Tax Deducted at Source- TDS

TDS Summary

Meaning– The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, 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.

Due date for payment of TDS-

Due date for Payment of TDS
Every month except March	7th of the next month
March	30th April
TDS under 194 IA	Within a period of 30 days from the end of the month in which deduction is made
TDS under 194 IB	Within a period of 30 days from the end of the month in which deduction is made
TDS under 194 IM	Within a period of 30 days from the end of the month in which deduction is made

Mode of deposit of TDS–

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

Electronic mode: E-Payment is mandatory for

1. 1. All corporate assesses; and
  2. All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.

Physical Mode: By furnishing the Challan 281 in the authorized bank branch

Who has to file TDS return– TDS return is mandatory for all persons who Deducts Tax at Source

Forms & Due date for filing TDS return–

Form	TDS Section	Details
Form 24Q	Section 192	Statement of deduction of tax from salary
Form 27Q	Section 193 to 196D	Statement of deduction of tax under section 193 to 196D in respect of the deductee who is a non-resident (not being a company) or a foreign company or resident but not ordinarily resident.
Form 26Q	Section 193 to 196D	Statement of deduction of tax under section 193 to 196D in any other case.
Form 26QB	Section 194-IA	Within a period of 30 days from the end of the month in which the deduction is made
Form 26QC	Section 194-IB	Within a period of 30 days from the end of the month in which the deduction is made
Form 26QD	Section 194M	within a period of 30 days from the end of the month in which the deduction is made

Due date to file TDS Return
1st Quarter	31st July
2nd Quarter	31st October
3rd Quarter	31st January
4th Quarter	31st May

Mode of File TDS return–

Furnishing of TDS statement electronically

The quarterly TDS statement shall be furnished electronically in any of the following mode:

1. Furnishing the statement electronically under digital signature; or
2. Furnishing the statement electronically along with the verification of the statement in Form 27A or verified through an electronic process.

TDS Certificate-

Form	Certificate Of	Frequency	Due Date
16	TDS on payment of salary	Yearly	31st May
16 A	TDS on non- salary payment	Quarterly	15 days from due date of filing return
16 B	TDS on sale of property	Every transaction	15 days from due date of filing return
16 C	TDS on rent	Every transaction	15 days from due date of filing return

TDS Credit– TDS deductions are linked to PAN numbers for both the deductor and deductee. If TDS has been deducted from any of income of assessee he must go through the Tax Credit Form26AS. This form is a consolidated tax statement.

Rate Chart of TDS:

Section no.	Section name	Rate of TDS (In case person is Resident of India)
192	Payment of Salary	Normal Slab Rate
192 A	Payment of accumulated balance of provident fund which is taxable in the hands of an employee.	10
193	Interest on securities (Debentures)	10
194	Income by way of dividend	10
194 A	Income by way of interest other than "Interest on securities"	10
194 B	Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort	30
194 BB	Income by way of winnings from horse races	30
194 C	Payment to contractor/sub-contractor HUF/Individual Others	Rate 1 2
194 D	Insurance commission	5
194 DA	Payment in respect of life insurance policy (the tax shall be deducted on the amount of income comprised in insurance pay-out)	5
194 E	Payment to non-resident sportsmen/sports association	Nil
194 EE	Payment in respect of deposit under National Savings scheme	10
194 F	Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India	20
194 G	Commission, etc., on sale of lottery tickets	5
194 H	Commission or brokerage	5
194 I	Rent Plant and Machinery Land or building or furniture or fitting	Rate 2 10
194 IA	Payment on transfer of certain immovable property other than agricultural land	1
194 IB	Payment of rent by individual or HUF not liable to tax audit	5
194 IC	Payment of monetary consideration under Joint Development Agreements	10
194 IJ	Fees for professional or technical services sum paid or payable towards fees for technical services sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; Any other sum	Rate 2 2 10
194 K	Income in respect of units payable to resident person	10
194 LA	Payment of compensation on acquisition of certain immovable property	10
194 LB	Payment of interest on infrastructure debt fund
194 LBA (1)	Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders.	10
194 LBB	Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]	10
194 LBC	Income in respect of investment made in a securitization trust (specified in Explanation of section 115TCA)	25 (in case of HUF/Individual) 30 (in case of other person)
194 M	Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.	5
194 N	Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office	2
194 O	Payment or credit of amount by the e-commerce operator to e-commerce participant	1
194 P	Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force	As per Slab
194 Q	Payment for purchase of goods of the aggregate value exceeding Rs. 50 lakhs	0.1
194 R	Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000	10
194 S	Payment on transfer of Virtual Digital Asset	1
	Any other Income	10

