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TDS – Tax Deducted at Source TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. Payments on which TDS needs to be deducted –
- Section 192 – Payment of Salaries
- Section 193 – Payment of Interest on Securities
- Section 194A – Payment of interest other than Interest on Securities
- Section 194B – Winning from Lotteries, crossword puzzle or card game or game of any sort
- Section 194BB – Winning from Horse race (including Jackpot)
- Section 194C – Payment to Contractor and Sub – Contractor
- Section 194D – Payment for Insurance Commission
- Section 194E – Payment to Non-Resident sportsman (who is not an Indian citizen or a non resident sports association or institution.
- Section 194G – Payment for Commission on Sale of Lottery Tickets
- Section 194H – Payment for Commission or Brokerage (To Agent)
- Section 194I – Payment for Rent
- Section 194J – Fees for Professional or Technical or Services or Compete Fees
- Section 194LA – Payment of Compensation or acquisition of certain immovable property ( including enhanced compensation)
Now, after knowing the payments on which TDS needs to be deducted, it is also necessary to get an idea that who are liable to deduct TDS on such payments. And it is mentioned here as under – Persons liable to deduct tax at source –
|
Section |
Nature of Payment |
Person Responsible for Deduction of Tax |
| 192 | Salaries | The employer himself |
| 194BB | Winning from Horse race (including Jackpot) | The bookmaker or the person to whom the license has been granted by the government for horse racing etc., making such payment |
| 194C | Payment to Contractor and Sub-Contractor |        i.           Government     ii.           Legal Authority    iii.           Corporation established under Central, State or Provincial Act    iv.           Company      v.           Any society registered under Societies Registration Act    vi.           Any trust  vii.           Any university
   ix.           Any individual or HUF or AOP or BOI, whether incorporated or not, who is liable to get the accounts audited u/s 44AB in the immediately preceding year      x.           Any Govt. of a foreign state or a foreign enterprise or any association or body established outside India. |
| 194B | Winning from Lotteries, crossword puzzle or card game | Any person responsible for making such payment |
| 194D | Insurance Commission | Any person responsible for making such payment |
| 194E | Payment to Non-Resident sportsman | Any person responsible for making such payment |
| 194G | Commission on Sale of Lottery Tickets | Any person responsible for making such payment |
| 194LA | Compensation or acquisition of certain immovable property | Any person responsible for making such payment |
| 194A | Interest other than Interest on Securities | Any person responsible for paying interest on securities other than individual or HUF. However, any individual or HUF who is liable to get the accounts audited u/s 44AB in the immediately preceding year will have to deduct tax at source. In case of individual there will be no obligation to deduct tax at source where payments are exclusively for personal purposes. |
| 194H | Commission or Brokerage | Same as 194A |
| 194I | Rent | Same as 194A |
| 194J | Fees for Professional or Technical or Services or Compete Fees | Same as 194A |
When to deduct tax at source?
- For Section 192, 194B, 194BB, 194LA –Tax is to be deducted at the time of payment.
- For Section 193, 194A, 194C, 194D, 194E, 194G, 194H, 194I, 194J, 195 – At the time of credit or payment whichever is earlier.
No deduction of tax shall be made by any person from any sums payable to –
- The government, or
- The Reserve Bank of India
- A corporation established under a central act, which is exempt from Income-tax
- A mutual fund specified under Section 10(23D)
- New Pension Trust System