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TAX DEDUCT AT SOURCE

TDS or best known as Tax Deducted at Source of collectingincome tax from assesses inIndia.

This is governed under Indian Income Tax Act, 1961, by theCentral Board for Direct

Taxes (CBDT) and is part of the Department of Revenue managed byIndian Revenue Service

(IRS),Ministry of Finance,Govt. of India.

In simple terms, TDS is amount of tax getting deducted from the person (employee/deductee's)

salary/income by the person (employer/deductor) paying salary/payments. National Securities

Depository Ltd. (NSDL) after having modernized the settlement system in the IndianCapital

Marketby pioneering scripless settlement is now in the process of establishing a nationwide Tax

Information Network (TIN) on behalf of the Income Tax Department (ITD). This is designed to

make the tax administration more effective, furnishing of returns convenient, reduce compliance

cost and bring greater transparency.

A.SCHEME OF TAX DEDUCTION AT SOURCEUnder Section 152, the scheme of tax deduct at source, persons responsible for making payment

of income, covered by the scheme, are responsible to deduct tax at source and deposit the same

to the Governments treasury within the stipulated time. The recipient of income though he gets

only the net amount (after deduction of tax at source) is liable to tax on the gross amount and the

amount deducted at source is adjusted against his final tax liability.

http://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Central_Board_for_Direct_Taxeshttp://en.wikipedia.org/wiki/Central_Board_for_Direct_Taxeshttp://en.wikipedia.org/wiki/Indian_Revenue_Service_(IRS)http://en.wikipedia.org/wiki/Indian_Revenue_Service_(IRS)http://en.wikipedia.org/wiki/Ministry_of_Financehttp://en.wikipedia.org/wiki/Govt._of_Indiahttp://en.wikipedia.org/wiki/Capital_Markethttp://en.wikipedia.org/wiki/Capital_Markethttp://en.wikipedia.org/wiki/Capital_Markethttp://en.wikipedia.org/wiki/Capital_Markethttp://en.wikipedia.org/wiki/Govt._of_Indiahttp://en.wikipedia.org/wiki/Ministry_of_Financehttp://en.wikipedia.org/wiki/Indian_Revenue_Service_(IRS)http://en.wikipedia.org/wiki/Indian_Revenue_Service_(IRS)http://en.wikipedia.org/wiki/Central_Board_for_Direct_Taxeshttp://en.wikipedia.org/wiki/Central_Board_for_Direct_Taxeshttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Income_tax

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B.RATES FOR TAX DEDUCTION AT SOURCETax is deductible at source at the rates given in table. If PAN of the deductee is not intimated to

the deductor, tax will be deducted at source either at the rate given in table or at the rate of 20

percent, whichever is higher. Further, under section 94A(5), if payment or credit is made or

given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate

given in the table or at the rate 30 percent, whichever is higher. TDS rates for the financial year

2013-2014 are as follows-

When recipient is resident

Nature of payment TDS (SC:Nil,EC:Nil,SHEC: Nil)

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Sec. 192Payment of Salary (normal tax rates areapplicable SC: 10% (If net income exceeds Rs.

1crore), EC: 2% and SHEC: 3%

Sec. 193Interest on Securitiesa. interest on (a) debentures/ securities for money

issued by or behalf of any local authority/statutory

corporation, (b) listed debentures of a company, (c)

any security of the Central or State Government

b. any other interest on securities (including interest

on non-listed debentures)

Sec. 194Dividenda. deemed dividend under section 2(22)(e)

b. any other dividend

Sec. 194A- Interest other than interest on securities Sec.194B- Winnings from lottery or crossword

puzzle or card game or other game of any sort

Sec. 194BB- Winning from horse races Sec.194C- Payment or credit to a resident

contractor/sub contractor

a. payment/credit to an individual or a Hindu

undivided family

b. payment/credit to any person other than an

individual or a Hindu undivided family

Sec.194D- Insurance Commission Sec.194EE- Payment in respect of deposits under

National Savings Scheme, 1987 Sec.194F- Payment on account of repurchase of

units of MF or UTI

Sec.194G- Commission on sale of lottery tickets Sec.194H- Commission or brokerage

-

10

10

10

Nil

10

30

30

1

2

10

20

20

20

10

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Sec.194I- Rent-a. rent of plant and machinery

b. rent of land or building or furniture or fitting

Sec.194IA- Payment/credit of consideration to aresident transferor for transfer of any immovable

property (other than rural agriculture land)

(applicable from June1,2013)

Sec.194J- Professional fees, technical fees, royaltyor remuneration to a director

Sec.194LA- Payment of compensation onacquisition of certain immovable property

2

10

1

10

10