A person who owes some money to the other for some specific payment is liable to deduct tax at source and transfer the amount to the account of the Central Government. According to the Income Tax Act, TDS is deducted at the rates regulated by the tax department. it is applicable on the various incomes received such as salaries, interet received, commission payments, rent payment,consultation fees, professional fees etc. However,TDS is not regulated when paying fees to doctors or lawyers.
But, all this procedures together create a lot of confusion and instability. With Muneemg you can consult a professional 'CA' to clear all your doubts and assist you with all the financial management of your business.
TDS means Tax Deducted at Source. It is the amount deducted from payments of various kinds such as salary, contract payment, commission etc. This deducted amount can be adjusted against the tax due of the deductee.
It is the duty of the person who is making payment to someone for specified goods or services to deduct TDS and file TDS return. The specified payment includes salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. The person who deducts TDS is called deductor and the person whose tax is being deducted is called deductee.
TDS is not required to be deducted by Individuals and HUF except for those whose accounts are required to be audited u/s 44AB i.e. whose gross receipts in preceding financial year in case of business is more than 2 crore (AY 2017-2018) or 1 crore ( AY 2016-2017) and in case of profession 50 lakhs ( AY 2017-2018) or 25 lakhs (AY 2016-2017).
TAN is an alphanumeric 10 digit number required by a person who is liable to deduct TDS and file TDS return. Thus such person must make an application within a month of deducting TDS for allotment of Tax Deduction and Collection Number (TAN) in Form 49B. This number allotted is mandatory to mention in all TDS Certificates issued, returns, challans etc. If a person fails to apply for TAN he may be penalised up to Rs. 10,000/-.
Different types of TDS forms are as follows :-
It is a document which serves as an annexure to the intimation to be sent to the deductor. Intimation will be sent to the deductor through mail / post but a justification report will have to be downloaded from the portal.
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