Tds
This query is : Resolved
Vasudevanaidu routhu
(Querist)
21 April 2015
Dear Sir please tell me Briefly about TDS...
CA AnKiT BoHrA (AB)
(Expert)
22 April 2015
Tds is tax deducted at source... It actually means tax at the time of generation of income..
For all rules use google
For all rules use google
22 April 2015
Overview of TDS:
TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries, one of the countries is USA. The concept of TDS envisages the principle of "pay as you earn". It facilitates sharing of responsibility of tax collection between the deductor and the tax administration. It ensures regular inflow of cash resources to the Government. It acts as a powerful instrument to prevent tax evasion as well as expands the tax net.
Objectives of TDS:
Tax Deducted at Source was introduced in India to facilitate the payment of tax while receiving the income and it follows the concept of “Pay as you earn”. However, the purposes of tax deducted at source is changing slowly. Now, the objectives of tax deducted at source are:
• To enable the salaried people to pay the tax as they earn every month. This helps the salaried persons in paying the tax in easy instalments and avoids the burden of a lump sum payment.
• To collect the tax at the time of payment of income to various assessees such as contractors, professionals etc.
• Government requires funds throughout the year. Hence, advance tax and tax deducted at source help the government to get funds throughout the year and run the government smoothly.
• It helps to spread the tax net wide enough to include persons who might otherwise have evaded taxes. The minimum thresholds are raised and the rates are reasonable and comparable with the rates prevailing in other countries. Hence, it is very vital to make all the persons earning the taxable income pay the tax. But, the best way to make them pay is to deduct tax at source.
Who shall deduct tax at source?
Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax.
However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 100 lakh or Rs. 25 lakh respectively in previous year, he is required to deduct tax at source. Example: Tax Audit is applicable in FY 2013-14 so TDS required to be deducted from FY 2014-15.
You can also provide me your email ID I will mail you my article on TDS.
TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries, one of the countries is USA. The concept of TDS envisages the principle of "pay as you earn". It facilitates sharing of responsibility of tax collection between the deductor and the tax administration. It ensures regular inflow of cash resources to the Government. It acts as a powerful instrument to prevent tax evasion as well as expands the tax net.
Objectives of TDS:
Tax Deducted at Source was introduced in India to facilitate the payment of tax while receiving the income and it follows the concept of “Pay as you earn”. However, the purposes of tax deducted at source is changing slowly. Now, the objectives of tax deducted at source are:
• To enable the salaried people to pay the tax as they earn every month. This helps the salaried persons in paying the tax in easy instalments and avoids the burden of a lump sum payment.
• To collect the tax at the time of payment of income to various assessees such as contractors, professionals etc.
• Government requires funds throughout the year. Hence, advance tax and tax deducted at source help the government to get funds throughout the year and run the government smoothly.
• It helps to spread the tax net wide enough to include persons who might otherwise have evaded taxes. The minimum thresholds are raised and the rates are reasonable and comparable with the rates prevailing in other countries. Hence, it is very vital to make all the persons earning the taxable income pay the tax. But, the best way to make them pay is to deduct tax at source.
Who shall deduct tax at source?
Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax.
However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 100 lakh or Rs. 25 lakh respectively in previous year, he is required to deduct tax at source. Example: Tax Audit is applicable in FY 2013-14 so TDS required to be deducted from FY 2014-15.
You can also provide me your email ID I will mail you my article on TDS.
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