Example of TDS

What is Tax Deducted at Source (TDS)?

TDS is the amount of tax collected from the taxpayer by the employer or other deductor and deposited to the Income Tax Department on behalf of the taxpayer. It is an approach by which governments, particularly in India, collect income tax at the point of receipt. When certain payments are made, the payer withholds a portion of the payment and sends it as advance income tax to the government. The net amount after TDS is deducted is sent to the recipient of the payment. The efficient collection of income tax is made possible by this mechanism. TDS stands for ‘Tax Deducted at Source’....

Example of TDS

Assume that a start-up company pays ₹50,000 as rent every month to whoever owns the property. The TDS applicable to the amount is 10%, so the company must subtract ₹5,000 and pay ₹45,000 to the property owner. In this case, the owner of the property will receive ₹45,000 following TDS. The owner can add the gross amount of ₹50,000 to his income, thereby allowing him/her to take credit for the ₹5,000 that has already been deducted by the company....

Types of TDS

It has various categories under which TDS is deducted. It is totally based on the kind of transaction or income. Some of them are as follows:...

Why is TDS deducted?

TDS is deducted to guarantee the effective and fair collection of income tax, decrease tax evasion, make tax compliance easier, and give the government a consistent source of revenue. Some of the reasons are as follows:...

What is TDS Certificate?

TDS certificate is an official document that is issued by the person or an organisation in charge of holding Tax Deducted at Source (TDS) from the payee. It gives crucial information about the tax that was deducted as well as serving as evidence of the TDS deduction. There are types of TDS certificates – Form 16 and Form 16A....

Payment Due Dates

Quarter Period Due Date Quarter 1 1st April to 30th June 31st July 2023 Quarter 2 1st July to 30th September 31st October 2023 Quarter 3 1st October to 31st September 31st January 2024 Quarter 4 1st January to 31st March 31st May 2024...

Procedure For E-Filing Of TDS Return

The procedure for e-filling of TDS return is as follows:...

Advantages of TDS

1. Simplified Tax Compliance: When a percentage of a taxpayer’s income is deducted at source, particularly an individual taxpayer, they find it simpler to comply with tax responsibilities....

Disadvantages of TDS

1. Refund Delays: Taxpayers with excessive TDS deductions would have to wait for a government tax refund. This may cause them problems with their finances by tying up their money....