Threshold Limit of TDS-

Section no.	Details	Threshold Limit
192	Payment of Salary	If net taxable income is less than maximum amount which is not chargeable to tax (Rs. 2,50,000 for an individual, Rs. 3,00,000 for Senior Citizens and Rs. 5,00,000 for Super Senior Citizens)
192 A	Payment of accumulated balance of provident fund which is taxable in the hands of an employee.	If amount paid is less than Rs. 50,000.
193	No TDS from interest paid on debentures issued by a company in which public are substantially interested. Provided interest is paid by account payee cheque to resident individual or HUF	If amount paid or payable during the financial year does not exceed Rs. 5,000
193	No TDS from interest on 8% Saving (Taxable) Bonds 2003 and 7.75% Savings (Taxable) Bonds, 2018 paid to a resident persons	If amount paid or payable during the financial year does not exceed Rs. 10,000
193	No TDS from interest on 6.5% Gold bonds, 1977 or 7% Gold bonds, 1980 paid to resident individual	If a declaration is made that the nominal value of such bonds did not exceed Rs. 10,000 at any time during the previous year
194	No TDS from dividend paid by any mode other than cash to resident persons	If amount paid or payable during the financial year does not exceed Rs. 5,000
194 A	No TDS from interest (other than on interest on securities) paid by a banking company, co-operative bank or specified public company on time deposits	If amount paid or payable during the financial year does not exceed Rs. 40,000 (Rs. 50,000 in case of Senior Citizens)
194 A	No TDS from payment of interest on deposit with a post office under Senior Citizens Saving Scheme Rules, 2004	If amount paid or payable during the financial year does not exceed Rs. 50,000
194 A	No TDS from interest other than on securities (in any other case)	If amount paid or payable during the financial year does not exceed Rs. 5,000
194 A	No TDS from interest on compensation awarded by payment of Motor Accident Claims Tribunal	If amount paid during the financial year does not exceed Rs. 50,000
194 B	No TDS from Lottery, Cross Word Puzzles, card games and other games of any sort	If amount paid or payable during the financial year does not exceed Rs. 10,000
194 BB	No TDS from winnings from horse races	If amount paid or payable during the financial year does not exceed Rs. 10,000
194 C	No TDS from sum paid or payable to contractor	a) If sum paid or payable to a contractor in a single payment does not exceed Rs. 30,000 b) If sum paid or payable to contractor in aggregate does not exceed Rs. 1,00,000 during the financial year
194 D	No TDS from insurance commission paid or payable during the financial year	If amount paid or payable during the financial year does not exceed Rs. 15,000
194 DA	No TDS on the amount of income comprised in sum payable under a life insurance a police (including bonus) to a resident person	If amount paid or payable during the financial year does not exceed Rs. 1 lakh
194 EE	No TDS from payments made out of deposits under NSS	If amount paid or payable during the financial year does not exceed Rs. 2,500
194 F	Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India	No limit
194 G	No TDS from commission paid on lottery tickets	If amount paid or payable during the financial year does not exceed Rs. 15,000
194 H	No TDS from payment of commission or brokerage	If amount paid or payable during the financial year does not exceed Rs. 15,000. Further no tax to be deducted from commission payable by BSNL/ MTNL to their PCO Franchisees.
194 I	No TDS from payment of rent in respect of land &building, furniture or fittings or plant and machinery	If amount paid or payable during the financial year does not exceed Rs. 2,40,000
194 IA	No TDS from payment of consideration for purchase of an immovable property (other than agriculture land)	If consideration of immovable property and its stamp duty value doesn’t exceed Rs. 50,00,000
194 IB	No TDS from payment of rent in respect of any land or building (Other than the rent covered by section 194-I)	If amount paid or payable during the financial year does not exceed Rs. 50,000
194 IC	Payment of monetary consideration under Joint Development Agreements	No Limit
194 J	No TDS from payment of professional fees, technical fees, royalty and directors’ remuneration	If amount paid or payable during the financial year does not exceed Rs. 30,000
194 K	Income in respect of units payable to resident person	No Limit
194 LA	No TDS from payment of compensation on compulsory acquisition of immovable property (other than Agricultural Land)	If amount paid or payable during the financial year does not exceed Rs. 2.50 lakh
194 LBA (1)	Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders.	No Limit
194 LBB	Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]	No Limit
194 LBC	Income in respect of investment made in a securitization trust (specified in Explanation of section 115TCA)	No Limit
194 M	No TDS on Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.	If aggregate of sum paid or credited during a financial year does not exceed Rs. 50 lakh.
194 N	No obligation to deduct tax by a banking company, co-operative bank or a post office on cash withdrawal made by a person.	If aggregate of amount of cash withdrawal during the financial year from one or more account does not exceed Rs. 1 crore/20 lakhs (as the case may be).
194 O	No TDS from payment to participants of e-commerce	If amount paid or payable to resident Individual or HUF during the financial year does not exceed Rs. 5 Lakhs
194 P	Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force	Basic exemption limit of senior citizens or super senior citizens
194 Q	No TDS from payment made to resident seller	If amount paid or payable to resident seller for purchase of goods during the Financial Year if aggregate value of goods doesn’t exceed Rs. 50 lakhs
194 R	No TDS in case any benefit or perquisite is provided to a resident	If aggregate value of benefit/perquisite provided during the Financial Year doesn’t exceed Rs. 20,000
194 S	Payment on transfer of Virtual Digital Asset	No tax shall be deducted under this provision in the following circumstance: • If the consideration is payable by any person (other than a *specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year. • If the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.

