What is TDS ? & TDS Rate F.Y. 2018-19 & A.Y. 2019-20

In this article, we will try to know the actual concept of TDS, it’s role, importance. Why & how it is carried out in the country will be the main perspective of today’s article.

Introduction :

TDS is tax deducted at source. This is nothing but a way to collect an income tax in India. It is managed by the Central Board for Direct Taxes (CBDT). Amount covered under this criteria is paid after deduction of recommended percentage or portion. Income Tax Act of 1961 controls all this. CBDT is a part of Indian revenue system which is managed by Indian Revenue Department. It is an important while conducting Tax Audits regarding disallow the some specific amount.

To collect tax from the active & enormous source of income is the actual aim of Tax Deducted at Source (TDS). This was obviously introduced under the Income Tax Act of 1961. This concept or you can use word TDS system says the person (Deductor) who is accountable for making payment of another person (Deductee) has an authority to to deduct a precise amount meaning tax at source and  credit the same into the central government account or into the account of the concerned one. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

How to pay deducted or collected tax at source ?

It is done in a very easy way.Whatever tax deducted or collected at source is deposited to the credit of the central government account by Electronic way. Actually E mode is mandatory for corporate level and those to whom provisions of section 44AB of the Income Tax Act, 1961 is applied. Second way is physical mode. It can be done with Challan 281 in the authorized bank branch. 

Main Objectives Of TDS

To avoid lump sum amount and making salaried people to pay tax in an installments. This is done to enable them to pay the tax because they earn. Collection of the tax at the time of payment of income to various professionals such as contractors. Government also requires funds each year, thus various taxes help them to get funds throughout the year. And run government easily.

Specified Rates for TDS

Specific rates are decided in the relevant provision of the Act or First Schedule to Finance Act, so taxes shall be deducted accordingly. Such a case where payment to non resident persons, ‘double taxation avoidance agreements’ are needed to withhold tax rates. This is specified under rules.

Due Date Of TDS Submission

 Quarter                                    Government Deductor                    Non-Government Deductor

    Q-1                                               15th August                                         30th July
(Apr-Jun)

    Q-2                                              15th November                                    30th October
(Jul-Sep)

   Q-3                                               15th February                                     30th January

(Oct-Dec)

  Q-4                                                 30th May                                              30th May
(Jan-Mar)

Late Fees
If TDS return is nor submitted within due date given prescribed by Finance Act, than 200/- per day late fees will be levy but subject to Maximum amount Of TDS Deduction but Deductor 

Interest
Interest will be levied at the rate of 1% per month due to delay in deduction of TDS & If the Deductor deduct the TDS but not remitted to Government than Interest will be levied at 1.5% per month till date of payment.

Note- Both Interest & Late Fees will be paid before filing the TDS return. 

Click here to Download TDS Chart for F.Y. 2018-19 & A.Y. 2019-20