Tax Deducted at Source

Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting prescribed percentage. It is managed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS). It has a great importance while conducting tax audits. Assessee is also required to file quarterly return to CBDT. Returns states the TDS deducted & paid to government during the Quarter to which it relates.

Section 302of Income Tax Act, 1961 by law notes.

Section 194I of Income Tax Act by Freakans.

This TDS on property is required to be deposited in 30 days from the end of the month in which deduction is made for all payments to be made on or after 01st June 2016. Before 01.06.2016 time limit to deposit TDS on property is 7 days from the end of the month in which deduction is made

Section 194C of Income Tax Act

Section 194C of Income Tax Act - Tax need to be deducted 1% (for individual, HUF)/ 2% (for others) of payment where payment is made for carrying out any work (including supply of labour for carrying out any work and advertisements) by a contractor/sub-contractor. Such work must be in pursuance of a contract (including sub contract) between the contractor and payer. TDS is to be made at the time of credit to the account of contractor or at the time of payment in cash or by cheque or draft or by any other mode whichever is earlier.

Tax Collected at Source (TCS) is income tax collected by seller in India from payer on sale of certain items. It is provided in section 206C of Income Tax Act 1961. The seller has to collect tax at specified rates from the payer who has purchased these items : category a

category b (grant of lease\license of the following

category c

category d

Example:- Sale of scrap by X to Y for Rs 500000

Y Pay amt of 500000 for scrap + VAT + TCS@1%

Sale Amt 500000

VAT Amt@5% 25000

TCS Amt@1% 5000

Total Amt 530000

This is the amount paid by buyer and buyer will get the TCS Paid Certificate from seller. Buyer take the credit of TCS at the time of filling of return of their income. Seller has to pay the amt to govt with the due date and file return of the TCS paid quarterly.

A deductor is required to issue a TDS certificate called form 16 for salaried employees and form 16A for non salaried employees within a specified time.

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Wikipedia