What is TDS?

As per the Income Tax Act, 1961, any company or person making a payment is required to deduct tax at source if the payment exceeds prescribed threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

The company or person that makes the payment after deducting TDS is called a deductor and the company or person receiving the payment is called the deductee. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government.

TDS is deducted irrespective of the mode of payment and is linked to the PAN of the deductor.

However, individuals are not required to deduct TDS when they make contractual payment or pay fees to professionals like lawyers and doctors in case where payments are made for personal purpose.

TDS is one kind of advance tax. It is tax that is to be deposited with the government periodically and the onus of the doing the same on time lies with the deductor. For the deductee, the deducted TDS can be claimed in the form of a tax refund after they file their ITR.

Overview – TDS

What is TDS return?

A deductor has to deposit the deducted TDS to the government and the details of the same have to be filed in the form of a TDS return. A TDS return has to be filed quarterly. Different types of TDS deductions have to be filed using different TDS return forms.

TDS Return Forms Particulars of the TDS Return Forms
Form 24Q Quarterly Statement for tax deducted at source from salaries
Form 26Q Quarterly Statement for tax deducted at source on all payments other than salaries.
Form 26QB Challan cum Statement of deduction of tax u/s 194-IA
Form 26QC Challan cum Statement of deduction of tax u/s 194-IB
Form 27Q Quarterly Statement for tax deduction on income received from interest, dividends, or any other sum payable to non residents.

What is TDS certificate?

Form 16, Form 16A, Form 16B and Form 16C are all TDS certificates. TDS certificates have to be issued by a person deducting TDS to the assessee from whose income TDS was deducted while making payment.

TDS Certificate Forms Particulars Frequency Due Date
Form 16 TDS on salary payment Yearly 31st May
Form 16 A TDS on non-salary payments Quarterly 15 days from due date of filing return
Form 16 B TDS on sale of property Every transaction 15 days from due date of filing return
Form 16 C TDS on rent Every transaction 15 days from due date of filing return

TDS Due Dates

TDS Due

TDS Rates can be checked at the following link- TDS Rate Chart for AY 2020-21 and AY 2021-22

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3 Comments

    1. Sudhir Acharya says:

      Yes, a good question. Detailed guidance on how to reclaim TDS say after receiving proceeds from sale of property by NRI would be extremely valuable.

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