Vishwas (Student) (31 Points)
04 May 2012hi!
I have recently entered into studies of accounts. Being a noob, i confuse between the terms TDS and Income Tax. Can anybody please throw some light, what's the basic difference between TDS and Income Tax. Does filing TDS means you are paying your income tax. Or Is it something different from Income Tax ?
G.N.SENTHILKUMAR
(ACCOUNTS MANAGER)
(102 Points)
Replied 04 May 2012
Dear Student, Let me Define > 1. TDS : Tax Deducted at Source : means a certain percentage of Tax is deducted from the source of Income and the same will be accounted as payment of Tax for the Period.
2. Income Tax : a Tax levied for individual/corporate for the income assessed for the period (still clear : This is the tax liability on Income earned for the particular period)
TDS Deducted will be adjusted for Income Tax liability payment.
ashish gupta
( student)
(1922 Points)
Replied 04 May 2012
tds stands for tax deducted at source. it is income tax only.
Regit
(CA.Final)
(320 Points)
Replied 04 May 2012
You will pay 'Income Tax' to government.
Whereas some other person will pay your Income Tax to govt as 'TDS'
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 04 May 2012
TDS is a type of advance payment of Income Tax only. The basic nature of TDS is Income Tax only. However, TDS is required to be deducted on certain payments by the payer. TDS provision was introduced so as to avoid the concealment of income by the assessee as well as to prevent fake expenditure claims by the assessee. If we go on speaking on TDS, this forum will be very short. So please understande the basic meaning and then when you will study in deep, you will get thorough knowledge of it.
CA Siddhi Gupta
(Consultant (RAS))
(145 Points)
Replied 04 May 2012
TDS is withholding tax i.e. tax deducted from ur income before remmiting it to u by the person who is enjoying the services provided by u
both are paid to the govt
TDs by the person who dedcuts it and income tax by ur self.
U have to compute the tax liability on the total income earned by u including the income on which TDS is deducted. From the tax liability deduct the TDS amt (amt which has been already remmitted to the govt) and bal tax amt is payable
Varuna
(CA Student)
(102 Points)
Replied 04 May 2012
TDS is income tax only.... It is tax deducted at source. It is a way of collection of income tax by the Govt. The payer, in respect of certain payments as specified like rent, professional fees, salary etc has to deduct, a percentage of amount, as the tax and pay it to the income tax dept to the credit of the payee... the payee when he pays income tax, gets the credit of TDS, as the tax was already paid by the payer to income tax department on behalf of the assessee(payee), and hence assessee pays the difference of tax payable and TDS deducted. If TDS exceeds the tax liability, the assessee gets refund.
Rahul Sharma
(----------)
(8187 Points)
Replied 05 May 2012
TDS-pay as u earn
Rahul Sharma
(----------)
(8187 Points)
Replied 05 May 2012
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Vishwas
(Student)
(31 Points)
Replied 05 May 2012
@ PratapRegit :
You will pay 'Income Tax' to government.
Whereas some other person will pay your Income Tax to govt as 'TDS'
I really didnot understand this. Why any "Other Person" would pay my income tax ? I think, if i am filing TDS, then that means, i "MYSELF" am paying some amount from my income as tax ? Where does the "Other Person" comes here ?
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 05 May 2012
Vishwas, Here that person means that the other person will pay Income Tax to the Government on behalf of you and from your Income only. Suppose the other person owes you Rs. 1,00,000.00 for an expenditure eligbile for TDS and the rate of TDS is 10%, then he shall pay you only Rs. 90,000.00 and the balance Rs. 10,000.00 he shall pay to the government on your behalf as Tax Deducted at Source.
ashish gupta
( student)
(1922 Points)
Replied 05 May 2012
Vishwas be steady. you cant understand this in with 1 message.
the person through whom you are generating your income will deduct the tax from that income and deposit it to the govt. that is why it is called TDS ( tax deducted at source).
Suppose your employer pays you salary after deducting tax on that and he deposits that amount to the govt.
Vishwas
(Student)
(31 Points)
Replied 05 May 2012
ok, for salaried people, who get a monthly income from jobs/employers, this is understandable. But what about a person, who , say is a consultant, is a shopkeeper, or someone who's income is not constant ?
Also, For example, a person working for 10 days got some payment, and then again searching for work, and then got work for 5 days, earned income etc. I assume, he earns a good income in this process.
Thanks
V.
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 05 May 2012
Dear Vishwas,
For this detailed understanding, you need to go through the detailed sections of TDS as given in the Income Tax Act, 1961.
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