Hello Friends… Today I want to discuss something about TDS. We all may have a lot of questions regarding TDS, TDS certificates and its related issues. Through this article I have tried my best to describe some important points on TDS. Hope you all find this article helpful. Thank you
TDS
TDS or Tax Deducted at Source is one of the modes of collecting income tax from the assessees in India.
In simple terms, TDS is the amount of tax getting deducted from the person (Employee/Deductee) by the person paying (Employer/Deductor).
Deductor
Deductor is a person/company who is liable to deduct the tax at source, from the payment being made to the party. Deductor is also termed as Employer in cases where the payments are under Salaries.
Deductee
Deductee is the person, from whom the tax is being deducted or accrued for deduction.
Depending on the nature of the deduction being made, deductees and respective submission forms are categorized to 3 types:
1. Salaries: In case of salaries, the deductee is termed as an Employee. All the information of deductions and payments in this category should be submitted in Form 24Q to the government.
2. Non-Salaries - Resident: In case of non-salaries and the payment is made to a resident in India, the deductee is termed as a Deductee or a Party. All the information of deductions and payments in this category should be submitted in Form 26Q to the government.
3. Non-Salaries – Nonresident: In case of non-salaries and the payment is made to a non-resident of India, the deductee is termed as a Deductee or a Party. All the information of deductions and payments in this category should be submitted in Form 27Q to the government....
TDS Certificates
A tax deductor is also required to issue TDS certificate to the deductee within specified timed under section 203 of the I T Act. The con from the deductor, for the deduction and payment of the respective TDS amount to the bank, issued to the deductee is a TDS certificate.
The deductee should produce the details of this certificate, during the regular assessment of income tax, to adjust the amount of TDS against the Tax payable by the Deductee [assessee].
Types of TDS certificates
Salaries — Form 16: In case of Salaries, the certificate should be issued in FORM 16 containing the Tax computation details and the Tax deducted & Paid details. This refers to the details submitted over Form 24Q.
Non-salaries — Form 16A: In case of Non-Salaries, the certificate should be issued in FORM 16A containing the Tax deducted & Paid details. Separate certificates should be prepared for each Section [nature of payment]. This refers to the details submitted over Form 26Q and 27Q.
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