Tax Deducted at Source (TDS) is a sytem under which tax is directly collected at the point of generation of income. Under the income tax laws in India, TDS is deducted by the payer, and remitted by him to the government, on behalf of the payee.
See also: All about Section 80C
What is TDS?
The legal framework requires that the person on whom the responsibility has been cast is to deduct tax at the appropriate rates, from payments of specific nature which are being made to a specified recipient. The deducted sum is required to be deposited to the credit of the Central government. The recipient from whose income tax has been deducted at source gets the credit of the amount deducted in his personal assessment on the basis of the certificate issued by the deductor.
For example, an employer paying salary to the employee is liable to deduct TDS and pay it to the government on behalf of the employee. Similarly, a home buyer is liable to deduct and pay TDS to the government on behalf of the seller. Under I-T laws, TDS is deducted by the payer on payment of salary, interest, rent, commission, brokerage, etc.
See also: TDS on rent
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How is TDS paid online?
Step 1: Visit NSDL’s official website (https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp). On this page, select ‘CHALLAN NO./ITNS 281’ option under TDS/TCS Section.
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Step 2: You will be directed to an e-payment page, where you will have to fill details about the payment.
all about: Section 194D.
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In ‘Tax Applicable’ field, select ‘Company Deductees’ if you are deducting TDS for a company. If not so, select ‘Non-Company Deductees’.
Among the details, you will select the required tax applicable, types of payment, nature of payment and assessment/financial year as displayed on the screen.
The taxpayer is also required to enter the address details, such as city, pin code, state, etc.
Step 3: Once all the details are correctly filled, input the captcha code and click on the ‘Proceed’ button.
Step 4: On the new page, you will have two payment options – net-banking or debit card of select banks. After entering the mode of payment and the bank, you will be prompted to enter the text (captcha) as displayed on screen.
Step 5: On the confirmation screen, non-financial/financial details entered by the taxpayer on first screen with the name of the taxpayer, according to the database of the I-T Department, will be displayed. Make sure the details displayed are correct and then, proceed to make the TDS payment.
Step 6: Upon confirmation, the taxpayer will be redirected to the bank’s payment gateway, i.e., debit card/net-banking web page. You will have to login to the net-banking site with the user ID and password provided by the bank for net-banking. If you selected the debit card option, enter the card details, as required.
Step 7: Upon successful payment, a challan counterfoil will be displayed, containing a Challan Identification Number or CIN, payment details and the bank name through which e-payment has been made. This document is the proof of TDS payment.
See also: Everything you wanted to know about income tax return or ITR
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TDS rate chart: Rate of TDS for various paymentsÂ
| Nature of payment | TDS |
| Section ​192 – Payment of salary | Normal or Special Tax Rate plus surcharge and education cess
surcharge: 10% (if total income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 crore), 15% (if total income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore), 25% (if total income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore), 37% (if total income exceeds Rs. 5 crore) HEC: 4% |
| Section ​192A – Payment of taxable accumulated balance of provident fund | 10% |
| Section 193 – Interest on securities | Â |
| a. interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company [not being listed securities in demat form], (c) any security of the Central or State Government [i.e., 8% Savings (taxable) Bonds, 2003 or 7.75% savings (Taxable) Bonds, 2018, but not any other government security] | 10% |
| b. any other interest on securities (including interest on non-listed debentures) | 10% |
| Section 194 – Dividend | 10% |
| Section 194A – Interest other than interest on securities | 10% |
| Section 194B – Winnings from lottery or crossword puzzles or card games of any sort | 30% |
| Section 194BB – Winnings from the horse races | 30% |
| Section 194C – Payment or credit to a resident contractor/sub-contractor — |  |
| a. payment/credit to an individual or a Hindu Undivided Family | 1% |
| b. payment/credit to any person other than an individual or a Hindu Undivided Family | 2% |
| Section 194D – Insurance commission | 10% |
| – if recipient is a resident (other than a company) | 5% |
| – if recipient is a domestic company | 10​% |
| Section 194DA – Payment in respect of life insurance policy | 1% |
| Section 194EE – Payment in respect of deposits under National Savings Scheme, 1987 | 10% |
| Section 194F – Payment on account of repurchase of units of MF or UTI | 20% |
| Section 194G – Commission on sale of lottery tickets | 5% |
| Section 194H – Commission or brokerage | 5% |
| Section 194-I – Rent — |  |
| a. rent of plant and machinery | 2% |
| b. rent of land or building or furniture or fitting | 10% |
| Section 194IA​ – Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land) | 1% |
| Section 194-IB​ – Payment of rent by an individual or HUF not subjected to tax audit under Section 44AB | 5% |
| Section 194-IC​ – Payment under Joint Development Agreement to a resident individual or HUF who transfers land or building as per such agreement | 10% |
| Section 194J – Fees for professional or technical services.
Note: It is 2% if payee is engaged in business of call center operations |
10% |
| 1. sum paid or payable towards fees for technical services | 2% |
| ii. sum paid or payable towards royalty in nature of consideration for sale, distribution, or exhibition of cinematographic films; | 2% |
| iii. Any other sum | 10% |
| Note: 2%, if payee is engaged in the business of call center operations | |
| Section 194LA – Payment of compensation on acquisition of certain immovable property | 10% |
| Section 194LBA (1) – Payment of the nature referred to in Section 10(23FC) or Section 10(23FC)(a) or section 10(23FCA) by business trust to resident unit holders | 10% |
| Section 194LBB – Payment in respect of units of investment fund specified in Section 115UB | 10% |
| Section 194LBC(1) – Payment in respect of an investment in a securitization trust specified in clause (d) of the explanation occurring after section 115TCA (with effect from June 1, 2016) | – |
| Section 194M – Payment of contractual work, commission (not being insurance commission referred to in section 194D), brokerage or professional fees, by an individual or a HUF not covered under section 194C, section 194H and 194J | 5% |
| Section 194N – Payment in cash by banking company or co-op bank or post office | 2/5% |
| Section 194K – Income in respect of units payable to residents | 10% |
| Section 194P – Deduction of tax by specified bank in case of senior citizen having age of 75 or more | Tax on total income as per rate in force |
| Section 194Q – Payment to residents for purchase of goods of the aggregate value exceeding Rs 50 lakhs. | 0.1% exceeding INR 50 lakh |
Source: Income Tax Department
all about: 194q of income tax act
FAQs
Is TAN must to make TDS payments online?
Under Section 203A of the Income Tax Act, TAN is must for TDS payments.
What is the due date for payment of TDS?
The payer has to deposit TDS within the seventh of the following month of deducting it. In case of TDS deducted on rent and purchase of property, it must be paid within 30 days from the end of the month in which TDS was deducted. For TDS deducted in March, the due date is 30th April.
What are the basic duties of a person deducting TDS?
The basic duties of a person who is liable to deduct tax at source are given below: Get Tax Deduction Account Number and quote the same in all documents pertaining to TDS. Deduct TDS at the applicable rate. Pay TDS as a credit to the government by the due date. File the periodic TDS statements, that is, TDS return by the due date. Issue the TDS certificate to the payee.
If a payer does not deduct tax at source, will a payee face any adverse consequences?
It is the duty and responsibility of a payer to deduct tax at source. If the payer fails to do so, the payee will not have to face any consequences. However, this will not relieve the payee from payment of income tax and the payee will have to discharge his tax liability.
What if I don’t have netbanking authorised for the TDS payment?
If your bank is not an authorised bank or does not have an online payment facility, you can make electronic TDS payment from the account of any person having an account with the authorised bank. However, the challan for making such payments must clearly indicate your Permanent Account Number (PAN).
