Generally the person who earns the income pays tax on such income either in the form of advance tax or in the form of self-assessment tax. However in certain situations, the person making prescribed payments is required to deduct tax from such payments (at prescribed rates) and deposit the tax so deducted with the Government. Such form of tax deduction is called Tax Deduction at Source (TDS). The person who deducts the tax is called ‘deductor’ and the person whose tax is deducted is called ‘deductee’.
TCS is Tax Collected at Source in which seller collects the tax from buyers at the time of selling some prescribed goods. The person who collects the tax is called ‘collector’ and the person whose tax is collected is called ‘collected.
A seller collects the tax from buyers at the time of selling some prescribed goods. The person who collects the tax is called ‘collector’ and the person whose tax is collected is called ‘collectee’.
Every Person Deducting/Collecting tax at source is required to obtain a unique number called as Tax Deduction Account Number (TAN). The Number has to be quoted to the deductor/collector in every correspondence related to TDS/TCS. TAN is not mandatory in case of Tax Deduction Made on sale of immovable property.
Page Contents
- 1. Who is Liable to Deduct Tax at Source (TDS):
- 2. When To Deposit The Tax Deducted/Collected At Source To The Credit Of The Government?
- 3. What Is The Form Of Tds/Tcs Certificate And What Should Be The Frequency For Issuance Of Tds/Tcs Certificate?
- 4. What Is The Frequency And Due Date Of Statement Of Tds/Tcs?
- 5. What Are The Consequences Of Tds/Tcs Defaults And Non-Payment To Government?
- 6. What Is The Duty Of Deductor/Collector If The Deductee Does Not Furnish His Pan?
- 7. Tds Rate chart applicable for Financial Year 2019-20
1. Who is Liable to Deduct Tax at Source (TDS):
TDS is treated as pre-paid taxes as it is paid in advance to the government. It is the duty of the person who paid to someone for his service, goods etc. These payments are specified by the act like salary payment, interest on securities, contract payment, dividends etc. Who deduct TDS of payee is called deductor and whose tax is deducted called deductee. The following persons are liable to deduct TDS and deposit to government on behalf of deductee.
The following are the specified person who are liable to deduct TDS.
An Individuals or an H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession where accounts are required to be audited u/s 44AB, in the immediately preceding financial year.
All the companies and Partnership firms are liable to deduct TDS.
2. When To Deposit The Tax Deducted/Collected At Source To The Credit Of The Government?
| Time of payment or credit | Due date of payment of TDS |
| When the income or amount liable to TDS is credited or paid during any month other than the month of March | Tax shall be deposited on or before 7 days from the end of the month in which the deduction is made. |
| When the income or amount liable to TDS is credited or paid during the month of March | Tax shall be deposited on or before 30″ April. |
3. What Is The Form Of Tds/Tcs Certificate And What Should Be The Frequency For Issuance Of Tds/Tcs Certificate?
| Particulars | Form No. | Frequency of Certificate |
| TDS certificate in respect of tax deducted on salary | Form No. 16 | Annually |
| TDS certificate in respect of tax deducted on payments other than salary | Form No. 16A | Quarterly |
