TDS is known as Tax deducted at the Source. This is a type of income tax that is usually deducted or taken off when you’re paying the money or making specified payments such as commission, professional fees, rent, salary, interest etc. The TDS payment is usually made by the person that is paying specified payments. The person who is receiving the income is liable to make the Tax deducted payment.
Although, when you are getting your money, the government with the help of certain provisions of tax deducted at the source, makes sure that the income tax is deducted from the payments that you make, in advance.
To Understand TDS Payment, Here’s An Example
A recipient of the income gets the net amount, that I after the TDS payment has been made. Now the gross amount which has been deducted is added to the income, therefore adjusting the final tax liability. If someone has to make a payment for rent or such, TDS is decided while making the payment, the one who received such a payment, which TDS payment deducted, the deducted amount is added hence being credited to his final tax liability.
When Should TDS Payment Be Made And By Whom
When people make specified payments as mentioned under the Income Tax act, the TDS payment is to be made or the TDS is deducted. While, there is no TDS that is deducted when the payment is being made individually or HUF. When the books are not to be audited, TDS may not be deducted. However there is an exception to this when the payment under individual or the HUF is exceeding 50,000 per month, then you are required to deduct TDS, which is 5%. This is applicable even if the Individual or the HUF does not need the tax auditor is not liable for it. The deduction of the TDS is depended on specified rates.
Also, Read – E-Filing Income Tax Returns Online – Guide on E-filing ITR 2019
For example, the employer may deduct the TDS depending on the income tax slab rates, the banks deduct 10% of the TDS, sometime the banks might deduct 20% depending on if they have the information of your PAN Card. Exceptions, where the TDS is not deducted, are, when your total taxable income is below the taxable income after submitting the investment proofs and documents, the TDS is not deducted on your income. You don’t need to pay any tax. Similarly, there are ways wherein your submit forms to your bank, saying it is below the taxable limit and then you don’t need to pay any tax. The forms that you need to submit are 15G and 15H.
More About Due Dates For Submitting Or Depositing The TDS To The Government
The TDS payment or the tax deducted at the source is usually deposited by the 7th of the subsequent month. When you purchase a property or when you’re paying any rent, keeping in mind the TDS payment is very important. The TDS needs to be paid in 30 days from the end of the month. Therefore do the calculation and pay your TDS to the government. More examples to this are that, TDS that is decided in the month of June needs to be paid to the government by the 7th of the following month that is July.
You can easily deposit the TDS, when you have to make the Tax deducted payment to the government, using a challan ITNS-28 On the government portal. You can also find various ways to deposit a TDS ok the internet, do your research and then go ahead to make your TDS payment. TDS or the tax deducted at the source is an important tax that shouldn’t be missed or taken for granted.
