This document outlines the tax deduction at source (TDS) compliance process in India. It applies to all corporate and government deductors who are required to get their accounts audited. The key steps are: 1) apply for and obtain a TAN number; 2) deduct tax from applicable payments like salaries, interest, rent, etc. at the time of payment or credit; 3) deposit the deducted tax with the government treasury by the due dates; 4) file quarterly electronic TDS returns; and 5) issue TDS certificates to deductees. Failure to comply can result in penalties like interest charges, fines, and in severe cases, imprisonment.

1. Tax Deduction At Source
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2. To Whom TDS is applicable :-
• All corporate Deductors as well as Collectors
• All govt. Deductors as well as Collectors.
• Who Get their accounts audited u/s 44AB of
Income Tax Act , 1961 in the immediately
preceding financial year.

3. Process of Compliance
• Apply and get TAN (Tax deduction Account
number).
• Deduct Tax at source on applicable payment.
• Pay the deducted tax to Govt. treasury.
• File quarterly E TDS return.
• Download and issue TDS certificates to
deductees.

4. Apply and get TAN (Tax deduction
Account number).
• Application inform No.49B.
• Apply within 30 days you are liable to deduct
TDS.
• Get the TAN registered to TRACES.

5. Deduct Tax at Source on applicable payment.
• Following charts shows payments on which tax is required to
be deducted,
Section Particulars Rate of TDS On Payment
Exceeding
192 Salary As per IT slab rate Taxable Income Rs.
250000 or more.
194 A Interest other than
on securities
10 % Rs.5000
194 C Payment to
Contractors/
Subcontractor/
Advertisement
1 % for Ind./HUF
2% for Others
Rs. 30000/- for single
payment
Rs. 75000/- for
aggregate
payment during
Financial Year

6. Section Particulars Rate of TDS On Payment
Exceeding
194 H Commission or
Brokerage
10 % Rs.5000
194 I Rent of Land,
Building or
Furniture
10 % Rs. 180000
Rent of Plant &
Machinery
2 % Rs. 180000
194 IA Transfer of
Immovable
Property (w.e.f.
01.06.2013)
1 %
Rs. 50 lacs
194 J Professional /
technical services,
royalty
10 % Rs. 300000
194 LA Compensation on
acquisition of
certain immovable
property
10 % Rs. 2 Lacs.

7. • TDS at higher rate of 20% or TDS rate, whichever is higher, has
to be deducted if the deductee does not provide PAN to the
deductor.(section 206AA)
Section Particulars Rate of TDS On Payment
Exceeding
194 J (1), (ba) Remuneration /
fees/commission to
director of the
company
10 %
--
194 L Compensation on
acquisition of
Capital Asset
10 % Rs. 1 lakh.

8. Point of Deduction of TDS
& Penalty
• Salary :At the time of payment
• Other Payments :When income paid or
credited including credit to "Payable" or
"Suspense" account.
• Consequences of failure to deduct tax:
Interest - 1% of the tax deductible.
Penalty - equal to the amount of tax
deductible but not deducted.

9. Due Dates for depositing TDS
• Consequences of default :
• Interest @ 1.5% of tax not deposited is payable
u/s 201(A).
• Punishable with rigorous imprisonment for a
term which shall not be less than three months
but which may extend to seven years and with
fine under Section 276(B).
Quarter Salary Payament Other Payments
April to February 7th of next month 7th of next month
March 30 th April 30 th April

10. Issue of TDS Certificate
TDS on TDS Certificate in Due to issue
(Rule 31 A)
Penulty if form not
issued
Salary Form No. 16 31st May Rs. 100 per day
maximum up to TDS
amount.
Other Payments Form no. 16 A Within 15 days from
due of ETDS return.

11. E TDS Return Forms
Section E TDS Return in
192 Salary Form 24 Q
Others Form 26 Q
If Deductee is NRI Form 27Q

12. Due Dates for submitting Quarterly
E TDS Return
Quarter ending Due Date for others
Due date,if deductor is an
office of the Government
30th June 15th July 31st July
30th September 15th October 31st October
31st December 15th January 31st January
31st March
15th May of the financial
year immediately following
the financial year in which
deduction is made.
15th May of the financial
year immediately following
the financial year in which
deduction is made

13. Penal Provisions for failure / default in submitting
returns /statements
Section 272A(2)
Failure to submit returns
prescribed under Section
200(3)
Penalty of Rs. 100/- every
day during which the
failure continues upto a
maximum of TDS amount.
Section 234E
Failure to TDS return in
time
Fine of Rs. 200/- every day
during which the failure
continues will be levied on
deductor as long as the
default continues, subject
to a maximum of TDS
amount.
Section 271H
(i) If deductor defaults for
more than 1 year in filing
TDS Statement (ii) If
deductor furnishes
incorrect details like PAN,
TDS amount, Challan
Penalty which shall not be
less than ten thousand
rupees but which may
extend to one lakh rupees.