PPT on TDS

1. WHAT IS TDS ?
 Tax Deducted at Source is a mean of
collecting income tax in India, under the
Indian Income Tax Act of 1961. Any payment
covered under these provisions shall be paid
after deducting at prescribed percentage /
rate.
 The government uses TDS as a tool to
collect tax evasion by taxing the income (
partially or wholly) at the time it is generated
rather than at a later date.

2. INCOME FROM SALARY
 TDS is applicable on the various incomes such
as salaries,business/profession, interest
received, Capital Gain, etc
 DEDUCTION OF TAX AT SOURCE FROM
SALARY
 Scope and application of Section 192
 Section 192 provides that any person
responsible for paying any income chargeable

3. Under the head ‘Salaries’ is required to
deduct tax on the amount payable.
What payments are covered by Section 192
- Payment is made generally by the
employer to the employee.
- -Payment is in the nature of ‘salary’.
Payers , who are covered under section
192
The Payer will be the employer, but in
certain exceptional cases, it may be a person

4. the employer who is designated for this
purpose.
- PERSON, CONNOTATION OF – Section
2(31) of the Income Tax Act defines the term
‘person’ to include the folloeing:
 Individual
 Hindu undivided family ( HUF )

5.  Firm
 Company
 Association of Persons (AOP)
 Body of Individuals ( BOI)
 Local authority

6. Payees, who are covered by section 192
Any Individual (known as ‘employee’ in
common parlance) who receives any payment
from his employer or from any other
designated authority on behalf of the employer
which is chargeable under the head ‘Salaries’
is covered by section 192.Pension is also
‘Salary’ , and though it is not received from
‘employed’, pensioners are also covered u/s
192.

7. WHEN TAX IS TO BE DEDUCTED ?
Tax is to be deducted at the time of payment of
salary, i.e., tax is to be deducted at the time of
‘actual payment’ of the salary.
Who is to deduct tax at source in case of ‘ Salary’
Any ‘person’ responsible for paying any income
chargeable under the head ‘Salaries’ is required to
deduct tax from the salary so payable.

8.  Quarterly Deposit of tax
In special cases, the Assessing Officer may,
with the prior approval of the Joint
Commissioner, permit quarterly payment of
the tax deducted as per Table given below :

9.  Sl.No. Qtr of the Date for Qtr
F.Y.ended on payment
1. 30th June 7th July
2. 30th September 7th October
3. 31th December 7th January
4. 31th March 30th April

10.  How to Deposit Tax
(1) Where tax has been deposited
accompanied by an income-tax challan, the
amount of tax so deducted shall be deposited
to the credit of the Central Government by
remitting it within the time specified into any
branch of the Reserve Bank if India or of the
State Bank of India or any authorized bank;

11.  Which challan to be used
The tax deducted at source is required to be
deposited in Challan.281.
Penalty for non- issue of certificate
If an employer fails to issue certificate in Form
No.16, he shall be liable to pay, by way of penalty,
a sum of Rs. 200 for every day during which the
failure continues, subject to a maximum of the
amount of tax deducted at source for which
certificate is required to be issued.

12.  Furnishing of statements by employer to
department
In respect of tax deducted at source , or tax
paid by employer on behalf of employee in
respect of perquisites, every employer is
required to prepare and transmit quarterly
statements in the manner explained below:
 Form of the quarterly statement.

13. QUARTERLY RETURN OF TDS ON SALARY 24Q
The statement must be prepared I Form No.24Q.
The following points must be noted while
preparing the quarterly statements:
 The employer must quote his tax deduction and
collection account number (TAN) in the
statement.
 The employer must quote his permanent
account number (PAN) in the statement except
in the case where the deductor is an office of
the Government.

14. QUARTERLY RETURN OF TDS ON SALARY 24Q
 The Employer must quote the permanent
account number of all deductees.
 The employer must furnish particulars of the
tax paid to the Central Government including
book identification number or challan
identification number , as the case may be.
 Quarterly return cannot be submitted before
deposit of TDS and interest (for late deposit)
u/s 201as well as fees levied u/s 234E.

