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1. What do you mean by TDS?

TDS stands for Tax Deducted at Source. TDS is a kind of tax that is deducted by the payer before making certain payments like Salary, Rent, Commission, Interest, Royalty, Professional Fees etc. to the payee.

TDS is required to be deducted at the source if the money to be paid and the money already paid exceeds a specified amount.

The Payee can claim this tax deducted by the payer while paying his income tax liability for the year, and if the TDS deducted is more than the income tax liability of the assessee then he/ she will be entitled to a refund.

The main purpose of introduction of TDS was to reduce the Tax evasion by the person receiving the income.

Note: –

Payer- A payer is a person or organization who is responsible for deducting TDS before paying the amount to Payee.

Payee- A Payee is a person or organization who receives the payment from the payee after the TDS deduction.

2. What is TDS under Section 192A of Income Tax Act?

Section 192A of Income Tax Act, 1961 specifies the TDS on early/ premature withdrawal of EPF. The Employee Provident Fund Scheme, 1952 has to deduct TDS before making EPF payments to the employees.

3. What do you mean by EPF?

EPF stand for Employees Provident Fund, it is a retirement benefit scheme that provides financial security for the employees.

Both the employer and employees contribute 12% each of the employee’s basic salary & dearness allowance.

 Employee’s can partially withdrawal this amount for specific reasons like higher education, marriage, illness etc.

The interest earned on the EPF is tax free, the current rate of interest rate is 8.15% p.a.

Employees receive a lump sump amount upon retirement, which includes the accrued interest. In the event of death of the employer his/ her dependent/ dependents are entitled to the benefits.

4. When is TDS deducted under Section 192A?

Normally the TDS is to be deducted at the time of payment or at the time of crediting the party in the books of accounts whichever is earlier, but in case of TDS u/s 192 the TDS must be deducted at the time of payment only.

Few examples of date of deduction are: –

5. Who is required to deducts TDS under Section 192A?

The Trustee of the Employee’s Provident Fund Scheme 1952, who may be the employer or any other person permitted by the scheme to pay the employee the accrued EPF amount, are required to deduct & deposit TDS.

6. Rate of TDS under Section 192A?

Under Section 192A of the Income Tax Act, 1961, the entrusted entity is required to deduct TDS @ 10% if the amount withdrawn is more than Rs. 50,000. However, if someone fails to prove his/ her PAN, the then TDS rate will be MMR i.e. 34.608% instead of 10%.

Example: –

Mr. Mayank retires from an entity within 5 years of joining and withdrawal his EPF balance of Rs. 2,50,000 then the TDS liability will be 10% of Rs. 2,50,000 i.e. 25,000 which is to be deposited on or before 7^th of next month.

7. Exemptions under Section 192A?

The following are the circumstances where TDS under Section 192A will not be deducted while withdrawing TDS.

• The total EPF withdrawal amount is less than Rs. 50,000.
• The EPF withdrawal is made after a continuous period of 5 years.
• When the employee has submitted Form 15G or 15H in addition to his/ her PAN.
• In the event of Job change, where PF is transferred from one account to another.
• In case of termination of employment because of project completion or termination of employment because of discontinuation of employer’s venture.
• In case of termination of employment due to ill health.

8. Time limit for deposit of TDS under Section 192A?

The due date for deposit of TDS is as below: –

9. What is the due date for filing of TDS return under Section 192A?

TDS is to be deposited monthly on the dates mentioned above but the return is to be filed quarterly on or before the below mentioned dates: –

10. Type of TDS return & form to be issued?

TDS under this section has to filed quarterly through FORM 26Q and the deductor has to issue FORM 16A to the employee after filing of return.

11. Fees/ Penalties for Late/ Non- Filing of TDS u/s 192A?

Following penalties/fees will be levied if there is delay in TDS deduction or delay in deposit of TDS or non-filing of quarterly return.

1. What do you mean by TDS?

TDS stands for Tax Deducted at Source. TDS is a kind of tax that is deducted by the payer before making certain payments like Salary, Rent, Commission, Interest, Royalty, Professional Fees etc. to the payee.

TDS is required to be deducted at the source if the money to be paid and the money already paid exceeds a specified amount.

