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1. TDS
A part of Income Tax

2. What is TDS ?
● TDS is basically a part of income tax. It has to be deducted by a person for certain
payments made by them.
● TDS or Tax Deducted at Source is income tax reduced from the money paid at the
time of making specified payments such as
○ rent,
○ commission,
○ professional fees,
○ salary,
○ interest etc.
by the persons making such payments.

3. When to deduct and by whom?
Specified payment
as per Income Tax
Act
At the time of
making such
specified payment
Payments rates of
TDS are set in the
income tax act

4. Deposit , Filing
● TDS has to be deposited to the government by the 7th of the subsequent month.
However, for March its 30th April.
● TDS has to be deposited using Challan ITNS-281 on the NSDL portal. (Currently
through Income tax portal )
● Return is to be filed quarterly .
● Details required - TAN, amount of TDS deducted, type of payment, PAN of deductee,
etc.

5. Important Sections
1 192- Salary
2 194- Payment of any dividend
3
194 A- Interest from other than interest from
securities (from deposits with banks/post office/co-
operative society)
4 194 C- Payment to contractor
5 194 I - Rent
6 194 J - fee for professional services

6. Important Sections
1 192- Salary
Limit - Basic exemption limit of employee
Rate of TDS – Slab rates as per Union Budget
The employer’s can be-
● Companies (Private or Public)
● Individuals
● HUF
● Trusts
● Partnership firms
● Co-operative societies

7. Income Tax Slab
Existing Regime Slab Rates for FY 20-21 (AY 21-22)
New Regime Slab
Rates for FY 20-21
(AY 21-22)
Resident Individuals
& HUF < 60 years of
age & NRIs
Resident Individuals
& HUF > 60 to < 80
years
Resident Individuals
& HUF > 80 years
Applicable for All
Individuals & HUF
Rs 0.0 – Rs 2.5 lakh NIL NIL NIL NIL
Rs 2.5 – Rs 3.00 lakh
5% (tax rebate u/s
87a is available)
NIL NIL
5% (tax rebate u/s
87a is available)
Rs 3.00- Rs 5.00 lakh
5% (tax rebate u/s
87a is available)
NIL
Rs 5.00 – Rs 7.5 lakh 20% 20% 20% 10%
Rs 7.5 – Rs 10.00 lakh 20% 20% 20% 15%
Rs 10.00 – Rs 12.50
lakh
30% 30% 30% 20%
Rs 12.5 – Rs 15.00 lakh 30% 30% 30% 25%
> Rs 15 lakh 30% 30% 30% 30%

8. 192 - Example :
Making Payment of
Salary
Slab
rate
10,00,00
0
8,87,50
0
Govt
.
TCS
Rames
h
1,12,500

9. Important Sections
2 194- Payment of any dividend
Limit – 5,000
Rate of TDS – 10%
Example- Dividend from Reliance Ltd.

10. Important Sections
3
194 A- Interest from other than interest from
securities
Limit – Senior Citizens- 50,000
Others- 40,000
Rate of TDS – 10%
Example-
● Deposits with banks;
● Deposits with post offices
● Fixed deposit schemes
● Recurring deposit schemes.

11. Important Sections
4 194 C - Payment to contractor
Limit – Single transaction- 30,000
Aggregate transactions- 1,00,000
Rate of TDS – 2% for Individuals/HUF
– 1% for Other than Individuals/HUF
Example-
● Advertising
● Broadcasting and telecasting
● Carriage of goods and passengers by any mode of transportation, other than
railways
● Catering
● Manufacturing or supplying of a product according to the requirement or specification

12. Important Sections
5 194 I - Rent
Limit – 2,40,000
Rate of TDS – 2% for plant and machinery
10% for land/ building/ furniture/ fitting
Example- Rent of:
● Land or Building (including factory building)
● Land appurtenant to a building (including factory building)
● Machinery or Plant or Equipment
● Furniture or Fittings

13. 194 I - Example :
Making Payment of office
RENT
10%
80,000
8,000
72,000
Govt
.
RCB
RCB
VIJAY

14. Important Sections
6 194 J - fee for professional services
Limit – 30,000
Rate of TDS – 2% for fees for technical service
10% for All other payments covered under this section
Example-
● Professional fees
● Fees for technical services
● Remuneration paid to directors excluding salary
● Royalty
● Payments in the nature of non-compete fees
● Fees paid to not share any technical knowledge or know-how.

15. TDS Certificate
● TDS certificates issued by deductor of TDS.
● Form 16 - is issued by the employer to the employee.
● Form 16A - is issued by banks to the depositor when TDS is deducted on interest
from fixed deposits
Form Certificate of 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

16. TDS Credit
● TDS deductions are linked to PAN numbers for both the deductor and deductee.
● Go through Form 26 AS by logging in to Income tax portal.

17. Forms
● Forms-
○ 24 Q – Salary Payments
○ 26 Q - domestic payments other than salary.
Quarter Period Last Date of Filing
1st Quarter 1st April to 30th June 31st July 2022
2nd Quarter 1st July to 30th September 31st October 2022
3rd Quarter
1st October to 31st
December
31st Jan 2023
4th Quarter 1st January to 31st March 31st May 2023

20. What if PAN not available?
Section 206AA
TDS should be made at a higher rate of 20%

21. What if TDS is defaulted?
● Disallowance of a part of the expenditure: 30% of the expenditure
● Levy of interest until date of payment:
○ no deduction 1% per month
○ deducted but not paid 1.5% per month

22. How to check defaults?

23. How to check defaults?

24. How to check defaults?

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