15. PENALTY FOR NON PROVIDING PAN
 TAN of the deductor should be quoted correctly,
otherwise a penalty of Rs. 1000 can be imposed
by the Assessing Officer.
 A deductee should intimate his PAN to the
deductor. Failure to do so may attract penalty of
Rs. 10000 on deductee.
 If the recipient does not furnish PAN,tax will be
deducted u/s 192A at the max. marginal rate of
tax (i.e.42.744 % F.Y. 2019-20.) and not at the
rate of 20%.

16. 2. DEDUCTION OF TAX AT SOURCE FROM
INTEREST ON SECURITIES
Scope and application of section 193
Section 193 provides that where any
person pays any income by way of interest on
securities to payee, the tax will have to be
deducted at source. Payments to non-
residents will be a subjected to deduction of tax
at source under section 195.

17. SEC 193 : DEDUCTION OF TAX ON SECURITIES.
 What payments are covered by section 193
Payments which fulfil following conditions are
covered by section 193;
 Payment is in the nature of ‘interest on
securities’
 Such interest on securities is not exempt
from tax by virtue of proviso to section 193.

18.  What is ‘Interest on securities’-
The term ‘security’ has reference to written instrument,
and such instruments are usually for the payment of money or
to evidence a debt; they are more than a mere promise of the
debtor to pay liability and have as collateral to such
instruments pledges of property or some additional obligation.
EXEMPT SECURITIES –No tax will be deducted at source
from interest on securities specified below:

19.  Any Interest payable on 4.25 per cent
National Defence Bond,1972, where the
bonds are held by a resident individual.
 Any interest payable to an individual on 4.25
per cent National Defence Loan 1968,or 4.75
per cent National defence Loan 1972.
 Any interest payable on National
Development Bonds.

20. INTEREST ON SECURITIES
 Any Interest payable on 5- year National Saving
Certificate.
 Any interest payable to a resident individual or
resident HUF on any debenture issued by a
company in which the public are substantially
interested, if the following conditions are
satisfied:
 the amount of interest or as the case may be
the aggregate amount of such interest paid or
likely to be paid on such debenture by the
company to

21. Such individual or HUF does not exceed
Rs.5000;
And
 such interest is paid by the company by an
account payee cheque.
 Any interest payable to LIC/GIC/4 companies
formed under GIC Act/ any other insurer in
respect of any securities owned by it or in
which it has beneficial interest.

22. Note the following points:
 The expression ‘owner of the securities’ in
occurring section 199 would include a
beneficial owner name but in the name of a
collecting bank is entitled to apply for the
grant of an abatement or exemption
certificate under section 197(1).
 Where Government securities are registered
in the name of a banking company, tax will
be

23. deducted at source from the interest at the
‘rate in force’ applicable to the banking
company without regard to the status of the
beneficial owner of the securities. The tax
deduction certificate under section 203 will also
be furnished to the banking company.
INTEREST ON 8 PER CENT SAVINGS
(TAXBLE) BONDS-

24. INTEREST ON SECURITIES
Section 193 has been amended to provide
that the person responsible for paying to a
resident any interest on 8 percent Saving
Bonds shall deduct at source.
 GENERAL EXMPTION- The CBDT have
granted exemption from tax deduction/
collection at source on the receipts of
corporarion which are established by a
Central,State or Provincial Act for the welfare
and economic upliftment

25. of ex- servicemen and whose income qualifies
for a period.
WHO IS RESPONSIBLE TO DEDUCT TAX AT
SOURCE
In the case of interest on securities payable
by the Central or a State Government, the
appropriate disbursing officers is the person
responsible for paying interest on securities.

