What is TDS (Tax Deduction at Source) ?
Description: Know in depth about Tax deduction at source, TDS filing, key dates, compliances, consequence of non- compliances. TDS
stands for Tax deduction at source, the concept of TDS was introduced by Income tax department, which makes it
mandatory for specified class of people who are making specified expenses or payments like rent, salary, commissions
etc. to deduct certain amount (known as TDS) from amount to be paid. In simple terms, suppose Mr. A has to clear
an invoice for professional fees, of INR 40000 raised by Mr. B, Mr. A will deduct 10 percent over this amount
in advance before making the payment to Mr. B. This amount so deducted by Mr. A is to be directly deposited to
central government and is known as TDS i.e. TAX DEDUCTED AT SOURCE. TDS is generally deducted on all kinds of
invoices be it professional fees invoices raised by freelancers or payments to be made in terms of rent or salary
etc. TDS deducted is deposited with reference to TAN i.e Tax Deduction Account Number.
When TDS is to be deposited: TDS dues dates
TDS is required to be deducted on payments to be made and TDS return is required to file on quarterly basis. Due dates
for TDS payment and returns are as follows :
|Month||Quarter ending||Due date of TDS Payment||Due Date of TDS return|
|April||30th June||7th May||31st July|
|May||30th June||7th June||31st July|
|June||30th June||7th July||31st July|
|July||30th September||7th August||31st October|
|Aug||30th September||7th September||31st October|
|Sep||30th September||7th October||31st October|
|October||31st December||7th November||31st January|
|November||31st December||7th December||31st January|
|December||31st December||7th January||31st January|
|January||31st March||7th February||31st May|
|February||31st March||7th March||31st May|
|March||31st March||30th April||31st May|
Consequences of non- compliance or non-filing of TDS returns:
- Consequence of Non – deduction or Late deposit of TDS
In case TDS is deducted and not deposited before the due date, 1.5% interest per month is required to be paid from date
of deduction till date of payment. In case TDS is not deducted wholly or partly, 1% per month is required to
be paid from date on which tax is deductible to date on which tax is actually deducted.
- Consequence of Late filing of TDS return
Deductor is liable to file the TDS return and is liable to pay INR 200 per day in case of any late filing from next day of due
date for the filing of TDS return to actual date of filing TDS return. Further, in case of non-compliance, person
may face penalty of INR 10,000/- to INR 1,00,000/- as may be directed by the Assessing Officer.
When TDS shall be deducted?
Tax deduction at source is mandatory whenever a prescribed threshold limit of prescribed expenses cross. This tax deduction
is applicable on service providers, salaried persons, interest earned on Fixed deposits etc. TDS deduction rates
are different for different sources and types of expenses.
Do all companies have to file for TDS returns?
Companies registered in India must file for TDS returns, Company360 provides monthly TDS return filing services for start-ups,
small medium enterprises and other body corporates. The fees for TDS Filing depends on number of TDS applicable