*Specified person means:

An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;

An individual or a HUF who does not have any income under the head profits and gains of business or profession.

Penalties-

Section	Details	Penalty
234E	Penalty for failure to file statement within time prescribed in section 200(3) or in proviso to section 206C(3)	Rs. 200 for every day during which failure continues but not exceeding tax deductible/collectible
271 A	Penalty for failure to keep, maintain, or retain books of account, documents, etc., as required under section 44AA	Rs. 25,000
271 AA (2)	Reporting entity of international group (as referred to in Section 286) fails to furnish information and documents in accordance with provisions of Section 92D.	Rs. 5,00,000/-
271 AAC	Income determined by AO or CIT(A) includes any income referred to in sections 68 to 69D if such income is not included by assessee in his return of income or tax in accordance with section 115BBE has not been paid	10% of tax payable under section 115BBE
271 AAD	Penalty, if during any proceedings under the Act, it is found that in the books of accounts maintained by assessee, there is: a) A false entry; or b) Any entry relevant for computation of total income of such person has been omitted to evade tax liability.	100% of such false entries or omitted entry
271 AAE	Violation of the provisions of 21st proviso to section 10(23C) or section 13(1)(c) pertaining to passing of unreasonable benefits to trustees or specified person	(a) For the first violation: to the extent of income applied by the institution for the benefit of any interested party referred to in section 13(3); (b) For any violation in subsequent years: twice the amount of such income so applied (“double penalty”).
271 B	Penalty for failure to get accounts audited or furnishing a report of audit as required under section 44AB	One-half per cent of total sales, turnover or gross receipts, etc., or Rs. 1,50,000, whichever is less
271 BA	Penalty for failure to furnish a report from an accountant as required by section 92E	Rs. 1,00,000
271 DA	Penalty to be levied if a person received an amount of Rs. 3 lakh or more otherwise than by an account payee cheque or bank draft or use of electronic clearing system	Amount of such receipt
271 DB	Penalty for not providing facility for accepting payment through prescribed electronic modes of payment by a person carrying on business if total sales, turnover or gross receipts from business exceeds Rs. 50 crore.	Rs. 5,000 rupees for every day of default
271 FA	Penalty for failure to furnish statement of financial transactions or reportable account as required under section 285BA(1)	Rs. 500 per day of Default
271FA	Penalty for failure to furnish statement of financial transactions or reportable account within the period specified in notice issued under Section 285BA(5)	Rs. 1,000 per day of default
271 FAA	Penalty for furnishing inaccurate particulars in Statement of financial transactions or reportable account.	Rs. 50,000
271 FAB	Penalty to be levied if Investment Fund failed to furnish a statement or information or document as required under Section 9A(5)	Rs. 5,00,000
271 GA	If shares of a foreign company derives its value substantially from assets located in India, and such company holds such assets in India through an Indian concern, then, such Indian concern shall furnish the prescribed information to the tax authority in accordance with Section 285A. In case of failure, penalty shall be levied.	a) 2% of value of transaction, if such transaction results in transferring right of mgmt. or control in relation to Indian concern; b) Rs. 5,00,000 in any other case
271 GB(1)	Failure to furnish report in respect of international group as referred to in section 286(2)	Rs. 5,000 per day (If period of failure is up to 30 days) Rs. 15,000 per day (if period of failure continues beyond 30 days)
271 GB(2)	If any reporting entity referred to in Section 286 fails to produce the information and documents within the prescribed period	Rs. 5,000 for every day during which the failure continues.
271 GB(3)	If failure [as referred to in aforesaid cases] continues after order has been served directing entity to pay the penalty	Rs. 50,000 for every day for which such failure continues beginning from the date of serving such order.