The Payee can claim this tax deducted by the payer while paying his income tax liability for the year, and if the TDS deducted is more than the income tax liability of the assessee then he/ she will be entitled to a refund.

The main purpose of introduction of TDS was to reduce the Tax evasion by the person receiving the income.

Note: –

Payer- A payer is a person or organization who is responsible for deducting TDS before paying the amount to Payee.

Payee- A Payee is a person or organization who receives the payment from the payee after the TDS deduction.

  2. What is TDS under Section 192 of Income Tax Act?

Section 192 of the Income Tax Act, 1961 specifies that every responsible for paying any income which is chargeable under the head Income from “Salaries”, shall be liable to deduct TDS u/s 192.

Rate of tax is to be calculated as per the slab rates applicable to a person and TDS is to be deducted at the time of payment only.

3. Who is required to deduct TDS under Section 192?

TDS under Section 192 is required to deducted by every person responsible for making salary payments at the rate as per their respective slab rates.

Following are the various categories of person who is responsible for TDS deduction U/S 192.

4. When is TDS Deducted under Section 192?

Normally the TDS is to be deducted at the time of payment or at the time of crediting the party in the books of accounts but in case of TDS u/s 192 the TDS must be deducted at the time of payment only.

Few examples of date of deduction are: –

NOTE: –

In case the payee estimated salary is less than the basic exemption limit then there is no need to deduct TDS under this section.

Below is the Basic exemption limit under old and new scheme.

5. Rate of TDS under section 192?

There is no specific rate of deduction under section 192, the rate is based on the slab rate applicable to the person. The current slab rates are as follows: –

Slab rate under New Scheme (F.Y 2024-25)

NOTE: –

Tax rebate upto Rs. 25,000 is applicable if the total income does not exceed Rs. 7,00,000. This rebate is not applicable for non-residents.

Slab rate under Old Scheme. (F.Y 2024-25)

Residents aged below 60 years.

Residents above 60 years below 80 years.

Residents above 80 years.

Example (Calculation of monthly rate).

Suppose Mr. Rahul is aged 35 years and earning a salary of Rs. 10 lakhs per year and has        deposited Rs. 50,000 in tax saver FDR, 50,000 in NPS and 1,00,000 in ELSS.

Tax at 10,00,000 under old scheme

  Average Tax to be deducted monthly = 65,000/12 = 5417(approx.)

6. Time limit for deposit of TDS?

The due date for deposit of TDS is as below: –

7. What is the due date for filing of TDS return under Section 192?

TDS is to be deposited monthly on the dates mentioned above but the return is to be filed quarterly on or before the below mentioned dates: –

8. Type of TDS return & form to be issued?

TDS under this section has to filed quarterly through FORM 24Q and the employer has to issue FORM 16 to the employee after filing of return.

9. Fees/ Penalties for Late/ Non- Filing of TDS u/s 192?

Following penalties/fees will be levied if there is delay in TDS deduction or delay in deposit of TDS or non-filing of quarterly return.

1. What do you mean by TDS?

TDS stands for Tax Deducted at Source. TDS is a kind of tax that is deducted by the payer before making certain payments like Salary, Rent, Commission, Interest, Royalty, Professional Fees etc. to the payee.

TDS is required to be deducted at the source if the money to be paid and the money already paid exceeds a specified amount.

The Payee can claim this tax deducted by the payer while paying his income tax liability for the year, and if the TDS deducted is more than the income tax liability of the assessee then he/ she will be entitled to a refund.

The main purpose of introduction of TDS was to reduce the Tax evasion by the person receiving the income.

Note: –

Payer- A payer is a person or organization who is responsible for deducting TDS before paying the amount to Payee.

Payee- A Payee is a person or organization who receives the payment from the payee after the TDS deduction.

2. When to deduct TDS?

TDS requirement arises:

• At the time of payment.

            Or

• At the time of crediting the account of payee, whichever is earlier.

    But in the following cases TDS is deducted only at the time of payments.

