- What is TDS?
TDS means ‘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.
- Is TDS relevant for me as a businessman?
Yes. Payments may be made to you after TDS. You can adjust this against your final income tax liability. You are also required to deduct TDS while making business payments. Failure to do so will result in the entire of expenditure being disallowed as your business expenditure and taxed as income.
- I have made some deposits with a bank on which annual interest is around 15000, my income is below taxable limit, the banker wants to deduct TDS, What will I do?
You can file a self-declaration to the banker in Form 15H stating that your income is below taxable limit. The form is available with your banker, the local Income Tax office and can be downloaded from the website www.incometaxindia.gov.in this form should be filed before the interest begins to accrue in the fixed deposit account, since the declaration has no retrospective effect.
- I have let out property for 20,000 per month, the tenant is deducting tax that is more than my tax liability, and what can I do under this circumstance?
If you compute your tax liability and find it to be lower than the tax being deducted, you may approach your Assessing Officer by filing Form 13. He will issue a certificate directing the tenant to make TDS at a lesser rate. You can approach a practicing Chartered Accountant for assistance.
- I have deducted tds for payments but used the same for some urgent financial needs. What are the consequences?
It is an offence to misuse Tax Deducted at Source. It should have been remitted to government account within the specified time limit. Failure to deposit TDS attracts levy, interest, penalty and also rigorous imprisonment up to seven years.
- If the employer does not deduct tax and the employee does not pay his due tax, who will be held liable for the tax payment?
The ultimate responsibility to pay tax rests on the person who has earned income. If the employee deposits such tax then the employer will be liable for interest and penalty for failure to deduct tax.
- I am buying a property from a person residing in USA. Should I deduct tax while making payment?
Yes, u/s 195. In case you have any doubt regarding the amount on which TDS is to be made, you may file an application with the officer handling non-resident taxation who will pass an order determining the TDS to be made. Alternatively, if the recipient feels that the TDS is more he may file an application with his Assessing Officer for non-deduction or lower deduction.
- Can I use PAN to pay the TDS deducted into government account?
No. You are required to have a separate Tax Deduction Account Number (TAN) by making an application in Form 49B with the TIN facilitation center of NSDL.
- Is Income Tax Act applicable only to residents?
No, Income Tax Act applies to all persons who earn income in India, whether they are resident or non-resident.
- Who is a resident?
If an individual stays in India for 182 days or more in a year, he / she is treated as resident in that year regardless of his citizenship. If the stay is less than 182 days, he /she is a non-resident.(Refer Section 6 of the Income Tax Act 1961)
- How can I know whether a company is resident or non-resident?
A company is considered as resident if it is incorporated under the Indian Companies Act. A foreign company can also become a ‘resident’ if the control and management of its affairs is done entirely in India during the previous year.
- How is resident / non-resident status relevant for levy of income tax?
In case of resident individuals and companies, their global income is taxable in India. However, non-residents have to pay tax only on the income earned in India or from a source / activity in India.
- What are the due dates for filling of TDS/TCS statement and Challan Deposit?
The due dates for filing statements and Challan Payment for different forms (24Q, 26Q, 27Q & 27EQ) are as per the below table:
Due dates of filing Quarterly TDS (24Q, 26Q, 27Q) Statements from F.Y 2019-20 onwards for Government & Non Government Deductors:
| Quarter | Period | Due dates |
| Q1 | 1 April-30 June | 31st July 2019 |
| Q2 | 1 July-30 Sep | 31st Oct 2019 |
| Q3 | 1 Oct-31 Dec | 31st Jan 2020 |
| Q4 | 1 Jan-31 March | 31st May 2020 |
Due Dates of Filing Quarterly Statement of TCS (27EQ) For Government & Non Government Deductors:
| Quarter | Period | Due dates |
| Q1 | 1 April-30 June | 15th July 2019 |
| Q2 | 1 July-30 Sep | 15th Oct 2019 |
| Q3 | 1 Oct-31 Dec | 15th Jan 2020 |
| Q4 | 1 Jan-31 March | 15th May 2020 |
Due Dates for TDS & TCS Challan deposit are as below:
| Period | Government Deductor | Non-Government Deductor |
| Tax Deducted from April 2020 to February 2021 | Tax Deposit through Challan-7th of Next Month | 7th of next month |
| Tax Deducted in March from 1st to 31st March 2021 | Tax Deposit through Challan-7th of Next Month | For TDS: 30th April 2021
For TCS: 7th April 2021 |
- I have different branches for my company; can I file single TDS/TCS statement for every branch?
NO, each branch/division of an entity will have separate TAN if it is filing separate TDS/TCS statement. However, there will be only One PAN for legal entity.
- What will be the consequences, if I do NOT file TDS/TCS statement within due date?
There will be a levy of INR 200.00 per day under section 234E of the Income Tax Act, 1961 from the due date till the date when statement is filed.
– Contributed by Sachin Shetty