26. In the case of interest on securities payable by
any other person, the person responsible for
paying interest is the local authority,
corporation or company itself including the
principal officer.
When payment is made to Government ,etc
- Where the recipient of payment is any of the
following persons, no tax shall be deducted at
source:

27. NO TAX DEDUCTION FOR FOLLOWING PERSONS
 Central Government
 State Government
 R B I
 U T I
 LIC,GIC and its subsidiaries, and other
insurer,in respect of any securities owned by
them or in which they have full beneficial
interest

28.  Corporation established under Central Acts,
whose income is exempt from tax
 Mutual Funds as specified in section
10(23D).
WHEN TAX TO BE DEDUCTED
Tax has to be deducted either at the time of
payment of interest or at the time of credit of
such income to the account of the payee
,which

29. Is earlier. Any sum credited to Interest
Suspense Account’ will be treated as interest
credited to account of payee.
When no tax need to be deducted or tax may
be deducted at lower rate
The payee has to make an application to the
Assessing Officer in the prescribed form well in
advance.If the Assessing Officer is satisfied
that the existing and estimated tax liability of
the payee

30. Justifies deduction at a lower rate or no
deduction of tax, he shall issue an appropriate
certificate to that effect
 Form of Application – The application by the
payee must be in Form No.13.
 Quoting of Pan Mandatory – No certificate
will be isssued if the application does not
contain the PAN of the Payee.

31. INTEREST ON SECURITIES
 How Lower Rate/ Nil Rate is determined-
The assessing Officer is first required to
determine the existing and estimated liability
after taking into consideration the following:
(1) Tax payable on estimated income of the
previous year relevant to the assessment
year;
(2) Tax payable on the assessed or returned
income, as the case may be, of the last
three

32. TAX DEDUCTION ON INTEREST
Previous years;
(3) Existing liability under the Income-Tax Act
and Wealth – tax Act;
(4) Advance tax payment for the assessment
year relevant to the previous year till the date
of making the application;
(5) Tax collected at source at source for the
assessment year relavant to the previous year
till the date of making the application.

33. INTEREST ON SECURITIES
 Form of quarterly statement
The statement must be prepared in Form
No.26Q.
Points to be noted
 The deductor shall quote his tax deduction
and collection account number (TAN) in the
statement.
 The deductor shall quote the PAN of
Deductees.

34. 3 DEDUCTION OF TAX AT SOURCE FROM
INTEREST OTHER THAN INTEREST ON
SECURITIES
 Scope and effect of section 194A
Under section 194A,any of the specified
person is liable to deduct tax at source if such
person makes payment of income by way of
interest other than interest on securities to any
resident person.

35. INTEREST OTHER THAN ON SECURITIES
 What is interest
Interest means return for the use by one
person of a sum belonging to another person.
Where payment of interest is in kind, tax will be
deducted at source.

36.  ‘Interest’ means interest payable in any
manner in respect of any moneys borrowed
or debt incurred and includes any service fee
or other charge in respect of the moneys
borrowed or debt incurred or in respect of
any credit facility which has not been
utilised.
 Hence, interest includes the following:
 Interest on loan, debt, claim, ect.,

37. NO TDS UPTO RS. 50000 TO SR. CITIZEN
 Service fee or other charges in respect of
moneys borrowed.
Payees which are covered by section 194A
Any resident person who receives interest
from any person specified in provided the total
interest paid, or credited to his account, from
F.y.2018-19 onwards no TDS will be deducted
up Rs.50000 on senior citizens.

38.  When tax is to deducted
Tax is to be deducted either at the time of
credit of such income to the account of payee
or at the time of payment thereof in cash or
bank issue of a cheque or draft or by any other
mode, whichever is ealier
Which Challan to be used
TDS is required to be deposited in Challan
No.281.

