The document discusses the provisions for tax deducted at source (TDS) in India. It provides details on the types of payments that are covered under TDS, including salary, interest, dividends, rent, professional fees, etc. It explains the rate of tax deduction for different payments and the requirements for deductors to obtain a Tax Deduction Account Number (TAN) and file quarterly returns. The purpose of TDS is to collect tax on income at the time it accrues to avoid tax evasion.

1. 1
TAX DEDUCTED AT SOURCE
Dinesh Choudhari
Sanjay Suthar
18 August 2012

2. INDEX
 Introduction
 Payments covered
under the scheme of TDS.
 Provisions for filing
Returns to the Income Tax
Department.
 Effects of Tax Evasion

3. Introduction
To avoid cases of tax evasion, the Income-Tax Act has made
provisions to collect tax at source on accrual of income. Cases
included in the scheme are, generally, those where income can
be computed at the time of accrual of income. Under this
scheme, persons responsible for making payment of income
covered by the scheme are responsible to deduct tax at source
and deposit the same to the Government’s treasury within the
stipulated time. The recipient of income—though he gets only
the net amount (after deduction of tax at source)—is liable to
tax on the gross amount and the amount deducted at source is
adjusted against his final tax liability. The details of the scheme
of tax deduction and collection at source are briefly discussed in
this presentation. To conclude one can say that the scheme of
TDS is only payment of tax on adhoc basis by the payer of
income on behalf of recipient.

4. Setps for TDS

5. TAN
• Every deductor is required to obtain a
unique identification number called TAN
(Tax Deduction Account Number) which is
a ten digit alpha numeric number. This
number has to be quoted by the deductor in
every correspondence related to TDS

6. Tax Deduction & Collection Account Number
Every person deducting tax or collecting tax should
obtain a tax deduction & collection number
Such person should quote such number in every
challan for payment u/s 200 or 206C(3), in every
certificate furnished u/s 203 or u/s 206C(5)
In all the TDS returns delivered
In all other documents pertaining to such transaction
as may be prescribed in the interest of revenue.

7. Payment covered under the scheme of TDS.
 Salary (Sec.192)
 Interest on Securities (Sec.193)
 Dividends (Sec.194)
 Interest other than Interest on Securities (Sec.194A)
 Winnings from Lotteries or crossword puzzles (Sec.194B)
 Winnings from Horse Races (Sec.194BB)
 Payments to Contractors and Sub-contractors (Sec.194C)
 Insurance Commission (Sec.194D)
 Payment to Non-resident sportsmen or sports association
(Sec.194E)
 Payment in respect of NSC (Sec. 194EE)
Contd…

8. Payment covered under the scheme of TDS.
 Payments in respect of Repurchase of units of Mutual
Funds or UTI (Sec.194F)
 Commission on Sale of Lottery Tickets (Sec.194G)
 Commission or Brokerage (Sec.194H)
 Rent (Sec.194I)
 Fees for Professional or Technical Services (Sec.194J)
 Payment of Compensation on acquisition of certain
immovable property (Sec.194LA)
 Other Sums (Sec.195)
 Long term capital gain (Sec.196B)
 Income or Long term capital gain from Foreign Currency
bonds/Global Depository Receipts (Sec.196C)
 Income of Foreign Institutional Investors from Securities
(Sec.196D)

9. Salary (Sec.192)
Who is the payer Employer
Who is the recipient Employee
Payment Covered Taxable Salary of the employee
At what time TDS to be deducted At the time of payment
Maximum amount which can be paid
without tax deduction
The amount of exemption limit
(i.e.,Rs.160000/190000/240000 for A.Y.
2011-12)
Rate at which tax to be deducted. As per Calculation
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
The employee can make application in
Form No.13 to the Assessing Officer to get
the certificate of lower tax deduction or no
tax deduction.

10. Interest on Securities (Sec. 193)
Who is the payer Payer of interest on securities
Who is the recipient A resident person holding securities
Payment covered Interest on securities
At what time TDS to be deducted. At the time of payment or at the time of
credit, whichever is earlier
Maximum amount which can be paid
without tax deduction
Rs. 2500
Rate at which TDS to be deducted 10%
When the provisions are not applicable Interest on Central/State Government
securities
Is it possible to get the payment without tax
deduction or with lower tax deduction
The recipient can make application to the
Assessing Officer in Form No. 13 or
declaration to the payer in Form 15G or
15H as applicable

11. Dividends (Sec. 194)
Who is the payer Domestic company
Who is the recipient Resident shareholder
Payment Covered Deemed dividend under section 2(22)(e)
At what time TDS to be deducted At the time of payment
Maximum amount which can be paid
without tax deduction
Rs.2500
Rate at which TDS to be deducted 20%
When the provisions are not applicable Dividend covered by section 115-O
Is it possible to get the payment without tax
deduction or with lower tax deduction
The recipient can make application to the
Assessing Officer in Form No. 13 or
declaration to the payer in Form 15G or
15H as applicable

