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Applicability of Tax Deducted at Source

TDS means 'Tax Deducted at Source'. TDS is one of the modes of collection of taxes, by which a certain percentage of amount is 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.

Why TDS ?

TDS is based on the principle of ‘pay as and when you earn’. TDS is a win-win scenario for both the taxpayers and the government.

  •    Responsibility sharing for deductor and tax collection agencies.
  •    Prevents tax evasion.
  •    Widens the tax collection base.
  •    Steady source of revenue for the government.
  •    Easier for a deductee as tax gets automatically collected and deposited to the credit of the central government.
  •    TDS certificate is issued wherever TDS has been collected, typically by the deductor or a bank.
  •    TDS is exempted on some payments made to government, RBI, cooperative societies etc.
  •    Refunds can be requested if there are discrepancies in the collected amount and the actual payable amount.

TDS is applicable for the following :

Individual

Whether Tax audited in Immediately Previous Year?

•  Yes:TDS Applicable
• No:TDS not Applicable in Current Year

Company

TDS Applicable in spite form for liable to Tax Audit or Not

Government-Institution

TDS Applicable in spite form for liable to Tax Audit or Not

Local-Authority

TDS Applicable in spite form for liable to Tax Audit or Not


Trust

TDS Applicable in spite form for liable to Tax Audit or Not

Firm

TDS Applicable in spite form for liable to Tax Audit or Not

Association of Persons (AOP)

TDS Applicable in spite form for liable to Tax Audit or Not

Body of Individuals (BOI)

TDS Applicable in spite form for liable to Tax Audit or Not

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