Meaning of "cut-off amount" in tds

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Jignesh Desai (Querist)
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08 June 2012 I was just going through the TDS Chart for the Financial Year 12-13 in which there is a column called "Cut Off Amount " . Can anyone please explain what exactly is the meaning of this "Cut Off Amount" ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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08 June 2012 TDS is required to be deducted only if the amount of payment exceeds this "cut-off" amount.

Jignesh Desai

Jignesh Desai (Querist)
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08 June 2012 Thanx a lot for the reply , Siddharth

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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08 June 2012 You are welcome. You should use the thanks button to convey your thanks.

Jignesh Desai

Jignesh Desai (Querist)
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08 June 2012 So , say , suppose a person receives Rs. 1,00,000 as Interest on Fixed Deposit from Banks in a perticular year & the cut - off is Rs. 10,000/- . How much TDS will be deducted ? (The rate of TDS on Interest from Banks is 10 %)

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CA Rakesh Goenka

CA Rakesh Goenka (Expert)
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08 June 2012 100000 * 10 % = 10000 okay...................................

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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08 June 2012 Please understand that the cut-off limit is for applicability or otherwise of TDS provisions.

If the payment during the year exceeds the cut-off limit, TDS will be deducted on the TOTAL PAYMENT and not on the amount in excess of the cut-off limit.

So, in this case, since the interest amount exceeds Rs. 10,000, TDS provisions are applicable.

Accordingly, TDS will be deducted on the TOTAL interest of Rs. 1 lakh.

TDS = Rs. 1 lakh * 10% = Rs. 10,000

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