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)
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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)
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25 December 2025 A. No.
B. Yes.

Rishita Nahar

Rishita Nahar (Querist)
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25 December 2025 So what's the rationale behind it?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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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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