Ans: TDS stands for “Tax Deducted at Source”. For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called as “Tax Deducted at Source”, commonly known as TDS. Under this system tax is deducted at the origin of the income. Tax is deducted by the payer and is remitted to the Government by the payer on behalf of the payee. The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract/ Freelance payments, etc. In respect of payments to which the TDS provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him to the credit of the Government. Q.2: What is the difference between PAN and TAN? Ans: PAN stands for “Permanent Account Number” & TAN stands for “Tax Deduction Account Number”. TAN is to be obtained by the person responsible to deduct tax, i.e., the deductor. In all the documents relating to TDS and all the correspondence with the Income-tax Department relating to TDS one has to quote his TAN. PAN cannot be used for TAN, hence, the deductor has to obtain TAN, even if he holds PAN. Q.3: Is there any minimum amount upto which tax is not deducted? Ans: The Income-tax Act has prescribed a different threshold limit for deduction of tax at source under various sections. If the expenditure incurred/payment made during the year is below the threshold limit, then there is no requirement to deduct tax at source. Q.4: The threshold limit for deduction of tax at source under various sections is as follows: Ans: CATEGORY A – WHEN RECIPIENT IS RESIDENT Nature of payment TDS Sec. 194J – Fees for professional or technical 10 services. 1. sum paid or payable towards fees for technical 2 services ii. sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of 2 cinematographic films; iii. Any other sum 10
Q.5: What is Financial Year Start and End Date?
Ans: It starts from April to March. Q.6: I have received less salary Ans: Case 1. For Ex.: ABC Company paid Rs. 35,000 in April for professional services to Mr. X. then ABC company is liable to deduct the TDS in Apr month itself @ 10%, i.e., Rs. 3500. Reference: Total amount exceeds the threshold limit of Rs 30,000 (With Reference to Section 194J of Indian Income tax act) Case 2. For Ex.: ABC Company paid Rs. 10,000 in April and Rs. 10,000 in May and Rs. 15,000 in Jun month for professional services to Mr. X. Now it is more than Rs. 30,000 from April - June, then ABC company is liable to deduct the TDS cumulatively in Jun month @ 10%, i.e., Rs. 3500. Reference: Total amount exceeds the threshold limit of Rs 30,000 (With Reference to Section 194J of Indian Income tax act) and hence when the limit crossed the TDS has been deducted cumulatively.
Q.7: If TDS deduction is made cumulatively in any month in the current fiscal year, then the cumulative TDS deduction would be applicable for coming months also? Ans: No, there will be no cumulative TDS deduction for the coming months. For Ex, ABC Company paid Rs. 10,000 in April and Rs. 10,000 in May for professional services to Mr. X. Here, ABC Company is not liable to deduct TDS from payments made to Mr.X because their sum is less than the professional charges threshold limit, i.e., Rs. 30,000. If Mr. X's payment amount was Rs. 15000 in June, and now it is more than Rs. 30,000 from April - June, then ABC company is liable to deduct the TDS cumulatively in Jun month @ 10%, i.e., Rs. 3500. Reference: Total amount exceeds the threshold limit of Rs 30,000 (With Reference to Section 194J of Indian Income tax act) and hence when the limit crossed the TDS has been deducted cumulatively. Then in July, if the payment amount is Rs. 10,000, there is no cumulative TDS deduction. TDS will be deducted only on the July payment, i.e., Rs. 1000. Q.8: If any TDS deduction was made in March of the previous fiscal year cumulatively, but the payment amount was less than Rs.30,000 in April of the current fiscal year? Ans: No, there will be no TDS deduction if the payment is less than Rs. 30,000 in April of the new fiscal year, but tax must be deducted if the payment for professional and technical services exceeds Rs 30,000 during the year. For Ex, ABC Company paid Rs. 10,000 in April and Rs. 10,000 in December for professional services to Mr. X. Here, ABC Company is not liable to deduct TDS from payments made to Mr.X because their sum is less than the professional charges threshold limit, i.e., Rs. 30,000. If Mr. X's payment amount was Rs. 15000 in Mar, and now it is more than Rs. 30,000 from April-Mar, then ABC company is liable to deduct the TDS cumulatively in Mar month @ 10%, i.e., Rs. 3500. Reference: Total amount exceeds the threshold limit of Rs 30,000 (With Reference to Section 194J of Indian Income tax act) and hence when the limit crossed the TDS has been deducted cumulatively. Then in Apr, if the payment amount is Rs. 10,000, there is no any/cumulative TDS deduction. Q.9: Can the payee request the payer not to deduct tax at source and to pay the amount without deduction of tax at source? Ans: A payee can approach to the payer for non-deduction of tax at source but for that they have to furnish a declaration in Form No. 15G/15H(It’s applicable only for fixed deposit holders not for professional services.)as the case may be, to the payer to the effect that the tax on his estimated total income of the previous year after including the income on which tax is to be deducted will be nil. Q.10: How can I know the quantum of tax deducted from my income by the payer? Ans: To know the quantum of the tax deducted by the payer, you can ask the payer to furnish you a TDS certificate in respect of tax deducted by him. You can also check Form 26AS from your e-filing account at https://www.incometax.gov.in/iec/foportal You can also use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in Q.11: What are the due dates for filing quarterly TDS Returns? Ans: The due dates for filing quarterly TDS returns, both electronic and paper are as under:
Due Quarter Date April to June (Q1) Jul-31 July to September (Q2) Oct-31 October to December Jan-31 (Q3) January to March (Q4) May-31
Q.12: At what rate the payer will deduct tax if I do not furnish my Permanent Account Number to him? Ans: As per section 206AA, if you do not furnish your Permanent Account Number to the payer (i.e., deductor), then the deductor shall deduct tax at the higher of the following rates : At the rate specified in the relevant provision of the Act. At the rate or rates in force, i.e., the rate prescribed in the Finance Act. At the rate of 20%.
Q.13: I have not received TDS certificate from the deductor. Can I claim TDS in my return of income? Ans: Yes, the tax credit in your case will be reflected in your Form 26AS and, hence, you can check Form 26AS and claim the credit of the tax accordingly. However, the claim of TDS to be made in your return of income should be strictly as per the TDS credit being reflected in Form 26AS. If there is any discrepancy in the tax actually deducted and the tax credit being reflected in Form 26AS then you should intimate the same to the deductor and should reconcile the difference. The credit granted by the Income-tax Department will be as per Form 26AS. Q.14: What are the due dates for sharing quarterly TDS Returns/ Form 16A/ TDS Certificate? Ans: The due dates for sharing quarterly TDS returns are subject to there being no extension in the TDS return due date. Both electronic and paper versions are as under:
Due Quarter Date April to June (Q1) Aug-31 July to September (Q2) Oct-31 October to December (Q3) Feb-28 January to March (Q4) Jun-30
