What is TDS rules and regulations?
Introduction The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.
What is Section 92B of TDS?
Section 92B of the Income Tax Act, 1961 This section defines international transaction(s) for the purpose of this Section and the Section(s) 92, 92C, 92D and 92E as a transaction between two or more associated enterprises, wherein either one or both the enterprises are non-residents.
What is TDS rule?
TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at the source if the payment exceeds certain threshold limits. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government.
What is the rule of TDS deduction?
TDS is deducted only if your total income is taxable. However, TDS will not be deducted in case your total income is Rs. 2,50,000 and this amount is applicable for men and women below the age of 60 years. Note: TDS deduction rate on salary ranges from 5% to 30% which is equivalent to the applicable income tax slabs.
What is the threshold limit for TDS?
For the assessment year, 2020-2021 the exemption limit for an individual is Rs 2,50,000. Section 194B – TDS on winning from lottery, crossword or any game: A TDS of 30% is deducted from any amount received by the way of lottery, crosswords or any other game if the amount exceeds Rs. 10,000.
How many types of TDS is there?
TDS Certificates are of two types: Form 16 and Form 16A. Under Section 203 of the Income Tax Act, 1961, a certificate must be provided to the deductee showing the amount that has been subtracted as tax. The deductor is liable to provide this form to the deductee.
What is Section 92D?
Section 92D of the Income Tax Act mandates that a person who is involved in an international transaction or specified domestic transaction should regularly maintain the documents prescribed under rule 10D. The documents must be held for a period of 8 years from the relevant assessment year.
What is the new rule for TDS?
Under the new section 194Q inserted through Finance Act, 2021, a buyer will have to deduct TDS at 0.1 per cent of amount exceeding Rs 50 lakh at the time of credit of such sum to the account of the seller or at the time of payment, whichever is earlier.
Who is eligible to deduct TDS?
Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.
Who are all eligible for TDS?
When should TDS be deducted and by whom? Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.
Which is the regulator of TDs in India?
Income Tax Act, 1961 regulates TDS in India through Central Board of Direct taxes (CBDT) under the Indian Revenue Services (IRS). TDS rule directs the payee or employer to deduct a certain amount of tax before making full payment to the receiver. TDS is applicable for salary, commission, professional fees, interest, rent, etc.
When do you need to deduct TDs in India?
TDS can be applicable for income that are regular as well as irregular in nature. Income Tax Act, 1961 regulates TDS in India through Central Board of Direct taxes (CBDT) under the Indian Revenue Services (IRS). TDS rule directs the payee or employer to deduct a certain amount of tax before making full payment to the receiver.
What does TDs stand for in income tax?
In simple words, TDS is retaining a part of income (which you receive) as tax and depositing it with the Income Tax Department on your behalf. So, it’s like pay as and when you earn. TDS can also be commonly said as Withholding Tax. Further, it is to be noted that deduction of TDS doesn’t exempt you from the requirement of filing of ITR.
How is TDs calculated in case of situation 2?
In Situation 2 (when TDS is deducted), your employer will deduct the TDS as Rs.3800/12 months, which comes to Rs.2817 (round-off) per month. This is how TDS is calculated on salary.