income tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 April 2011
dear sir i want to know that what is the difference between tds and income tax
06 April 2011
Difference between TDS and Income Tax
Before we dwell further on TDS and income tax, let us see what is Income Tax. Based on the strength of an act passed in the Indian Parliament called the Income Tax Act, anybody who earns an income in India is liable to pay an income tax. The Geographic limit or boundaries of India are not the limiting criteria to deem the income as income earned in India. Some time even income earned outside the country can be categorized as Income earned in India.
The difference between TDS and Income Tax is as follows :
• Although TDS is a part of the Income Tax that has to be paid by an assesse, it is deducted by a third party, basically an entity that is going to make you some payment. And this entity deducts the TDS from payments due to the payee and deposits it with the Income Tax Department on behalf of the payee.
• The income tax that is paid to the income tax department by you in person is the amount that is arrived at after assessing your total income for the financial year. This is filed with the Income Tax Department as advance Tax.
• If TDS is less than the tax payable for the financial year, then you have to pay the tax on the additional income also, and if the TDS is more than the tax that has been made liable to you, in that case the Income Tax Department will make the refund from the TDS that has already been paid in excess.
• To deposit TDS we need to use challan - 281 and in the case of Income Tax we use challan - 280
Before we dwell further on TDS and income tax, let us see what is Income Tax. Based on the strength of an act passed in the Indian Parliament called the Income Tax Act, anybody who earns an income in India is liable to pay an income tax. The Geographic limit or boundaries of India are not the limiting criteria to deem the income as income earned in India. Some time even income earned outside the country can be categorized as Income earned in India.
The difference between TDS and Income Tax is as follows :
• Although TDS is a part of the Income Tax that has to be paid by an assesse, it is deducted by a third party, basically an entity that is going to make you some payment. And this entity deducts the TDS from payments due to the payee and deposits it with the Income Tax Department on behalf of the payee.
• The income tax that is paid to the income tax department by you in person is the amount that is arrived at after assessing your total income for the financial year. This is filed with the Income Tax Department as advance Tax.
• If TDS is less than the tax payable for the financial year, then you have to pay the tax on the additional income also, and if the TDS is more than the tax that has been made liable to you, in that case the Income Tax Department will make the refund from the TDS that has already been paid in excess.
• To deposit TDS we need to use challan - 281 and in the case of Income Tax we use challan - 280
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