Some Provisions of TDS

Tax to be deducted at source, commonly referred to as ‘TDS’ is a mechanism of Govt. to collect the tax of a person in advance. TDS is an amount which is required to be deducted from the payment to be given to another person and the same is required to be deposited with the income tax on that person’s behalf.The highlights of the applicability of TDS provisions are as below:

  • Payment in the Nature of Salary – Section 192 – Tax is required to be deducted at source (TDS) when payment for salary / estimated salary exceeds the maximum amount chargeable to tax in case of individual during the relevant financial year.
  • Payment of interest – Section 194A – Where the amount of such aggregate interest paid or likely to be paid during the financial year exceeds Rs. 5000/-.
  • Payment of Contractors – Section 194C – Where the payment made or likely to be made to a resident contractor exceeds Rs. 30,000/- in a single payment or Rs. 1,00,000/- in the aggregate during a financial year.
  • Payment in the nature of Brokerage / Commission – Section 194H – Where payment of any income by way of commission or brokerage exceeds Rs. 15000/- in a financial year.
  • Payment of Rent – Section 194I – Where the payment of rent exceeds Rs. 1,80,000/- per financial year.
  • Payment for professional or technical services – Section 194J – Where the payment is made in the nature of fees for professional services or fees for technical services of an amount exceeding Rs. 30,000/- in a financial year.
  • Payment to Non Residents Section 195 – Subjective

NOTE: It is to be noted that the above provisions of TDS are applicable to all the forms of organization being Proprietorship, Partnership, LLP, HUF, Pvt Ltd Co, Public Ltd Co., AOP, BOI etc.

However, Sections 194A, 194C, 194I, 194H, 194J are applicable for Individual, HUF, AOP and BOI only if they are liable to audit of accounts under clause (a) or clause (b) of Section 44AB during the financial year immediately preceding the financial year in which such amount is being paid.