Reason for introduction of TDS

There is always a time gap between deriving of income and payment of tax there upon .The objective of introduction of the provision tax deduction at source is to reduce that time gap and also ensure the regular flow of funds to government

Demerit by T.D.S is according to time value of money we are loosing

The payer, being the person deducting tax at the source and also responsible for interest and penalty if any due to default committed

Section 192 T.D.S on salary

Payer:-resident or non -resident employer

Payee:-resident or non –resident employee

Rate: - normal slab rate as per the financial act for its financial year

Some elements regarding section 192 in brief

a. Employer may be more than one

b. T.D.s can be collected for 12 months

c. T.D.S is to be collected based on actual payment of salary only not on the basis of accrual or some thing

d. Employee is working at more than one employer then he has to mention the details in form 12B

e. T.D.S u/s 192 has to be deducted on estimated income of the employee under the head “Salaries” for that Financial Year. No tax will however be required to be deducted at source for financial year 2014-2015

f. in any case unless the estimated salary income including the value of perquisites, exceeds – 

g. T.D.S to be collected on over time salary also

h.· Any payment to the employer at the time of termination for settlement of any dispute is not effected to collect T.D.S

i.  Salary paid to chief minister and chief justice at high court and supreme court is liable to deduct T.D.S

j. Mps and MLA”S received remuneration is not effected with section 192 why because they are not working under any employee and employer relationship they elected by public

k. To deduct T.D.S under section 192 there must be employer and employee relationship and actual payment of salary in monetary terms

l. If salary paid to resident /non -resident employee by resident / non-resident employer for work done in foreign currency then T.D.S deducted in rupees At the prescribed rate as per section 192(6)

Section 193:-

Interest on securities

Payee: - resident of India

Payer:- any person

• Any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a central, state or provincial act. @10%

• Any debentures issued by accompany where such debentures are listed on a recognized stock exchange in accordance with securities contract act 1956 and any rules made there under @10%

• Any securities of the central or state government @10%

• Interest on any other security @10%

Section 194:- Dividend other than the dividend as referred to in section115-O @10%

Payee: - resident share holder

Payer: - domestic company

Limit – if amount received exceeds 2500 then section 194 will apply

Section194A: -

Payer: - any person

Payee: - any resident in India

Any interest other than interest on securities more than 5000, Rs 10000 in case of banking companies, co-operative society @10%

Section 194B:- Income by way of winning from lotteries, cross word puzzles or card games and any other game of any sort exceeds RS.10000 @30%

Section194BB:- income by winning from horse races exceeds Rs5000@30%

Section 194C:- payment made to contractor - HUF or individual @1%, others @2%

Section 194D:-Insurance commission if exceeds Rs 20000@10%

Section194DA:- payment in respect of life insurance policy exceeds RS 100000 @2%

Section 194E:- income from participation in any game or sport in India by NRI *(INDIVIDUAL/ASSOCIATION/INSTITUTE)@20%

SECTION194EE:- ANY SUM OUT OF NATIONAL SAVINGS SCHEME ACCOUNT EXCEEDING RS2500@20%

SECTION194F:- AMOUNT on account of repurchase of units covered u/s 80CCB@20%

Section194G:- commission, remuneration or prize exceeding Rs. 1000@10%

Section 194H:-commission or remuneration or prize exceeding Rs. 5000@10%

Section194I:- rent exceeding Rs180000 P&M/equipment@2%,land/building, furniture or fittings@10%

Section 194IA:- Payment on transfer of certain immovable property other than agriculture land for consideration exceeds 50lakhs @1%

Section 194J:- any sum paid by way of Fee for professional services/fee for technical services/royalty/remuneration or fee or commission to director /not sharing patent, copy rights @10%

Limit –Rs. 30000 for each

Section 194LA:- payment of compensation on acquisition of certain immovable property @10%

Limit –RS2lakhs

Section 194LBA:- Certain income distributed by the business trust to their unit holders @10%

Section 194LB:- payment of interest on infrastructure debt fund@5%

Section 194LC:- payment of interest by an Indian company or business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long term bonds @5%

Section194LD:- Payment of interest on one rupee denominated bonds of an Indian company or government securities to foreign institutional investor or a qualified foreign investor @5%

Section 194B:- Income from units to an offshore fund @10%

Section195:- any interest or any sum chargeable as income (other than salaries)

Section 196C:- Income from foreign currency bonds or GDR of an Indian company @10%

Section 196D:-Income of foreign institutional investors from securities @20%