TDS Ready Reckoner

Updated upto A.Y. 2018-19

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Tax Deducted at Source (TDS) is a measure, in which person who are making payment of income are responsible to deduct tax from such income (at specified rates) and pay only net amount. Tax so deducted (called TDS) shall be deposited with the Government’s treasury within the stipulated time. The payer will issue a certificate in Form 16 or 16A to the payee and the payee will get credit for TDS and his tax liability shall be reduced to that extent. In nutshell, the provisions are merely a mode of collection of income tax and a check on tax evasion through proper control and information.

Objects

  • Quicker realisation of tax
  • Effective realisation of tax

TDS, at a glance

Several provisions relating to TDS are as under:

  • Lump sum lease premium or one-time upfront lease charges, which are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any other property are not rent within the meaning of sec. 194-I. Therefore, such payments are not liable for TDS u/s 194-I. [Circular 35/2016]
  • As per provision of sec. 206AA, if payee fails to provide his PAN, tax is required to be deducted at the rate mentioned in respective section or 20%, whichever is higher. However, there are certain exceptions to this rule like provision is not applicable in case of few instances covered u/s 194LC.
  • Further, in the case of a non-resident, not being a company, or a foreign company and not having PAN, the provisions of sec. 206AA shall not apply in respect of payments in the nature of interest, royalty, fees for technical services and payments on transfer of any capital asset, if the deductee furnishes the specified details and the documents to the deductor [Notification 53 dated 24-06-2016]
  • Deduction u/s 194-IB shall not exceed the amount of rent payable for the last month of the previous year (or the last month of the tenancy)
Applicability of surcharge and education cess while computing TDS
On Salary (paid to resident or non-resident)Surcharge, Education cess & SHEC shall be considered.
Any other payment to residentNo surcharge, education cess & SHEC shall be considered
Any other payment to non-resident
– Where amount of such payment exceeds ₹ 10 croreSurcharge, education cess & SHEC shall be considered.
– Where amount of such payment exceeds ₹ 1 crore but does not exceed ₹ 10 croreSurcharge, education cess & SHEC shall be considered.
– Where amount of such payment does not exceed ₹ 1 croreEducation cess & SHEC shall be considered.
Also Read  Salary : Other Provisions (Part 4)