TDS
This query is : Resolved
26 March 2010
can anybody tell me in simple words what is TDS with the help of an example?
26 March 2010
TDS stands for Tax Deduction at source. As the name implies, it the tax which is deducted at the time of the source of income i.e when first person pays an amount to the second person it reflects the second persons income and is liable for tax. So Income Tax lays down a liability on the first person i.e the paying person to deduct the tax at the rate specified in the act.
For ex. A Pays Rs 50000 as rent to Mr.B. Then Rs 50,000 is the income of Mr.B which is liable to Tax. So Income Tax Act wants Mr A to deduct the Tax (Let say 10% i.e 5000) and pay the balance amount i.e Rs 45,000 to Mr.B.
Mr. A will deposit this TDS amount of Rs.5000 with the government account.
In this way the tax on the income is deducted at the stage of source of Income.
For ex. A Pays Rs 50000 as rent to Mr.B. Then Rs 50,000 is the income of Mr.B which is liable to Tax. So Income Tax Act wants Mr A to deduct the Tax (Let say 10% i.e 5000) and pay the balance amount i.e Rs 45,000 to Mr.B.
Mr. A will deposit this TDS amount of Rs.5000 with the government account.
In this way the tax on the income is deducted at the stage of source of Income.
26 March 2010
Meaning
Deducting the tax from the point of source of income...(Orginating point)
This is a good method of recovery of Taxes as government will get the revenue in the form of tax without waiting for completion of assessment.
Your income shall be the expense of others and the person incurring expense have to deduct a particular sum and remitt the same to tax authorities
Deducting the tax from the point of source of income...(Orginating point)
This is a good method of recovery of Taxes as government will get the revenue in the form of tax without waiting for completion of assessment.
Your income shall be the expense of others and the person incurring expense have to deduct a particular sum and remitt the same to tax authorities
26 March 2010
AGREE WITH EXPERTS.
26 March 2010
Tax deducted at source mean the tax recovered from the source at the time of the payment itself.deduction rates are based on the different nature of payment
26 March 2010
thanks
27 March 2010
agree with expert
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