Tax Deducted at Source

A person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.

The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

How to pay Tax Deducted/Collected at source?

Tax deducted or collected at source shall be deposited to the credit of the Central Government by following modes:

  1. Electronic mode: E-Payment is mandatory for
    a) All corporate assesses; and
    b) All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.
  2. Physical Mode: By furnishing the Challan 281 in the authorized bank branch

TDS Return

Form 24Q

  1. In order to declare an individual’s returns in detail, one has to complete this form.
  2. The data is based on the person’s salary payments and tax deductions given.
  3. The report is made on a quarterly basis by the firms and companies in India.
  4. Personal details of the deductor, deductee, challan, and salary TDS should be provided.
  5. The form is downloaded and submitted online accompanies with required documents presented in a person, company or an organisation.
  6. If the deductor is a government office, company’s principal officer, then the form is mandatorily required to submit the form online. Further, the form should be submitted online if the accounts are audited for the prior year under 44AB of the Income Tax Act, 1961 or when there are 20 or more records in a statement of the deductees for a quarter in a financial year. Submission of Annexure 1 and II also require online submission.
  7. However, Annexure II will be only filed in the last quarter of the financial year.

Form 26Q

  1. This form is mandatory for making a declaration of the person’s details of TDS returns.
  2. This takes payments other than salary into consideration.
  3. This disclosure is required to be submitted by any person living in India or is an Indian citizen.
  4. The form applies under subsection 3 of section 200 of Income Tax Act, 1961.
  5. The form is filled as a declaration based on other articles for reference including section 193, 194 I, 194 J, 194 LA, 194 C, 194 D, 194 EE, 194 F, 194 G, 194H, 194, 194A, 194BB and rule 31A.
  6. The form should reflect the type of deductor, government or non-government.
  7. The non-government deductors have to submit their PAN necessarily.
  8. For government deductors, “PANNOTREQD” should be mentioned.

TDS Certificate Form 16/16A

Form 16/ 16A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between deductor and deductee. It is mandatory to issue these certificates to Tax Payers.

1% TDS Rule on Sale of Property

On sale of property exceeding Rs. 50 lakhs in India, a tax of 1% has to be deducted on the total sale consideration before making the payment to the seller.
The buyer must then deposit this 1% TDS to the Government. PAN of both the buyer and seller must be compulsorily specified while filling out Form 26QB to ensure that sellers don’t avoid taxes on the capital gains they make.