TDS deduction liability ?

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This discussion clarifies TDS deduction liability for assessees who underwent a tax audit last year. It addresses whether having a turnover between ₹1 to ₹2 crore and showing a net profit less than 8% or 6% under section 44AD necessitates obtaining a TAN and deducting TDS. The rationale is explained, noting that TDS liability for individuals/HUFs arises if preceding year's turnover exceeded ₹1 crore (business) or ₹50 lakh (profession), requiring TDS deduction on specified payments in the subsequent year. For companies, firms, and LLPs, TDS liability applies regardless of turnover.

Rishita Nahar

Rishita Nahar (Querist)

24 December 2025 If an assessee had got tax audit last year, turnover
A. Upto 1 crore
B. 1 to 2 crore
Showing net profit less than 8/6 percent in 44AD.
Is the assessee required to get TAN and deduct TDS?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

25 December 2025 A. No.
B. Yes.

Rishita Nahar

Rishita Nahar (Querist)

25 December 2025 So what's the rationale behind it?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

25 December 2025 TDS liability under the Income Tax Act arises for individuals and HUFs if their turnover or gross receipts in the preceding financial year exceeded ₹1 crore (business) or ₹50 lakh (profession). In such cases, they must deduct TDS on specified payments in the following year. For companies, firms, LLPs, and others, TDS liability applies irrespective of turnover.

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