12. INTEREST OTHER THAN INTEREST ON
SECURITIES (Sec 194A)
Who is the payer Any person paying interest other than interest
on securities
Who is the recipient A Resident person
Payment covered Interest other than interest on securities
At what time TDS to be deducted. At the time of payment or at the time of credit,
whichever is earlier
Maximum amount which can be paid without
tax deduction
If payer is banking company, co-operative
engaged in banking business or Rs 10000/- if
Payer is any other person Rs 5000/-
Rate at which TDS to be deducted 10% if the recipient is resident non-corporate
assessee and 20% if the recipient is resident
corporate assessee
When the provisions are not applicable If the payee are Insurance companies or
financial institutions including co-operative
societies etc.
Is it possible to get the payment without tax
deduction or with lower tax deduction
Declaration to the payer in Form 15G or 15H
as applicable

13. Winnings from Lotteries or Crossword Puzzles
(Sec. 194B)
Who is the payer Any person paying winnings from
lotteries/crossword puzzles/card games/other
games
Who is the recipient Any Person
Payment covered Winnings from lotteries/crossword
puzzles/card games/other games
At what time TDS to be deducted. At the time of Payment
Maximum amount which can be paid without
tax deduction
If the amount payment is Rs. 10000/- or less
than Rs. 10000/-
Rate at which TDS to be deducted 30%
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
Not Possible

14. Winnings From Horse Races (Sec. 194BB)
Who is the payer Any person paying winnings from horse
races
Who is the recipient Any person
Payment covered Winnings from Horse Races
At what time TDS to be deducted. At the time of payment
Maximum amount which can be paid
without tax deduction
If the amount of payment is Rs. 5000/- or
less than Rs. 5000/-
Rate at which TDS to be deducted 30%
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
Not Possible

15. Payments to Contractors And Sub-contractors
(Sec.194C)
Who is the payer Specified person
Who is the recipient A resident person
Rate of TDS 2%
Payment Covered Consideration for any Work Contract
At what time TDS has to be
deducted
At the time of payment or at the time of credit
Maximum amount which can
be paid without tax deduction
The tax is required to be deducted if a single payment exceeds
Rs. 30000/- or if the aggregate payments exceed Rs. 75000/-
per annum
Is it possible to get the
payment without tax
deduction or with lower tax
deduction
The recipient can make application to the Assessing Officer in
Form No. 13

16. Insurance Commission (Sec.194D)
Who is the payer Any person paying insurance commission.
Who is the recipient A resident person
Payment covered Insurance Commission
At what time TDS to be deducted. At the time of payment or at the time of credit
whichever is earlier
Maximum amount which can be paid without
tax deduction
If the amount of payment is Rs. 20000/- or
less than Rs. 20000/-
Rate at which TDS to be deducted 10% if the recipient is resident non-corporate
assessee and
20% if the recipient is resident corporate
assessee
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
The recipient can make an application in
Form No. 13 to the Assessing Officer to get
the certificate of lower tax deduction or no tax
deduction.

17. Payment to Non-resident sportsmen or
sports association (Sec.194E)
Who is the payer Any person making payment to non-resident
sportsman/sports association
Who is the recipient Non-resident sportsman/sports association
Payment covered Payment to non-resident sportsman/sports
association
At what time TDS to be deducted. At the time of payment or at the time of credit
whichever is earlier
Maximum amount which can be paid without
tax deduction
Nil
Rate at which TDS to be deducted 10%+ Education cess etc and Surcharge as
applicable
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
No Provision

18. Payments in respect of NSC (Sec.194EE)
Who is the payer Post Office
Who is the recipient Any Person
Payment covered Payment (Principal+Interest) out of National
Saving Scheme, 1987.
At what time TDS to be deducted. At the time of payment
Maximum amount which can be paid without
tax deduction
If the amount of payment is Rs.2500 or less
than Rs.2500
Rate at which TDS to be deducted 20%
When the provisions are not applicable The payment is made to legal heirs of the
deceased depositor

19. Payments on account of repurchase of units of Mutual Funds
or UTI (Sec. 194F)
Who is the payer Mutual Fund or UTI
Who is the recipient Unit holder under section 80CCB
Payment covered Payment on account of repurchase of units
referred to in section 80CCB
At what time TDS to be deducted. At the time of payment
Maximum amount which can be paid without
tax deduction
--
Rate at which TDS to be deducted 20%
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
No Provision

20. Commission on Sale of Lottery Tickets
(Sec.194G)
Who is the payer Any person paying commission of sale of
lottery tickets
Who is the recipient Any person
Payment covered Commission on sale of lottery tickets
At what time TDS to be deducted. At the time of payment or at the time of credit,
whichever is earlier
Maximum amount which can be paid without
tax deduction
If the amount of payment is Rs. 1000 or less
than Rs. 1000
Rate at which TDS to be deducted 10%
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
The recipient can make an application in
Form No. 13 to the Assessing Officer to get a
certificate of lower tax deduction or no tax
deduction

