What is TDS ? Applicability of TDS | What kind of transaction liable to TDS ?

What is TDS ? 

TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

The company or person that makes the payment after deducting TDS is called a deductor and the company or person receiving the payment is called the deductee. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government. TDS is deducted irrespective of the mode of payment–cash, cheque or credit–and is linked to the PAN of the deductor and deducted.

(As per the income tax act) TDS is deducted on the following types of payments:

Section - 192 Salaries

Section - 192(A) TDS on PF withdrawal
Section - 193 Interest on Securities
Section - 194 Dividends
Section - 194(A) Interest other than 'Interest on securities' 
Section - 194(B) Winning from lottery or crossword puzzle 
Section - 194(BB) Winning from horse race 
Section - 194(C) Payments to contractors and sub-contractors 
Section - 194(D) Insurance commission 
Section - 194(DA) Payment in respect of life insurance policy 
Section - 194(E) Payments to non-resident sportsmen or sports associations 
Section - 194(EE) Payments in respect of deposits under National Savings Scheme
Section - 194(F) Payments on account of repurchase of units by Mutual Fund or  Unit Trust of India 
Section - 194(G) Commission, price, etc. on sale of lottery tickets 
Section - 194(H) Commission or brokerage 
Section - 194(I) Rent 
Section - 194(IA) TDS on Sale of immovable property 
Section - 194(J) Fees for professional or technical services 
Section - 194(K) Income payable to a resident assessee in respect of units of a specified mutual fund or of the units of the Unit Trust of India 
Section - 194(LA) Payment of compensation on acquisition of certain immovable 
Section - 194(LB) Income by way of Interest from Infrastructure Debt fund 
Section - 194(LC) Income by way of interest from specified company payable to a non-resident 
Section - 194(LBA) Certain income from units of a business trust 
Section - 194(LBB) Income in respect of units of investment fund 
Section - 194(LBC) Income in respect of investment in securitization trust
Section - 194(LD) TDS on interest on bonds / government securities 
Section - 195 Other sums payable to a non-resident 
Section - 196(A) Income in respect of units of non-residents 
Section - 196(B) Payments in respect of units to an offshore fund 
Section - 196(C) Income from foreign currency bonds or shares of Indian 
Section - 196(D) Income of foreign institutional investors from securities 
Section - 206(CA) Collection at source from alcoholic liquor for human 
Section - 206(CB) Collection at source from timber obtained under forest lease 
Section - 206(CC) Collection at source from timber obtained by any mode other  than a forest lease 
Section - 206(CD) Collection at source from any other forest produce (not being tendu leaves) 
Section - 206(CE) Collection at source from any scrap 
Section - 206(CF) Collection at source from contractors or licensee or lease relating to parking lots 
Section - 206(CG) Collection at source from contractors or licensee or lease relating to toll plaza 
Section - 206(CH) Collection at source from contractors or licensee or lease relating to mine or quarry 
Section - 206(CI) Collection at source from tendu Leaves 
Section - 206(CJ) Collection at source from on sale of certain Minerals 
Section - 206(CK) Collection at source on cash case of Bullion and Jewellery 
Section - 206(CL) Collection at source on sale of Motor vehicle 
Section - 206(CM) Collection at source on sale in cash of any goods(other than bullion/jewelry) 
Section - 206(CN) Collection at source on providing of any services(other than Ch

However, individuals are not required to deduct TDS when they make rent payments or pay fees to professionals like lawyers and doctors.

TDS is one kind of advance tax. It is tax that is to be deposited with the government periodically and the onus of the doing the same on time lies with the deductor. For the deductee, the deducted TDS can be claimed in the form of a tax refund after they file their ITR.

What is TDS return?

A deductor has to deposit the deducted TDS to the government and the details of the same have to be filed in the form of a TDS return. A TDS return has to be filed quarterly. Different types of TDS deductions have to be filed using different TDS return forms.

Know Applicability and rates of TDS According to Section 

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