Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act, 1961. Any payment covered under these provisions shall be paid after deducting at prescribed percentage. The liability to deduct TDS on payments is only for the assessee’s who is covered under tax audit.
Objectives of Tax Deducted at Source:
1. To enable the salaried people to pay the tax as they earn every month. This helps the salaried persons in paying the tax in easy installments and avoids the burden of a lump sum payment.
2. To collect the tax at the time of payment of income to various assesses such as contractors, professionals etc.
3. Government requires funds throughout the year. Hence, advance tax and tax deducted at source help the government to get funds throughout the year and run the government smoothly.
Payments which are covered under TDS: (TDS Rate Chart) Click here
TDS Payment Due Dates for the FY 2018-19:
The TDS deducted by the deductor shall be remitted to the government in the following due dates.
Non Remittance of TDS in respective due dates:
If the TDS is not deducted, interest at the rate of 1% per month shall be levied from the date on which tax deductible to the date on which tax is actually deducted.
If the TDS is deducted but not remitted within due date of payment, interest at the rate of 1.5% month shall be levied from the date of deduction to the date of remittance.
Filing of quarterly return for the FY 2018-19:
Apart from monthly remittance of TDS deducted the assessee is also liable to file quarterly return which contains the details and pan of the person for whom TDS is being deducted. The quarterly return shall be filed in the following due dates.
Late filing of Quarterly Return:
As per Section 234E of Income Tax Act 1961, If an deductor fails to file return of TDS within time limits specified as above, he shall be liable to pay a fine of Rs.200 per day during which the failures continues, subject to maximum of amount of tax deductible.
For example, say your TDS payable amount for the last quarter during the FY 2018-19 is Rs.5000/-, the deductor has filed TDS return on 17th November, 2019 for which Due date is on 31st May, 2019. (i.e. delay of 170 days). Then the calculation comes out to Rs 200 x 170 days = Rs.34,000/-, but since this is greater than Rs 5000 (Tax deductible), you will have to pay only Rs 5000 as the late filing fee.
Tax Credit and Form 26 AS:
Deductee can be taken as tax credit of “Tax deducted by the deductor” while paying his Income tax. The tax credit shall be reflected in his form 26 AS.
Form 26AS can be downloaded from TRACES website. To download Form 26AS, log in to your income tax filing account on the Income Tax department's e-filing website https://incometaxindiaefiling.gov.in, either directly or through the Net banking facility of Authorized banks.
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