39. TDS PAYMENT DUE DATES
 Tax deducted as per the Table Below:
Qtr of F.Y. ended Date of qtr
payment
30th June 7th July
30th September 7th October
31 December 7th January
31st March 30th April

40. DEDUCTION OF TAX AT SOURCE FROM
PAYMENTS TO CONTRACTORS/ SUB-
CONTRACTORS
 Scope and application of section 194C
Any person responsible for paying any sum
to any resident for carrying out any work in
pursuance of a contract between the contractor

41. 194 C: PAYMENT TO CONTRACTOR
and a ‘ specified person’ will be liable to
deduct tax at source at the prescribed rates.
The term ‘contract’ will include a sub- contract
also.
Meaning of ‘specified person’
The term ‘ specified person’
 The Central Government or any State
Government
 Any local authority.

42. PERSONS REQUIRED TO DEDUCT TAX FROM
CONTRACTOR
 Any corporation established by or under a
Central Act or State Act or Provincial Act.
 Any Company
 Any Co-operative society.
 Any authority constituted in India by or under
any law, engaged for the purpose of dealing
with and satisfying the need for housing
accommodation or for the purpose of
planning ,development or improvement

43. PERSONS REQUIRED TO DEDUCT TDS FROM
CONTRACTOR
of cities, towns and villages or for both.
 Any society registered under the Society
Registration Act, 1860 or under any law
corresponding to that Act in force in any part
of India.
 Any Trust
 Any university established or under Central,
state or Provincial Act and an institution
declared to be a university under section 3

44. PERSONS REQUIRED TO DEDUCT TAX FROM
CONTRACTOR
of the University Grants Commission Act,
1956.
 Any Government of a foreign State or a
foreign enterprise or any association or body
established outside outside India.
 Any firm. The term ‘firm’ will include a limited
liability partnership as defined in the LLP
Act,2008

45. 194 C : TDS ON CONTRACTOR
 What payments are covered by section 194C
Section 194C is applicable in relation to
payments for any work (including supply of
labour for carrying out any work). Provisions of
section 194C relating to tax deduction from
payment to contractors are applicable only
where contract is either a ‘work contract’ or a ‘
contract for supply of labour for works
contract’.

46. 194 C: WORKS CONTRACT TDS
 Who is responsible to deduct tax
The ‘payer’ is responsible to deduct tax at
source.
 When tax to be deducted
Tax is to be deducted either (a) at the
time of credit such sum to the account of the
payee, or (b) or the time of payment thereof in
cash or by

47. TDS ON WORKS CONTRACT
issue of cheque or by any other mode,
whichever is earlier.
Which challan to be used
The tax deducted at source is required to be
deposited in Challan no.281

48. DEDUCTION OF TAX AT SOURCE FROM
INSURANCE COMMISSION
 What is Insurance commission – The
insurance commission contemplated under
section 194D is ‘any remuneration or reward
for soliciting or procuring insurance business,
and remuneration or reward payable for the
continuance, renewal or revival of policies of
insurance’.

49. TDS ON INSURANCE COMISSION :194D
 Payee who are covered by section 194D
Any resident person who receives
insurance commission and quantum of such
payment during financial year.
Who is responsible to deduct tax at source
The payer is responsible to deduct tax at
source.

50. INSURANCE COMMISSION
 When tax to be deducted
Tax is to be deducted at source either –
 at the time of credit of such income to the
account of payee; or
 at the time of payment thereof in cash or by
issue or a cheque or draft or by any other
mode which ever is early.

51. DEDUCTION OF TAX AT SOURCE FROM PAYMENT
ON TRANSFER OF CERTAIN IMMOVABLE
PROPERTY (SEC. 194-I)
 WHAT PAYMENT IS COVERD BY SECTION
194-IA
Any sum paid by way of consideration for
transfer of any immovable property ( other than
agricultural land) is covered under section 194-
IA
Provided the consideration for transfer of an
immovable property of value more than Rs. 50
lakh

52. TRANSFER OF IMMOVABLE PROPERTY
 Immovable property
Immovable property means any land
(other than agricultural land) or any building or
part of building.
 Who is payer
The payer is any person, being a
transferee, responsible for paying to a resident
transferor any sum by way of consideration for
transfer of immovable property.

