tax-deducted-at-source-under-income-tax-act.js
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import PageBanner from "@/components/reuseables/PageBanner";
import Image from "next/image";
import React from "react";
const banners = [
{
imageSrc: "/images/banner/knowledge.webp",
pageTitle: "Tax Deducted at Source under Income Tax Act",
homePageUrl: "/",
homePageText: "Blog",
activePageText: "Tax Deducted at Source under Income Tax Act",
},
];
const Taxblog = () => {
return (
<>
<PageBanner banners={banners} />
<div className="blog-details-area ptb-100">
<div className="container">
<div className="row">
<div className="col-lg-12 col-md-12">
<div className="blog-details-desc">
<div className="article-image">
<Image
src="/images/blog/blogs1.jpeg"
layout="fill"
alt="image"
className="image-fluid image"
/>
</div>
<div className="article-content">
<div className="entry-meta">
<ul>
<li>
<i className="ri-shield-user-line"></i>
<p> By Advith Consulting</p>
</li>
<li>
<i className="ri-calendar-2-line"></i>
<p>Jan 22, 2024</p>
</li>
</ul>
</div>
<h3>1. Introduction</h3>
<p>
The concept of Tax Deducted at Source (TDS) or Withholding
taxes as it is internationally called, was introduced as a
part of Income tax Act, 1961 (the Act) with the purpose to
collect tax from the very source of income. It requires that
the person or organization on whom the responsibility has
been cast called as Deductor, to deduct tax at the
appropriate rates from payments of specific nature which are
being made to the specific recipient called Deductee.
<br /> <br />
TDS is based on a concept called pay as you earn, where the
deductor deducts an equitable amount of tax periodically on
the earnings or income of the tax payer and remits into the
account of the Central Government which practically assist
the taxpayer from the burden of making a lumpsum payment at
the end of the financial year. The deductee from whose
income, tax has been deducted at source would be entitled to
get credit of the said amount on the basis of TDS
certificate issued by the deductor.
<br /> <br />
Payments of TDS constitute a substantial portion of the
government’s tax collection, and the same is estimated to
be over 42.45% of such collection (As given in the Annual
report of 2016-17 as given by the Finance Ministry of
India). TDS distributes the incidence of tax for a taxpayer
and provides for a simple mode of payment. It also prevents
avoidance or evasion of tax thus ensuring a regular flow of
revenue for the government.
</p>
<h6 className="blog-pointer">
1.1 Applicability of TDS provisions
</h6>
<p>
The Act provides for two broad framework for deduction of
taxes:
</p>
<p>
a) Some payments made to residents in India have been
prescribed to be subjected to withholding, for which
thresholds and rates have been prescribed under Chapter
XVII- B of the Act. A detailed list of rates as applicable
for the current financial year is available here
<br />
https://www.incometaxindia.gov.in/Pages/Deposit_TDS_TCS.aspx.
b) All payments to non-residents if they are taxable in
India have to be subjected to withholding taxes at rates
applicable for such non-resident
<br />
If however, the deductee fails to furnish the PAN to the
deductor, the rate of TDS will be 20% or rate specified
under the Act or rate in force, whichever is higher. In the
case of non-resident deductees having no PAN, if they
provide the information mentioned under rule 37BC including
a Tax Residency Certificate (TRC) from the country of their
residence, there is a relaxation for them from higher rate
of deduction.
<br />
All such persons who are required to withhold taxes, are
supposed to get a number called Tax deduction Account Number
(TAN) and using the TAN all the compliances regarding TDS
have to be done.
</p>
<h6 className="blog-pointer">
1.2.Non applicability of TDS on certain payments
</h6>
<p>
Section 196 of the Act provides that no deduction of tax
shall be made by any person from any sums payable to the
Government, Reserve Bank of India, a corporation established
by or under a Central Act which is under any law for the
time being in force exempt from income tax on its income or
a mutual fund specified under section 10(23D).
</p>
<h6 className="blog-pointer">
2. Compliances w.r.t to TDS provisions
</h6>
<h6 className="blog-pointer">
2.1 Prescribed Time for Payment of TDS and Mode of Payment
</h6>
<p>
Once TDS is deducted, the deductor must remit the same to
the credit of Government of India within timeline that are
prescribed as under:
</p>
<p>
- For deductions made in the month of April to February of
every year <br />
- on or before 7days from the month in which tax is
deducted. - For TDS made in March - within is 30th April.
The payment of withheld taxes is to be done using the
following forms: <br />
a) For TDS on payments made on selling an immovable property
A combined challan-cum-return by name Form 26QB <br />
b) For all other forms of TDS (resident or non-resident)
Challan No.281 The payments can be either made in designated
banks using the above challan or can be paid online from
www.tin-nsdl.com using internet banking.
</p>
<h6 className="blog-pointer">
2.2.TDS Returns and Forms <br /> <br />
Once the withheld taxes are paid to the Government, the due
credit has to be passed on to the deductee, such passing on
has to be done by filing an electronic TDS return. Such
returns are to be filed on a quarterly basis. The forms
prescribed for the filing are as under:
</h6>
<p>
The prescribed due date for filing of TDS returns is the
last day of the month subsequent to the quarter in which
returns are due. For ex: for April-June the due date is 31st
July and so on.
</p>
</div>
</div>
</div>
</div>
</div>
</div>
</>
);
};
export default Taxblog;