Tax Deducted at Source

TDS or Tax Deducted at Source is an income tax that is deducted from certain payments like rent, salary, commission, interest, professional fees, etc.

There are different types of sections for different payments and every section has different rates and applicability for instance, the TDS rate for Section 194C in FY 2023-24 is 1% for individuals and HUF (Hindu Undivided Family) and 2% for others. TDS on professional fees is deducted at a rate of 10% under Section 194J of the TDS provisions.

Latest update in Budget 2024:

When and by whom should we deduct TDS?

Any person who makes specified payments mentioned under the Income Tax Act is required to deduct TDS at the time of making such specified payments.?

What is the Due Date for Depositing the TDS to the Government?

TDS deducted in the month of June must be paid to the government by the 7th of July. However, the TDS deducted in the month of March can be deposited till 30th April. For TDS deducted on purchase of property, the TDS payment due date is 30 days from the end of the month in which TDS is deducted.

For Example: Shine Pvt Ltd makes a payment for office rent of Rs 80,000 per month to the owner of the property. TDS is required to be deducted at 10%. Shine Pvt ltd must deduct TDS of Rs 8000 and pay the balance of Rs 72,000 to the owner of the property. Thus, the recipient of income i.e. the owner of the property in the above case receives the net amount of Rs 72,000 after deduction of tax at the source. He will add the gross amount i.e. Rs 80,000 to his income and can take credit of the amount already deducted i.e. Rs 8,000 by shine Pvt ltd against his final tax liability.?