53. TDS ON IMMOVABLE PROPERTY
 Who is the payee
The payee is resident transferor of any
immovable property.
 Time of deduction of tax
Tax shall be deducted at the time of credit of
such sum to the account of the transferor or at the
time of payment of such sum by issue of a
cheque or draft or by any other mode, whichever
is earlier.

54. TDS ON IMMOVABLE PROPERTY
 Who is to deduct tax at source
The payer is to deduct tax at source.
 Rate of TDS
Tax shall be deducted at the rate of 1%.
•Challan for Tax is 26QB Form 16 A To be
issued within a week.

55. ACQUISITION AND TRANSFER OF IMMOVABLE
PROPERTY IN INDIA FOR NRI (195 )
 A person resident outside India who is a
citizen of India (NRI) can acquire by
 way of purchase, any immovable property in
India other than agricultural
 land/plantation property/farm house. He can
transfer any immovable property
 other than agricultural or plantation property
or farm house to:

56. TAXATION OF PROPERTY TRANSACTIONS BY NRI
 a) A person resident outside India who is a
citizen of India or
 b) A person of Indian origin resident outside
India or
 c) A person resident in India
 Payment for acquisition of property can be
made out of:

57. PROPERTY TRANSACTIONS BY NRI
 Funds received in India through normal banking
channels by way of
 inward remittance from any place of India or
 ii. Funds held in any non-resident account
maintained in accordance with
 the provisions of the Foreign Exchange
Management Act, 1999 and the
 regulations made by Reserve Bank Of India
from time to time. There are various rates of tds
for Individual/HUF, co-op societies and Non
Domestic co. from 10.04% to 21.84% etc.
i

58. DEDUCTION OF TAX AT SOURCE FROM FEES FOR
PROFESSIONAL OR TECHNICAL SERVICES.
 Scope and effect of section 194J
Section 194J, as amended by the Finance
Act,2012 provides for deduction of tax at
source on any sum payable to a resident by
way of deduction of tax at source on any sum
payable to a resident by way of

59. 194: INCOME FROM PROFESSIONAL OR
TECHNICAL SERVICES.
 Fees for professional services or
 Fees for technical services or
 Any sum payable as royalty or any sum
referred to in section 28 of the Act, generally
known as ‘non – compete fees’
 Payments covered by section 194J
Tax is required to be deducted at source
on –

60. 194 J : INCOME FROM PROFESSIONAL OR
TECHNICAL SERVICES.
 Any payment by way of fees for professional
services,or
 Any payment by way of fees for professional
services, or
 Any payment by way of fees for technical
services, or
 Any payment by way of royalty,or
 Any payment by way of non- compete fees

61. TDS ON DIRECTOR REMUNERATION
 Any remuneration or fees or commission by
whatever name called, other than those on
which tax is deductible under section 192,
paid to a director of a company.
 Who is to deduct tax at source
The payer is to deduct tax at source.

62. TDS FOR THE SERVICES OF DIRECTOR
 When tax is to be deducted at source
Tax must be deducted at that point of time
at which any of the following events occur first:
 At the time of credit of the sum to the
account of the payee.
 At the time of payment in cash or by issue of
the cheque or draft or by any other mode.
 When the sum is credited to any account,
whether called ‘Suspense Account’ or by any

63. CONTD…
other name, in books of account of the
payer.
 Certificate/ statement for tax deducted at
source
In respect of tax deducted at source
during the financial year, the payer should
furnish to the payee a certificate for tax
deducted at source in Form no. 16 A

64. FORM 16 A TO BE ISSUED : TIME SCHEDULE
 Time within which certificate is to be issued
The certificate shall be furnished quarterly
within the time limit specified below:
Quarter of the F.Y.
ended
Due date
30th June 30th July of the F.Y.
30th September 30th October of the F.Y.
31st December 30th January of the F.Y.
31st March 30th May of the F.Y. immediately Following the
F.Y. in which deduction is made.