| TCS certificate | Form No. 27D | Quarterly |
4. What Is The Frequency And Due Date Of Statement Of Tds/Tcs?
TDS Due Date of F.Y 2019-20 (Assessment Year 2020-21) for Return Filling:
| Quarter | Period | Last Date of Filling |
| 1st Quarter | 1st April to 30th June | 31st July 2019 |
| 2nd Quarter | 1st July to 30th September | 31st Oct 2019 |
| 3rd Quarter | 1st October to 31st December | 31st Jan 2020 |
| 4th Quarter | 1st January to 31st March | 31st May 2020 |
TCS Due Date of F.Y 2019-20 (Assessment Year 2020-21) for Return Filling:
| Quarter | Period | Last Date of Filling |
| 1st Quarter | 1st April to 30th June | 15th July 2019 |
| 2nd Quarter | 1st July to 30th September | 15th Oct 2019 |
| 3rd Quarter | 1st October to 31st December | 15th Jan 2020 |
| 4th Quarter | 1st January to 31st March | 15th May 2020 |
The seller contractor i.e. Deductor has to file a quarterly return in form 27EQ and in Form 27A and has to issue the TCS certificate to Deductee in Form 27D on or before following Due Date:
Due Dates for issuing TCS Certificate F.Y 2019-20 (Assessment Year 2020-21)
| Quarter | Period | Last Date of Filling |
| 1st Quarter | 1st April to 30th June | 30th July 2019 |
| 2nd Quarter | 1st July to 30th September | 30th Oct 2019 |
| 3rd Quarter | 1st October to 31st December | 30th Jan 2020 |
| 4th Quarter | 1st January to 31st March | 30th May 2020 |
5. What Are The Consequences Of Tds/Tcs Defaults And Non-Payment To Government?
Failure to deduct tax or short deduction of tax or failure/delay in payment of the tax deducted to the credit of Government by the due date, would make the deductor an assessee in default in respect of such tax and also liable to penalty which is equal to the amount for which the assessee is a deemed defaulter.
In case of non-deduction/short deduction or delay in deduction of tax, interest @ 1% per month or part of the month is levied on the fix deductible amount and in case of delay in payment of tax after deducting, interest @ 1.5% per month or part of the month, till such time the tax deducted is not credited to the Government shall also be payable.
In case of delay in payment of tax after collecting, interest @1% per month or part of the month till such time the tax is not paid.
Failure on part of the deductor to pay the tax deducted at source, to the credit of Central Government makes him liable to rigorous imprisonment of a minimum period of three months but which may extend to seven years.
Late Filing Fee
Under Section 234E, you will have to pay a fine of Rs 200 per day (two hundred) until your return is filed. You have to pay this for every day of delay until the fine amount is equal to the amount you are supposed to pay as TDS.
For example, say that your payable TDS amount is Rs 5000 on 13th May and you pay it on 17th November (i.e. 189 days, counting 17th November). Then the calculation comes out to Rs 200 x 189 days = Rs 37800, but since this is greater than Rs 5000, you will have to pay only Rs 5000 as the late filing fee. Added to this, you also have to pay interest which is covered in the next section.
6. What Is The Duty Of Deductor/Collector If The Deductee Does Not Furnish His Pan?
If the deductee does not furnish PAN or furnishes incorrect PAN to the deductor/collector, the deductor/collector shall deduct tax at source at higher of the following rates:
(a) the rate prescribed in the Act; or
(b) at the rate in force, i.e.. the rate mentioned in the Finance Act; or
(c) at the rate of 20%.
7. Tds Rate chart applicable for Financial Year 2019-20
| S.no | Section | Nature of Income | Amount over which TDS to be deducted | Rate of TDS | ||
| If PAN is available | If PAN is not available | |||||
| 1 | 192 | Salary | to be seen as per slab | Average Rate | 30% | |
| 2 | 192A | Payment of accumulated balance due of Employees’ Provident Fund | if accumulated balance is more than 50000 | 10% | 42.744% | |
| 3 | 193 | Interest on securities | 10,000 | 10% | 20% | |
| 4 | 194 | Dividend other than of 115-O | 2,500 | 10% | 20% | |
|
5 |
194A |
Interest other than interest on securities | ||||
| – Interest received from Bank | 40,000 | 10% | 20% | |||
