Basic details of tds

TDS 1637 views 4 replies

Simran

Student

1165 Points Joined December 2012

Hello Friends… Today I want to discuss something about TDS. We all may have a lot of questions regarding TDS, TDS certificates and its related issues. Through this article I have tried my best to describe some important points on TDS. Hope you all find this article helpful. Thank you

TDS

TDS or Tax Deducted at Source is one of the modes of collecting income tax from the assessees in India.

In simple terms, TDS is the amount of tax getting deducted from the person (Employee/Deductee) by the person paying (Employer/Deductor).

Deductor

Deductor is a person/company who is liable to deduct the tax at source, from the payment being made to the party. Deductor is also termed as Employer in cases where the payments are under Salaries.

Deductee

Deductee is the person, from whom the tax is being deducted or accrued for deduction.

Depending on the nature of the deduction being made, deductees and respective submission forms are categorized to 3 types:

1. Salaries: In case of salaries, the deductee is termed as an Employee. All the information of deductions and payments in this category should be submitted in Form 24Q to the government.

2. Non-Salaries - Resident: In case of non-salaries and the payment is made to a resident in India, the deductee is termed as a Deductee or a Party. All the information of deductions and payments in this category should be submitted in Form 26Q to the government.

3. Non-Salaries – Nonresident: In case of non-salaries and the payment is made to a non-resident of India, the deductee is termed as a Deductee or a Party. All the information of deductions and payments in this category should be submitted in Form 27Q to the government....

TDS Certificates

A tax deductor is also required to issue TDS certificate to the deductee within specified timed under section 203 of the I T Act. The con from the deductor, for the deduction and payment of the respective TDS amount to the bank, issued to the deductee is a TDS certificate.

The deductee should produce the details of this certificate, during the regular assessment of income tax, to adjust the amount of TDS against the Tax payable by the Deductee [assessee].

Types of TDS certificates

Salaries — Form 16: In case of Salaries, the certificate should be issued in FORM 16 containing the Tax computation details and the Tax deducted & Paid details. This refers to the details submitted over Form 24Q.

Non-salaries — Form 16A: In case of Non-Salaries, the certificate should be issued in FORM 16A containing the Tax deducted & Paid details. Separate certificates should be prepared for each Section [nature of payment]. This refers to the details submitted over Form 26Q and 27Q.

Replies (4)

CA Gaurav Ajit Potdar

Chartered Accountant

846 Points Joined June 2010

Nice Keep Sharing....

Simran

Student

1165 Points Joined December 2012

thank u Gaurav

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3469 Points Joined June 2011

Simran

Good work.

A couple of questions :

1) What course of action is available to the deductee/payee if the payer/deductor has deducted tax at source but is not issuing the certificate in Form 16A and also not filing TDS return such that it gets reflected in Form 26AS of the deductee.

2) Where to file form 13 for lower deduction TDS rate certificate by the payee under section 197 of the IT Act 1961 : to AO where ITR is filed or AO of TDS ward where quarterly TDS returns are filed.

Regards,

Simran

Student

1165 Points Joined December 2012

In a case where a particular Deductor deducts and if he either does not pay or if he fails to file the TDS return with full details in time, the assessee, from whom the tax is deducted, will not get credit for the tax deducted from him because this particular deduction will not find a place in the Form 26AS. Then intimations are sent demanding the tax (already deducted) with interest. In such a situation top priority is to be given by the concerned officers for the returns filed manually and by the CPC for the e-filed returns to dispose of the rectification petitions filed with a copy of the certificate issued by the Deductor In these circumstances whether the assessee has to file the stay petition for collection of taxes, for the intimations processed at CPC, with the jurisdictional assessing officer or the CPC is not clear. Further the rectification petition and the stay petition are to be sent by ordinary post only since registered post are not accepted by CPC and this procedure will result in unnecessary litigation at a later date regarding levy of penalty and interest for non-payment of taxes and non-acceptance of appeals due to belated filing as there will not be any proof for filing these petitions.

Ultimately, where tax has been deducted and the certificate has been issued, the credit should be given to the assessee from whom tax has been deducted basing on the certificate issued by him even if the transaction does not find a place in From No. 26AS and appropriate action should be taken against the ‘Deductor’ who has either not paid the deducted tax correctly or not filed the TDS return correctly after due verification of the TDS certificate for its genuineness.