Tax deduction at source (tds)

TDS Provisions in India – Overview & Compliance GuideIntroduction to TDS Provisions

Tax Deducted at Source (TDS) provisions are introduced with the following objectives:

• To ensure a continuous flow of revenue to the Government

• To curb tax evasion among taxpayers

• To encourage timely filing of Income Tax Returns, as taxpayers with TDS deductions usually file ITR

At Lex N Tax Associates, we provide professional TDS Services in Delhi NCR with experienced and qualified experts who assist businesses in accurate deduction, payment, and return filing.

Applicability of TDS Provisions

• Companies and LLPs must comply with TDS provisions irrespective of turnover

• Individuals and HUFs are required to deduct TDS if turnover exceeds ₹2 crore

TDS on Salary – Section 192

Any employer paying salary must deduct TDS as per applicable income tax slab rates prescribed under the Finance Act.

Current Income Tax Slabs:

• Up to ₹2,50,000 – Nil

• • 2,50,001 to ₹5,00,000 – 5%
• • 5,00,001 to ₹10,00,000 – 20%

• Above ₹10,00,000 – 30%

• Health & Education Cess applicable

Employees must submit Form 12BB to claim deductions under Sections 80C to 80U.

TDS on Contractors – Section 194C

• 1% when payment is made to Individuals or HUF

• 2% when payment is made to Companies

TDS on Rent – Section 194I

• 10% on rent exceeding ₹2,40,000 per year

• 2% on rent paid for machinery or equipment

TDS on Professional Fees – Section 194J

• 10% on professional fees exceeding ₹30,000 annually

• 2% on technical services with effect from 01.04.2020

TDS on Commission – Section 194H

• 5% if commission exceeds ₹15,000 in a financial year

TDS on Insurance Commission – Section 194D

• 5% if commission exceeds ₹15,000 annually

TDS on Interest on Securities – Section 193

• 10% if interest exceeds ₹5,000 in a year

TDS on Interest Other Than Securities – Section 194A

• 10% if interest exceeds ₹5,000

• For bank term deposits:

  • • 40,000 for individuals
  • • 50,000 for senior citizens

TDS on Purchase of Property – Section 194IA

• 1% if property value exceeds ₹50 lakh

• Not applicable on agricultural land in rural areas

TDS on Insurance Policy Maturity – Section 194DA

• 5% if payout exceeds ₹1,00,000

• Applicable when exemption under Section 10(10D) is not available

TDS on Rent by Individual/HUF – Section 194IB

• 5% if monthly rent exceeds ₹50,000

• Deducted in the last month of the financial year or tenancy

• Paid using Form 26QC on the TIN NSDL portal

TAN Application – Section 203A

Every person liable to deduct TDS must apply for TAN using Form 49B within 30 days of applicability.

TAN is a 10-digit alphanumeric number issued by the Income Tax Department.

Individuals or HUFs deducting TDS under Sections 194IA, 194IB, and 194IC are not required to obtain TAN.

TDS Payment Due Dates

• TDS must be deposited by 7th of the next month

• TDS for March must be deposited by 30th April

Interest on Late Payment:

1.5% per month from the date of deduction until payment.

TDS Return Filing

• TDS returns must be filed quarterly

• Due dates:

  • Q1, Q2, Q3: 31st of the following month

  • Q4 (March): 31st May

Lex N Tax Associates provides reliable TDS Return Filing Services in Delhi NCR, ensuring timely compliance and accurate reporting.

Higher TDS Rate – Section 206AA

If the deductee fails to provide a PAN, TDS will be deducted at 20%, irrespective of the applicable section.

Need Professional TDS Support?

Visit Lex N Tax Associates for expert TDS Services in Delhi NCR, including TDS deduction, payment, return filing, and compliance advisory.

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