Tax deducted at source (TDS) is a system where a person making specified payments must deduct a percentage of tax before making payments. Common examples include deducting tax from salary payments or professional fee payments. The deducted tax amount is then deposited directly with the government by the paying entity. TDS aims to collect tax directly from the source of income.

1. SUBMITTED BY –
SUBMITTED TO-

2. • tax deducted at source is a system introduced by
income tax department, where the person responsible
for making specified payments such as salary ,
commission ,professional fees ,interest, rent, etc. is
liable to deduct a certain percentage of tax before
making payments. as the name suggest, the concept of
TDS is to deduct tax at its source. let us take an
example of TDS assuming the nature of payment is
professional fees on which the specified rate is 10%.
• XYZ ltd. Makes a payment of RS 50000/- towards
professionals fees to MR. ABC, then XYZ ltd. Shall
deduct a tax of RS 5000/- and make a net payment of RS
45000/- (50000/- deducted by RS 5000/-) to MR. ABC. The
amount of 5000/- deducted by XYZ ltd. Will be directly
deposited by XYZ ltd to the credit of the government.
WHAT IS TDS?

3. Tax deducted at source
Tax deducted on some payment
It is deducted on
payments
Applicable on
services(not goods)
TDS is
deducted, not
added
Under
income tax

4. WHO IS SUPPOSED TO
DEDUCT TAX AT SOURCE AND
WHEN?
• Any person who is responsible for making payment of nature covered
under the TDS provision of income tax act ,1961 shall be liable to deduct
tax at source. But no TDS has to deducted if a person making the payment
is an individual or HUF whose books are not required to be audited.
• However, just in case of rent payments made by individuals and HUF
exceeding RS 50000 per month ,are required to deduct TDS @5% although
the individual or HUF is not liable for a tax audit. Also, such individual and
HUF liable to deduct TDS@ 5% need not apply for tan.
• Employer deducts TDS at the income tax slab rates applicable on salary of
employees.
• Banks deduct TDS on interest income @10% if PAN is provided,but in case
of no PAN is provided, but in case of no PAN may deduct @20%. You can
submit form 15G and Form 15H to the bank if your total income is below
taxable limit in order that they don’t deduct TDS on your interest income.

5. TDS
RATES

6. WHEN TDS NEEDS TO
DEPOSIT TO GOVT.?
particular Payment mode Due date for paying
TDS
Government office Without challan Same day
Government office With challan 7th of next month
Government office Prerequisite opt to
be deposited the
bye employer
7th of next month
other For the month of
march
Or other month
30th April
7th of next month

7. THERE ARE
SOME CASE
WHERE TDS IS
NOT
DEDUCTED
SUCH AS:-
TDS is not deducted on reimbursement
of expenses like travelling expenses,
management expense ,etc.
 interest earned from recurring deposits
or saving account opened in co-
operative societies.
 payment to government /RBI/Statutory
corporation etc.
 on certificate issued by ITO u/s 197
 interest earned on Indian Vikas Patra
scheme

8.  FORM 24Q FOR SALARIES
 FORM 26Q FOR OTHER THAN SALARIES
 FORM 26QB FOR SECTION 194(IA)
 FORM 26QC FOR SECTION 194 (IB)
 FORM 26QD FOR SECTION 194 (M)
 FORM 27Q FOR NON-RESIDENT
 FORM 27EQ FOR TCS
This Photo by Unknown Author is licensed under CC BY-ND

9. THE DUE DATES FOR
QUARTERLY FILING OF
TDS RETURNS ARE AS
FOLLOWS:
QUARTER
QUARTER
PERIOD
DUE DATE TO
FILE TDS RETURN
1ST
QUARTER
APRIL TO JUNE ON 31ST JULY OF
THE SAME F.Y.
2ND
QUARTER
JULY TO
SEPTEMBER
ON 31ST OCT OF
THE SAME F.Y.
3RD
QUARTER
OCTOBER TO
DECEMBER
ON31ST JAN OF
THE SAME F.Y.
4TH
QUARTER
JANUARY TO
MARCH
ON 31ST MAY OF
THE NEXT F.Y.

10. LATE FILING OF RETURN OF TDS
• IF THE DEDUCTOR FAILS TO FURNISH THE TDS RETURN ON OR
BEFORE THE SPECIFIED DUE DATE ,HE SHALL BE LIABLE TO PAY
PENALTY UNDER SECTION 234E OF ₹200 PER DAY TILL THE DATE
OF DEFAULT SUBJECT TO THE MAXIMUM AMOUNT OF TDS IS
LIEVED.

11. HOW TDS WORK IN
TALLY?
FIRST WE HAVE TO ENABLE TDS
1) GOT--- F11---ENABLE TDS YES
2) create TDS nature of
payment (rule) CREATE LEDGERS
*CREATE EXPENSE LEDGER USE TDS
HERE
* CREATE TDS ON EXPENSE LEDGER
AND ENABLE TDS HERE
*CREATE PARTY LEDGER AND ENABLE
TDS HERE Create voucher entries
1) Journal vouchers for tds deduction
entry
2) Payment voucher for payment to
party or government