Provision of Tax Deducted at Sourse (TDS) is Genuinely Tedious

Provision of Tax Deducted at Sourse (TDS) is Genuinely Tedious

Under Income Tax Act, Tax Deducted at Source (TDS) is really a Tedious for all the assesses. There are different sections 192 to 194 having subsections, analyses as under:

Section 192 TDS on Salary
Section 193 TDS on interest on securities
Section 194 TDS on Dividends
Section 194A TDS on Interest other than Interest on securities payable by persons other than Individual and HUF
Section 194B Winning from lottery or cross word puzzle or card Game and other game.
Section 194BB Winning from horse race
Section 194C Payment to contractors/sub contractors (payable by Persons other than individual and HUF)
Section 194D Payment of Insurance Commission
Section 194DA Payment in respect of Life Insurance Policy (other Than an amount exempt u/s 10(10D)
Section 194EE Payments out of deposits under National Savings Scheme refer to in Section 80CCA
Section 194G Payment of Commission etc. on Sale of lottery tickets
Section 194H Payment of commission or brokerage payable by persons other than Individual and HUF
Section 194I Payment of Rent payable by persons other than individual and HUF
Section 194J Payment of fee for(a) profession or technical services or

(b) royalty or

(c) any sum referred to in section 28(va) Payable by persons other than individual and HUF

Section 194LA Payment of compensation and enhanced compensation on acquisition of land (other than agricultural) and building
Section 194IA Payment of consideration transfer of land or building (other than agricultural land)
Section 194IB Rent payable by Individual or HUF(other than those referred to in 2nd proviso to Section 194I)
Section 194K Income in respect of units
Section 194N Payment of certain amount in cash
Section 194O Payments of certain sums by e-commerce operator to e-commerce participants

These are the different sections under which tax is to be deducted. The limit  for when to deduct tax is different in different sections, the rate of TDS is also different. The rate of TDS is minimum 1% to 10%, but in case of Section 194B and 194BB i.e. winning from lottery or cross word puzzle or Card game and games and winning from horse race is 30%.

Section 192: TDS on Salary:  Let’s start with section 192 in detail. Under this section title itself suggest TDS on Salary, that means it applicable to salaried assesses and not any other assesses.

In this section the responsibly of deduction of tax lies  with an employer, on Salary payable to their employees.

 When to deduct Tax?

The following are the main condition for deducting tax on salary.

  • There must establish the relationship of employer – employee.
  • Payment made by employer to employee should me in form of salary, which includes all types of perquisites. Any kind of honorarium received for service provide occasionally is not considered as salary.
  • The payment of salary should be in excess of minimum amount chargeable to tax, i.e. more than Rs. 2,50,000/

Persons responsible for deducting TDS:

We know that there are different types of employers, but who is responsible for deduction of tax? The following are the categories of employers and who is responsible person…Read more>>