We are all well aware of the Threshold provisions in various sections related to TDS deduction. And, yeah, we know very well, when the payment exceeds this threshold limits, TDS must be deducted by the Tax Deductor. But, one crucial doubt, most of us may have, whether TDS is to be deducted on amount which exceeds the limit or the entrie amount paid during the FY.
Tax Deductor should deduct TDS only on the transaction in which amount exceeds the threshold limits and not the entire amount. Say, if a deductor pays Rs.7,500 + (Service Tax / GST ) permonth for professional services procured, then he need not to deduct TDS on first four months, from the fifth month onwards he can deduct 750/-.
or in otherwords, if a single bill for Professional services comes to 28000/- and the next bill comes with 5,000/- TDS must be deducted on Rs.5000/-
Hence, it is understood, TDS must be deducted on the entire Transaction amount(Ex-Tax amount) where such threshold limit exceeds for the whole FY
It is a better practice to show all of the expenses, where TDS proviosions applicable, in the quarterly returns respect to the fact TDS been deducted or not deducted along with appropriate Remarks code for any non Tax deductions. Deductor has to be familiarised to use the Remarks Codes given there in the return utility.
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