Tax Deducted at Source (TDS) in Tally Prime
· TDS – Tax deducted at source is one of the modes of collecting income-tax from the assessees. Such collecting of tax is affected at the source when a specified Payment or income arises or accrues.
TDS is applicable according to the provisions of the Income tax Act of 1961. The “Central Board for Direct Taxes (CBDT) is responsible for managing it. TDS is applicable on specified payment such as Salary, Commission, Brokerage, Royalty Payments, Interest earned on several financial Investments, Earning from lotteries, rent Income etc.
TAN (Tax Deduction and Collection Account Number) is needed to be obtained by those persons who are responsible for deducting and collecting TDS, It is 10 digit formats like
“DELA012457G”. In TAN Number formats first 3 Characters are City’s name of TDS Deductor and 4 characters is First letters of Name of Deductor.
Note: In TDS, Person who deduct/ Cut TDS of assessees is called ‘Deductor’ and Persons whom
TDS deducted by any Deductor is called ‘Deductee’.
· TDS is applicable on Specified payments and Rates which is given in following tables with its sections defined by Indian government:
TDS rates Charts Applicable from 14/05/2020 To 31/03/2021
Under Section
Payment code
Nature of Payments
Threshold limit
Rates for Residents
Rates for Non-
Residents
192
92A & 92B
Salaries
Normal
Slab rate
Normal Slab
rate
Normal
Slab rate
193
193
Interest on securities
10000
7.5%
10%
194
194
Dividends
5000
7.5%
10%
194B
94B
Winning from lotteries &
Crossword puzzles
10000
30%
30%
194BB
4BB
Winning from Horse race
10000
30%
30%
194C
94C
Contractor-Single transaction
30000
0.75%
(Individual/HUF)
1.5% (Others)
No
194C
94C
Contractor – Consolidated Payment During the F.Y.
100000
0.75%
(Individual/HUF)
1.5% (Others)
No
194D
94D
Insurance commission
15000
10% (Company)
3.75% (Others)
No
194H
94H
Commission/Brokerage
15000
3.5%
No
194J
94J
Professional Fees
30000
7.5%
No
TDS rates Charts Applicable from 14/05/2020 To 31/03/2021
Under Section
Payment code
Nature of Payments
Threshold limit
Rates for Residents
Rates for
Non- Residents
194J
94J
Technical Fee
30000
1.5%
No
194IB
4IB
Rent by Individual/HUF
50000/
month
3.5%
No
194I
94I
Rent
240000
1.5 % (Plant/Machinery
/Equipment)
No
194I
94I
Rent
240000
7.5 % (Land and Building/Furniture
& Fixture)
No
195
94J
Fees for technical
services
No
10%
No
· TDS Returns – A TDS Return is a summary of all the transactions related to TDS made during a quarter. TDS Return is a quarterly statement submitted by the Deductor to the Income Tax Department. The statement shows a summary of all the entries for TDS collected by the Deductor and the TDS paid by the Deductor to the Income Tax Authority.
The TDS Return statement includes details like the PAN number of the Deductor & the deductees, all the detailed particulars of the TDS paid to the government and the TDS Challan information.
· Types of TDS Returns which is filed by Deductor
Types of TDS Returns forms
Description about Returns Forms
Form 24Q
Statement for tax deducted at source from
salaries
Form 26Q
Statement for tax deducted at source on all
payments other than salaries.
Form 27Q
Statement for tax deducted at source on all
payments other than salaries for NRI.
· Form 26AS – Form 26AS is a statement that provides details of any amount deducted as TDS or TCS from various sources of income of a taxpayer. This tax deducted is then deposited with the government by the Deductor. It also reflects details of advance tax/self-assessment tax & high- value transactions entered into by the taxpayer.
· Form 15H/15G – Form 15G (Less than 60 Years) and Form 15H (more than equal to 60 Years) are self declaration forms that an individual submits to the bank requesting not to deduct TDS on interest income as their income is below the basic exemption limit. For this, providing PAN is compulsory. Some banks allow you to submit these forms online through the bank’s website.
· Dues Dates for TDS Payments & Return
Collection
Months
Quarter
Quarter Period
Due Dates for
Payment TDS
Due dates for
filing returns
April
1st Quarter
1st April to 30th June
Up to 7th April
Up to 31St July
May
Up to 7th May
June
Up to 7th June
July
2nd Quarter
1st July to 30th September
Up to 7th July
Up to 31St October
August
Up to 7th August
September
Up to 7th September
October
3rd Quarter
1st October to 31st December
Up to 7th October
Up to 31St January
November
Up to 7th November
December
Up to 7th December
January
4th Quarter
1st January to 31st March
Up to 7th January
Up to 31St May
February
Up to 7th February
March
Up to 7th March
Note: In case of PAN is not available of Deductee, Deductor deducts TDS @20% of Deductee.
· TDS Certificate – TDS certificates is a proof document of all about TDS deduction of assessees. This Certificate issued by a person deducting TDS to the Assessee from whose income TDS was deducted while making payment.
Types of TDS Certificate
Certificate type
Description of certificate For
Issue Frequency
Dues Dates
Form 16
TDS On The Payment Of Salary
Yearly
31st May
Form 16 A
TDS On Non-Salary Payments
Quarterly
15 Days From The Due
Date Of Return Filing
Form 16 B
TDS On Sale Of Property
Every
Transaction
15 Days (From Return
Filing Due Date)
Form 16 C
TDS On Rent
Every
Transaction
15 Days (From The Due
Date Of Returns Filing)
· New Income Tax Slab rates for Financial Year 2021-22
Income tax Slab Rates Charts for Individual & HUF below 60 Years
From (₹)
To (₹)
Tax Rates
1
2,50,000
0%
2,50,001
5,00,000
5%
5,00,001
7,50,000
10%
7,50,001
10,00,000
15%
10,00,001
12,50,000
20%
12,50,001
15,00,000
25%
15,00,000
Above
30%
Note 1: In case of Senior citizens (above 60 years up to 80 years) up to 3 lacs & Super senior citizen (Above 80 years) up to 5 lacs are exemption limit in income tax for tax calculation.
Note 2: Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases (Increased from 3% since FY 18-19). CESS is calculated on total amounts of Income tax plus surcharge.
· Surcharge: Surcharge is levied on the amount of income-tax at specified rates if total income of assessees exceeds specified limits. Charts for Individual/HUF/AOP/BOI/ Artificial Judicial Person.
Income tax Limit & Surcharge Rates charts For FY 2021-22
Income from (₹)
Income up to (₹)
Surcharge Rates
50,000,00
1,00,000,00
10%
1,00,000,01
2,00,000,00
15%
2,00,000,01
5,00,000,00
25%
5,00,000,01
Above
37%
Note: Surcharge is calculated on total amount of income tax of assessees.