done only on the source of your earnings has been named Tax Deducted at Source in Taxation Language, which means ‘Tax deduction at source’. this is one of the many ways of tax payment. Apart from this, Advance Tax and self-assessment tax payment methods.

 

 

Example of TDS Deduction

 

Now we understand TDS deduction by a small example in which there is a rule of 10% reduction.

Suresh is a businessman and Rajesh is a lawyer. Suresh took Rajesh’s services in connection with any work for his firm. Now, on behalf of Suresh, Rajesh has to pay 40,000 rupees. Rajesh will have to do it by cutting 10 per cent of the 40,000 rupees ie 4000 rupees already before payment and the remaining Rs 36,000 will be given to Rajesh. The 4,000 which they had bitten would be the same TDS. Suresh will deposit 4000 rupees in the account of the Income Tax Department in the name of Rajesh.

 

 

Advantages of TDS

 

TDS actually works on the principle of ‘pay as and when you earn’ i.e. ‘earn and pay go’. Government and taxpayers both live in comfort with this system.

Sharing of responsibility for a tax deduction. Responsibility sharing
Giving the responsibility of cutting and depositing the tax to the employer reduces the burden on the government. Income Tax Department is able to collect tax from many people through the same employer. That too little extra effort.

 

 

No tax scam: Prevents tax evasion

 

Tax deduction before getting paid or before getting paid, the taxpayer does not have the scope to tax in his earnings, which means tax evasion.  addition  TDS, people who are tax administration are often successful in doing this.

 

 

Increase in the scope of the tax. Widens the tax collection base

A large number of earning people economy come under the purview of tax. From Salaried to other professions, the government earns revenue from all those who make taxable income.

 

 

A sure source of income

 

The government gets a surefire amount till due date in the first week of every month). This allows him to continue his expenses and arrangements. Whereas the money coming through advance tax and self-assessment tax is not so regular.

 

 

Easy to taxpayer Easier for a deductee

 

who have a TDS, do not have to go through the hassle of depositing income tax every three months as Advance Tax. An employer is responsible for all the formalities. Just have to look at return filing, that too once a year.

 

Difference between Advance Tax and TDS

 

TDS and Advance Tax, there are two different ways to pay tax in government accounts. But there is a difference between the submission and returns of both the system. Let’s understand this difference …

 

  • Earning Advanced Tax himself deposits tax with the government contrary TDS is deposited employer or firm the taxpayer does not have to worry.
  • Advance Tax has deposited once every three months,  TDS is Monthly, Quarterly, or Annually deposited in different cases. If the paying provider is a company or institution, then he has to deduct TDS every month. If there is a person paying, he has to deposit once every three months.
  • You have to submit a return of the tax yourself which is deposited once a year. The taxpayer who has a TDS has to enter his return four times a year. After every quarter, till the last date of the next month.

 

 

Where does TDS cut? When is TDS Applicable?

 

Salaries: If you are a Salaried employee of a company or institute and your year’s salary taxation income (currently 2.5 lakh rupees annually), your Employer bites.
Interest Payments: If you are getting a large amount (currently over 40,000 rupees) on your deposits, the bank bites the TDS.
Commission payments: To get any work done from an institution or firm or to get a bigger commission in connection with any deal (property and so on).

Rent payments: If you are getting rent of more than Rs. 20,000 per month in house rent, then the tenant is required to deduct TDS.
Consultation fees: You are getting consultation fees from any firm as a lawyer, chartered accountant, financial planner etc.
Professional fees: If you have hired a firm based on your professional expertise.

 

 

TDS Rules

 

Some rules have been framed by the Income Tax Department for cutting and depositing TDS. Those who can not do the proper execution may have to pay a fine, interest or Late Fee.

 

 

Regarding TDS deduction

 

TDS deducted from the date of payment or actual payment, whichever is earlier. If there is a delay, interest charged at a rate of 1% per month.

 

Regarding TDS deposit.

 

It is compulsory for the TDS borrower to deposit the collected amount to the Government by the 7th of the following month. If you do not do this, you will have to pay interest of 1.5% / month separately on the full amount.

 

What is form 16 to Learn more

 

Regarding TDS Returns Filing

 

Every month the TDS is deducted, it is mandatory to return the return of every quarter to the last date of the next month. That is 31 July, 31 October, 31 January, and 31 May of the financial year. If you fail to do so, you will have to pay a fee of 200 rupees per day (according to Section 234E). Although the amount of Late fee cannot exceed the total tax.

 

TDS Certificate

 

The TDS Cutter from your earnings gives you certificate regard,  the responsibility of the law that the number of TDS that has been deducted by the employee and the amount of TDS deposited to the government will give you a certificate. With the help of this certificate, you can claim Paid Tax at the time of filing returns or on departmental investigations.