| – Interest received from others | 5,000 | |||||
| 6 | 194B | Income by way of winnings from lotteries Puzzles | 10,000 | 30% | ||
| 7 | 194BB | Income by way of winnings horse race | 10,000 | 30% | 30% | |
| 8 | 194C | Payment to contractors/ Subcontractors | 30000 one time | individual/HUF 1%
Others 2% |
20% | |
| 100000 in whole year | ||||||
| 9 | 194D | Insurance Commission | 15,000 | Other than company 5%
Company 10% |
20% | |
| 10 | 194DA | payment under Life Insurance Policy | 100,000 | 5% | 20% | |
| 11 | 194E | Payment to NR Sports Person | No Limit | 20% | 20% | |
| 12 | 194EE | Payment from National Savings Scheme | 2,500 | 10% | 20% | |
| 13 | 194F | Payments on account of repurchase of units by Mutual Fund | No Limit | 20% | ||
| 14 | 194G | Commission on sale of lottery tickets | 15,000 | 5% | 20% | |
| 15 | 194H | Payment of Commission or Brokerage | 15,000 | 5% | 20% | |
|
16 |
194-I |
Payment of rent | ||||
| – For Land, building or furniture. | 2,40,000 | 10% | 20% | |||
| – For plant and machinery or equipment | 2% | |||||
| 17 | 194 IA | Payment on transfer of certain immovable property other than agricultural land | 5,000,000 | 1% | 20% | |
| 18 | 194 IB | Payment of rent by individual/HUF other than those covered under 44AB | 50000 p.m | 5% | 20% | |
| 19 | 194 iC | Payment of Consideration (not being in kind) under Joint Development Agreement | No Limit | 10% | 20% | |
|
20 |
194J |
Fees for professional or technical services | ||||
| – Normally in all cases |
30,000 |
10% |
20% |
|||
| – person engaged only in the business of operation of call center (w.e.f 01/06/2017) | 2% | |||||
| 21 | 194LA | Payment of compensation on acquisition of certain immovable property | 250,000 | 10% | 20% | |
| 22 | 194LB | Income by way of interest from infrastructure debt fund to a non-resident or Foreign Co. | No Limit | 5% | 20% | |
|
23 |
194LBA |
Certain income from units of a business trust | ||||
| – Payment to resident | No Limit | 10% | 20% | |||
| – Payment to Non-resident | 5% | 20% | ||||
|
24 |
194LBB |
Income in respect of units of investment fund | ||||
| – Payment to resident | No Limit | 10% | 20% | |||
| – Payment to Non-resident | 30% | |||||
| 25 | 194LC | Income by way of interest from Indian company | No Limit | 5% | 20% | |
| 26 | 194LD | Income by way of interest on certain bonds and Government securities | No Limit | 5% | 20% | |
(Republished with Amendments)
Author Bio
Dear sir we have partnership firm is turnover less then one crore but firm is loss due to heavy depreciation but audit is compulsory in loss cases tds is applicable in my case of 94C , 94h, 94j
Sir if deductor is following cash basis of acc and deducted is following accrual basis of accounting when the payment for 2 years TDS deducted only when payment made and but deducted would be liable to show his income when acrrued wether next year he can claim the tds is there any guidence note to refer
We have to pay Rs.30000/-professional fee to our consulatant.. Is it within the threshhold limit?
Sir, Individual/HUF is not liable to deduct TDS when their Turnover or Gross Receipt from Business or Profession does not exceed the limit mentioned in 44AB i.e. 1 Cr or 50 Lakh for Business or profession respectively, and not when they are required to get audited.
Because individual/HUF may be audited for Turnover below 1 cr not opting presumptive scheme and also they are not liable to deduct TDS.
Dear Sir,
Is it possible to have a private consultation with you on income tax?
Thanks for the information
Please mention the rate on which TDS is to be deducted. For example in 194I for plant and machinery it is 2% and for land and building it is 10% (5% in case of individual or HUF not liable to Tax Audit -194IB).
You have mentioned U/s 194C yearly 75000/- that should be 100,000/-
Thanks for the Tax rate
limit of 75000 under 194C has been increased to 1,00,000.
Under Section 194C , Rs.30000/- criteria removed.
Link
https://contents.tdscpc.gov.in/en/tds-2017-2018.html
Pl check TDS threshold limit u/s 194C aggregate per anum is 100000/- mentioned above is 75000/- .
Thanks for update information