• Salary- Section 192.
• Employer Provident Fund (EPF) payment- Section 192A.
• Payment of Dividends- Section 194.
• Winnings from lotteries, crosswords, puzzles etc.- Section 194B.
• Winnings from Horse Races- Section 194BB.
• Winnings from Online Games- Section 194BA (at the time of withdrawal).
• Maturity proceeds of life insurance policy- Section 194DA.
• Compensation on compulsory acquisition of property- Section 194LA.
• Cash withdraw from bank, Co. op. banks, Post Office- Section 194N.
• Types of TDS and different rates?

There are more than 20 sections of TDS below are few examples of commonly used TDS rates: –

All TDS rates are fixed rates i.e. 1%, 2%, 5%, 10% etc. but if payment is made to Non-Resident/ Foreign Company or payment of salary the surcharge & HEC (Health & Education Cess) shall be considered.

3. Due dates to deposit TDS?

The due date to deposit TDS is as Follows: –

4. What are the due dates of filing of TDS returns?

TDS is to be deposited monthly on the dates mentioned above but the return is to be filed quarterly on or before the below mentioned dates; –

5. What happens if TDS is not deducted or deducted but not deposited on or before due date?

Following penalties will be levied if there is delay in TDS deduction or delay in deposit of TDS.

6. Different types of TDS returns?

Following are the TDS returns that are used for different purposes.

7. What happens if Payee does not furnish his/ her PAN?

If payee does not furnish his/ her PAN to the payer, then the TDS rate shall be: –

• Rate as per respective section, OR
• Rate @ 20%

Whichever is higher.

For Section 194O/ 194Q rate is 5% instead of 20%.

Note: –

This section does not apply to Non- Resident or Foreign company not having PAN in respect of payment in the nature of interest, dividend, royalty, fees for technical services and payment of capital assets, if payee furnished the following details and documents to the payer: –

• Name, E-mail & Contact Number.
• Address in the country outside of INDIA of which payee is a resident.
• Certificate of his being resident of foreign country from government of that country.
• Tax identification number of payee in the foreign country, in case no such number is available then a unique number on the basis of which the payee is identified in foreign.

INCOME TAX REGISTRATION

Each and every person who is holding a valid and active PAN (Permanent Account Number), (Pan is a 10-digit alphanumeric number issued by the department of income tax it consists of both numbers and alphabet).

Since, each & every person holding valid and active PAN is required to register on the Income Tax Portal the next question arises do every person holding PAN is required to file ITR? NO, every person holding PAN is not required to file return, following are the Person required to file ITR: –

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         WHO IS A PERSON AS PER THE INCOME TAX ACT, 1961

          Following are the categories of persons defined under the Income Tax Act

         CATEGORIES OF ASSESSEE

         There can be four categories of assessee: –

ITR-7

Note:

The person whose income is unconditionally exempt under various clauses of section 10,    and who are not mandatorily required to file ITR under section 139, may use ITR-7 for filing their return.

       NOTE:

      Since ITR’s are annexure less forms the above-mentioned documents are not to be             attached with the ITR Form. However, one needs to keep these documents as it can be demanded by the tax authorities during assessment, inquires.

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ITR-6

       NOTE:

      Since ITR’s are annexure less forms the above-mentioned documents are not to be             attached with the ITR Form. However, one needs to keep these documents as it can be demanded by the tax authorities during assessment, inquires.

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ITR-5

NOTE:

Partnership firm opting for presumptive taxation scheme under the Income Tax Act cannot file ITR-5.

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       NOTE:

      Since ITR’s are annexure less forms the above-mentioned documents are not to be             attached with the ITR Form. However, one needs to keep these documents as it can be demanded by the tax authorities during assessment, inquires.

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ITR-4

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       NOTE:

      The turnover limit for 44ad & 44ada is Rs. 3 crore and Rs. 75 lakhs respectively and the limit for 44ae is up to 10 vehicles.

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       NOTE:

      Since ITR’s are annexure less forms the above-mentioned documents are not to be             attached with the ITR Form. However, one needs to keep these documents as it can be demanded by the tax authorities during assessment, inquires.

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ITR-3

      NOTE:

      Since ITR’s are annexure less forms the above-mentioned documents are not to be attached with the ITR Form. However, one needs to keep these documents as it can be demanded by the tax authorities during assessment, inquires.

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