The deductor primarily issues two types of TDS certificates.

 

 

 

what is Form 16Read more

 

 Fill Form 16

 

If you find Salary, then your company, which deducts issues a TDS certificate in Form 16. In this, he gives full detail of the salary given to you and tax deducted from him ie TDS.

 

 

Fill Form 16A

Apart from Salary, if TDS is deducted on any other income, then TDS Certificate is available as Form 16A. Such as interest from the bank, professional fees, from any firm., the TDS borrower instructs you Form 16A. In which you have the full payment of the payment made on his behalf and tax deduction.

 

what is Form 16 ..Read more

 

TDS Rates

TDS  RATE CHART Financial Year: 2018-19 / Assessment Year: 2019-20 PDF File –Download

 

 

The rate of TDS varies according to the earnings. As the employer bites of his employees according to their tax slab. At the same time, TDS bites at a flat rate of 10% on the bank interest. Similarly, on the benefit of the debt mutual fund, the resident of India does not have to deduct TDS, while non-resident Indian has to deduct. At present, how much TDS Rate is applicable to the earnings, can see in the table below.

 

What is TDS
Credit Income Tax Website

 

TDS  RATE CHART Financial Year: 2018-19 / Assessment Year: 2019-20 PDF File –Download

 

How To Save TDS?

 

In Case Of Salary

 

If you believe that your Total Taxable Income is less  Basic Exemption limit during the financial year,  can ask your Employer to not deduct TDS. But in favour of, you have to present the appropriate documents. As you give evidence of some tax-exempt investments, due to which the total taxable income is less than the basic taxable income, you will not have to pay any tax.

 

That is, TDS will not be deducted. Keep in mind the following two facts for relaxation.

 

  •  All the allowances you receive with Salary and some allowances are partly exempt from tax. Such as house rent allowance (HRA) LTA, medical allowance etc. To know about these options for tax exemption, read: 45 ways to save tax
  • Under section 80C, 80CCC, 80CCD, 80CCG, 80D, 80DD, 80DDB, 80E, 80EE etc. of Income Tax Act, you also get tax rebates on many types of investments. On the basis of these, they claimed to reduce the tax. Read for detailed information: 80C tax rebate.

 

In the case of other payments. In case of other Payments

 

get any payment other than salaries, which deducted on TDS, you get tax exemption on it. Firstly, make your PAN available to him.  is no PAN, cut TDS at double rate.  total income is less than the taxable limit then you can apply for tax exemption by submitting Form 15G or Form 15H.

 

  • 15G / 15H: Both form 15G and Form 15H are required deposited with the payment provider for not cutting the TDS. Form 15G is for the general public, Form 15H is for senior citizens only.
  • These forms deposited with TDS-cutting bank, post office or company etc. of interest on bank savings, interest on National Savings Certificate (NSS), Dividend, PF withdrawal one etc.

 

 

How to Get TDS Refund

 

 

your total income is a less taxable limit and for some reason, your employer has not been proved your tax exemption or your employer or bank has deducted TDS, you have to claim Income Tax Return for a refund.  When you give information about your total income, investment and tax payments in the Income Tax Return, an extra paid tax refunded to your account. You will see refund only when filing an income tax return. A tax refund is available within three months of the filing of the return.

 

 

PAN and TAN needed

 

You have your own PAN number to deposit the TAX. On this pan, your tax account is created and the amount deposited is recorded in front of this. Similarly, government TAN number to cut TDS. Anyone deposits TDS to a government, he gets lodged his TAN number.  same time, it goes through Form 26  the person’s PAN number,  income has been deducted from TDS.

 

View records in Form 26as

 

You can view Form 26AS to see or check how much TDS has been cut off on your behalf. In this, the records of all types of tax given on your behalf are recorded. Form26AS is a type of statement a series mention of tax deducted and a deposited amount is given in front of your name or PAN.

You can get help from the E-Filling Website of the Income Tax Department to see if your TDS is cut and whether your name has accumulated. How can you check it on the website, let’s know …

 

 

1: Go to web address incometaxindiaefiling.gov.in and click on “Register Yourself” option.
2: Please fill the requested status on the basis of the details of your PAN and generate the password.
3: Now you have your user id. The user ID is your PAN number. And you can log in to your account with the help of password. You will get the option of “View Tax Credit Statement (26 AS)” on your account page as you log in. Click on it.
4: After clicking on “View Tax Credit Statement (26 AS)”  take you another website called TRACES (Full Form: TDS  Reconciliation Analysis and Correction Enabling System). You will see all your tax-related details here. Like how much has been deducted, or advance tax has been collected, how much has been deposited, etc.

 

I hope you would have liked this post. You can comment to ask related questions. Please share this post on social media.

 

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