21. Commission or Brokerage (Sec.194H)
Who is the payer Any person paying commission or
brokerage
Who is the recipient Any resident person
Payment covered Commission or brokerage (not being
insurance commission)
At what time TDS to be deducted. At the time of payment or at the time of
credit, whichever is earlier
Maximum amount which can be paid
without tax deduction
If the amount of payment is Rs. 5000 or
less than Rs. 5000
Rate at which TDS to be deducted 10% (up to may 31, 2007 : 5%)
When the provisions are not applicable --
Is it possible to get the payment without tax
deduction or with lower tax deduction
The recipient can make an application in
Form No.13 to the Assessing Officer to get
a certificate of lower tax deduction or no tax
deduction

22. Rent (Sec.194-I)
Who is the payer Any person paying rent (not being an individual
or HUF whose books of account are not
required to be audited under section 44AB in the
immediately preceding financial year)
Who is the recipient A Resident Person
Payment covered Rent
At what time TDS to be deducted. At the time of payment or at the time of credit,
whichever is earlier
Maximum amount which can be paid
without tax deduction
Rs. 180000/-
Rate at which TDS to be deducted For Plant and Machinary Rent 2% and for
For Use of and Land or Building including
Furniture etc.
Individual Huf 10%
For any other 20%
Is it possible to get the payment without
tax deduction or with lower tax
deduction
The recipient can make application in Form No.
13

23. Fees for Professional or Technical Services
(Sec.194J)
Who is the payer Any person paying professional charges (not
being an individual or HUF whose books of
account are not required to be audited under
section 44AB in the immediately preceding
financial year)
Who is the recipient Any Person
Payment covered Professional services, technical services,
Royalty,
At what time TDS to be deducted. At the time of payment or at the time of credit,
whichever is earlier
Maximum amount which can be paid
without tax deduction
If the amount of payment during the financial
year is Rs. 30000 or less than Rs. 30000
Rate at which TDS to be deducted 10%
Is it possible to get the payment without
tax deduction or with lower tax deduction
The recipient can make application in Form No.
13

24. Provisions for Filing Returns
Different Payments In case the person deducting tax is a
company or a Government
department or a person whose books
are required to be audited u/s. 44AB
in the immediately preceding year or
in whose case number of deductees
in any of the quarterly statements in
the immediately year is 20 or more
In case the person
deducting tax is
any other person
Time-limit for submission
of return by the person
deducting tax
Salary Form No. 24Q in Electronic format
and Form No. 27A
Form No. 24Q Within 15 days from the
end of each quarter (31st
May in case of last
quarter)
Payment (other
than salary) to a
resident
Form No. 26Q in Electronic format
and Form No. 27A
Form No. 26Q Within 15 days from the
end of each quarter (31st
May in case of last
quarter)
Payment (other
than salary) to a
non-resident
Form No. 27Q in Electronic format
and Form No. 27A (quarterly)
Form No. 27Q
(quarterly)
Within 15 days from the
end of each quarter (31st
May in case of last
quarter)

25. Issue TDS Certificates Sec. 203
Sr.
No.
Form no Periodicity Cut off Date
1 16 For
Salary
Annual 31st May of following financial
year
2 16A Other
than
salary
Quarterly Within 15 days from due date
of furnishing the TDS
statement under rule 31A

26. Dates for Payment of TDS
Deductor For MARCH For April to February
Government On or before 7th
of next month for
salary
On the same day for other than
salary & on or before 7th of
next month for salary
Other than
Government
On or before 30th
April
On or before 7th of next month
Special
Cases
30th April Quarterly payment on or before
7th of the month succeeding
quarter

27. Furnishing of quarterly returns for payment of interest
to residents without Deducting Tax (Sec. 206A)
• Banking company, Cooperative societies, &
Public Companies shall furnish quarterly
return to department in respect of payments of
Interest (other than Interest on Securities) in
any computer readable media.

28. Collection of Tax
Who is the payer Seller
Who is the recipient Buyer
Payment covered As per Details in next slide
At what time TDS to be Collected. At the time of receipt or at the time of
debiting the account, whichever is earlier
Maximum amount which can be paid
without tax collection
Nil
Rate at which TDS to be deducted As per Details in next slide
Is it possible to get the payment without tax
deduction or with lower tax deduction
The recipient can make an application in
Form No. 13 to the Assessing Officer to get
a certificate of lower tax deduction or no tax
deduction

29. Rates for Collection of TAX

30. 30
Thank You!

31. Effects of Evasion of TDS (Sec 201)
Sr.
No.
Reasons Effects
1. Non deduction
of TDS
The expenditure for which TDS to be
deducted gets DISALLOWED & penal interest
@1% for every month or part of month from
the date on which such tax was deductible to
the date of deduction
2. Non payment of
TDS
The expenditure for which TDS deducted but
not paid gets disallowed
3. Less deduction
of TDS.
The amount less deducted is required to be
paid by the deduct or along with penalty
4. Late Payment of
TDS
The deductor should have to pay penal interest
@1.5% for every month or part of month
from date of deduction to the date of
payment.

32. Penal Provisions