Tax Deducted at Source (TDS): Applicability and Compliance

TDS is primarily aimed at collecting tax revenue at the source of income, ensuring that the government receives taxes upfront rather than waiting for taxpayers to file their returns.

Section 192 of the Income Tax Act, 1961 deals with the provisions related to TDS on salaries, while Sections 194, 195, and 197 cover TDS on various other payments.

TDS is not applicable on rent payments. However, TDS may be applicable on other types of income, such as salaries, interest, professional fees, and winnings from lotteries or horse races.

TDS is applicable on salary income exceeding ₹2,50,000 in a financial year.

Form 16 is used by employers to deduct TDS on salary income and provide details of the TDS deducted to employees.

TDS returns for the previous financial year must be filed by 31st May of the following year.

Form 26Q is used to file TDS returns for salary income, while Forms 24Q, 27Q, and 28Q are used for TDS returns on other types of income.

A penalty of ₹200 per day is levied for late filing of TDS returns, subject to a maximum of the TDS amount.

Non-deduction of TDS can result in both interest and penalty, as per the provisions of the Income Tax Act.

The payer is responsible for deducting TDS on payments made to non-residents, as per the provisions of the Income Tax Act.

The rate of TDS applicable on interest income from fixed deposits is 10%, as per the provisions of the Income Tax Act.

ITNS 283 is not a challan used for depositing TDS. ITNS 280 is used for depositing TDS on salary, ITNS 281 is used for depositing TDS on non-salary payments, and ITNS 282 is used for depositing TDS on TCS.

TDS must be deposited by the 7th of the following month after the month in which the TDS is deducted.

Form 35 is used to claim a refund of excess TDS deducted, as per the provisions of the Income Tax Act.

The time limit for filing a refund claim for excess TDS deducted is 2 years from the end of the financial year in which the TDS was deducted.