65. DEDUCTION OF TAX AT SOURCE FROM RENT
PAYMENT: 194 I
 Scope and effect are covered by section 194-
I
Section 194-I, as by the Finance
Act,1994,with effect from 1-6-1994, provides
for deduction of tax at source from payments in
the nature of ‘income by way of rent’.

66. TDS ON RENT : 194 I
 What payments are covered by section 194-I
Payments of ‘income by way of rent’ by any
person.
 Payment of any ‘Income by way of Rent’
meaning
Rent means any payment under any lease /
sub-lease / tenancy or any other agreement or
arrangement for the use of any of the following
–

67. ASSETS ON WHICH RENT IS TAXABLE
 Land; or
 A building which includes factory building; or
 Land appurtenant to a building which also
includes factory building; or
 Plant; or
 Machinery; or
 Furniture; or
 Equipment; or

68.  Furniture; or
 Fittings
 Advance Rent
The Advance rent is paid ,it is subject to
tax deduction at time of “payment”.

69. DEDUCTION OF TAX AT SOURCE FROM RENT
PAYMENT
 Who is responsible for tax deduction
Any person (not being an individual or a
Hindu undivided family) responsible for paying
rent to a resident is required to deduct tax at
source under the provision of section 194 –I
.Payer himself is treated as person responsible
for paying rent.

70. RENT ON ASSETS:
 When tax has to be deducted
The person responsible for paying rent
should deduct tax at source.
 At the time of credit of such income to the
account of payee; or
 At the time of payment thereof in cash or by
issue of a cheque or draft or by any other
mode. Whichever is earlier.

71. TDS TO BE DEDUCTED BY COMPANIES ON RENT
 Rate of Tax
 Which challan to be used
The TDS is required to be deposited
challan 281
Particulars Rate of TDS
Renting of machinery/plant/equipment 2%
Renting of land or building (including
factory building) or land appurtenant to a
building or furniture or fittings
10% for company and 5% for
Individuals

72. TIME LIMITE FOR ISSUE OF FORM 1 A
Time within which certificate is to be issued
Quarter of the F.Y.
ended on
Due date
30th June 30th July of the financial year
30th September 30th October of the financial year
31st December 30th January of the Financial year
31st March 30th May of the Financial year immediately F.y.
Which deduction is made.

73. APPLICATION OF TAN( ONLINE)
 Step 1 –Visit
https://tin.tin.nsdl.com/tan/index.html and select
‘Online Application for TAN ( form 49B)
 Step 2 - Select Category of Deductors from the
drop down menu and click on "Select Button“
 Step 3 - Fill out the requisite details on the form
(Fill all mandatory fields (marked with *));
 Step 4 -If the data submitted by applicant fails in
any format level validation, a response
indicating the error(s) will be displayed on the
screen

74. TAN APPLICATION
 Step 5 - Forms need to be re-submitted after
rectifying the error(s); In case form level
error(s) do not exists a confirmation screen
with data filled by the applicant will be
displayed.
 Step 6 - In case applicant required any
amendment to the data displayed in the
confirmation screen, it may choose the edit
option

75.  Step 7 -In case the displayed information is
correct, applicant shall choose the confirm
option.
 Step 8 - On successful payment of Fees (in
case the mode of payment is other than DD
or Cheque) an acknowledgment slip will be
generated

76. CONTD…TAN APPLICATION
 Step 8 - Applicant shall save and print the
acknowledgment and send it to NSDL alongwith
requisite documents at
 NSDL e-Governance Infrastructure Limited,
 5th floor, Mantri Sterling,
 Plot No. 341, Survey No. 997/8,
 Model Colony,
 Near Deep Bungalow Chowk,
 Pune – 411016

77. SCREEN SHOT OF SITE.

78. SCREEN SHOT OF CHALLAN