271 GB(4)	If reporting entity provides inaccurate information in the report furnished under Section 286(2)	Rs. 5,00,000
271 H	Penalty for failure to deliver/cause to be delivered a statement within the time prescribed in section 200(3) or the proviso to section 206C(3), or furnishes incorrect information in the statement	Rs. 10,000 but may extend to Rs.1,00,000
271 - I	Penalty shall be levied if a person fails to furnish or furnishes inaccurate information in Form 15CA & 15CB as required under Section 195(6).	Rs. 1,00,000
271 J	Penalty shall be levied if an accountant or a merchant banker or a registered valuer has furnished incorrect information in any report or certificate.	Rs. 10,000 for each incorrect report or certificate
271 K	Penalty of default in submission of statement/certificate prescribed under section 35/Section 80G	Rs. 10,000 to Rs. 1 lakh
272 A(1)	Penalty for refusal or failure to : a) answer questions: b) sign statement c) attend to give evidence or produce books of account, etc., incompliance with summons under section 131(1) d) comply with notice u/s 142(1)/143(2) or failure to comply with direction issued u/s 142(2A)	Rs. 10,000 for each failure/default
272 A(2)	Penalty for failure to: a) furnish requisite information in respect of securities as required under section 94(6); b) give notice of discontinuance of business or profession as required under section 176(3); c) furnish in due time returns, statements or certificates, deliver declaration, allow inspection, etc., under sections 133, 134, 139(4A),139(4C), 192(2C), 197A, 200(2A), 203, 206,206C, 206C(3A), 206C(1A) and 285B; d) deduct and pay tax under section226(2) e) file a copy of the prescribed statement within the time specified in section 200(3) or the proviso to section 206C(3) (up to 1-7-2012) f) file the prescribed statement within the time specified in section206A(1)	Rs. 500 for every day during which the failure continues
272 AA(1)	Penalty for failure to comply with section 133B	Not exceeding Rs. 1,000
272 B	Penalty in case of default in complying with the provisions of section 139A relating to PAN or Aadhaar, i.e., failure to obtain, quote, or authenticate PAN or Aadhaar, as the case may be. The Finance (No. 2) Act, 2019 has provided for interchangeability of Aadhaar with PAN. Hence, consequential amendments have been made in penal provisions also.	Rs. 10,000 per default
272 BB(1)	Penalty for failure to comply with section 203A	Rs. 10,000 for each failure/default
272 BB(1A)	Penalty for quoting false tax deduction account number/tax collection account number/tax deduction and collection account number in challans/certificates/statements/documents referred to in section 203A(2)	Rs. 10,000
274	Income-tax officer can impose penalty only with the prior approval of Joint Commissioner	If amount of penalty exceeds Rs. 10,000
274	Assistant Commissioner or Deputy Commissioner can impose penalty only with the prior approval of Joint Commissioner	If amount of penalty exceeds Rs. 20,000
273 A	Commissioner or Principal Commissioner can reduce or waive penalty only with the previous approval of Principal Chief Commissioner or Chief Commissioner or Principal Director-General or Director-General	If amount of penalty exceeds Rs. 1,00,000

Prosecution-

S.No.	Details	Section	Condition
1	Prosecution of 6 months to 7 years with fine for willful attempt to evade tax, penalty or interest or under reporting of income	276 C (1)	If tax sought to be evaded exceeds Rs. 25 Lakhs
2	Prosecution of 6 months to 7 years with fine for willful failure to furnish return of income under section 139(1), or furnish return of income under section 139(8A) or, in response to notice under section 142(1)(i) or section 148 or section 153A	276 CC	If tax sought to be evaded exceeds Rs. 25 Lakhs
3	Prosecution of 6 months to 7 years with fine for furnishing false statement in verification or delivery of false account, etc.	277	If tax sought to be evaded exceeds Rs. 25 Lakhs
4	Prosecution of 6 months to 7 years with fine for abetment of false return, account, statement or declaration relating to any income chargeable to tax	278	If tax sought to be evaded exceeds Rs. 25 Lakhs

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