TDS - Tax Deducted at Source

TDS - Tax Deducted at Source

Introduction:

TDS (Tax Deducted at Source) was introduced with an intention to collect Tax from the various sources of income, which controlled by CBDT (Central Board of Direct taxes) it comes under the Indian Revenue Services (IRS). As per this concept TDS is to be deducted on specified payment as prescribed by Income Tax Act by persons who are liable to deduct TDS. So it is the duty of the deductor to deduct TDS as given in Income Tax Act. Each payment has its own rate of percentage to deduct TDS and remit the same into the account of the Central Government through Challan/electronically. Any type of payment covered under these provisions shall be paid after deducting set percentage. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

Page Contents

1.      Why TDS is Deducted

2.      Rate Chart of Tax Deducted at Source F.Y. 2015-16 & A.Y. 2016-2017

3.      Rate Chart of Tax Deducted at Source F.Y. 2016-17 & A.Y. 2017-2018

4.      Income Tax Slab F.Y. 2015-16 & A.Y. 2016-2017 (Salary)

5.      Income Tax Slab F.Y. 2016-17 & A.Y. 2017-2018 (Salary)

6.      Advantages of Tax Deducted at Source

Why TDS is Deducted

TDS is to be deducted based on two conditions, (a) while booking expenditure or (b) actual payment in cash or cheque to the payee’s account, whichever happens earlier.

TDS is to be deducted on salaries, Honorarium to Experts, rent on premises & others, interest on SB/FD accounts, payment of commission, payments on consultancy fees, payments to lawyers or freelancers for professional charges.

Employee/Deductee should submit PAN to the employer/deducter to avoid higher deduction @ 20% if they do not have your PAN information.

NO income tax/TDS would be deducted from your income if you submit investment/savings proofs for claiming deductions to your employer and your total taxable income is below the taxable limit.

You can also submit a declaration by Form 15-G (for others ) or Form 15-H (for Senior Citizens) to your bank if your gross total income is below the taxable limit, based on your declaration they won’t deduct TDS on your interest income.

If it is found that your employer/bank have already deducted and deposited Tax on your income due to lack of information and your gross total income is below the taxable limit then you can file a Return in the prescribed ITR Form and claim a refund of this TDS from Income Tax authority thereafter.

Rate Chart of Tax Deducted at Source F.Y. 2015-16 & A.Y. 2016-2017

Section	Particulars	TDS Rate				Criteria for Deduction /Threshold Limit
		Individual/HUF	Company / Firm/ Others	No PAN
192	Salary	As per Slab rates
192B	Withdrawal from EPF(Employees Provident Fund Organization)-Premature	10%	NA		20%	Rs. 30000/-
193	Interest on Securities i) 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; ii) any debentures issued by a company where such debentures are listed on a recognized stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; iii) any security of the Central or State Government; iv) interest on any other security	10%	10%	20%		N.A
194A	Interest on SB/TD/RD Accounts	10%	10%	20%		Payment in excess of Rs. 10000/-
194A	Interest other than interest on securities	10%	10%	20%		Payment in excess of Rs. 5000/-
194B	Winning from Lotteries	30%	30%	30%		Payment in excess of Rs. 10000/-
194BB	Winning from Horse Race, Cross word puzzle	30%	30%	30%		Payment in excess Rs. 5000/-
194C	Contractor (No TDS for Transport Contractors if quoting PAN and engaged in the business for plying, hiring or leasing of goods carriages)	1%	2%	20%		Payment in excess of Rs. 30000/- in a single bill and  Rs. 75000/- P.A.
194D	Insurance Commission	10%	10%	20%		Payment in excess Rs. 20000/-
194DA	Payment inrespect of LIC Policy	2%	2%	20%		Payment in excess Rs. 100000/-
194H	Commission or Brokerage	10%	10%	20%		Payment in excess Rs. 5000/-
194I	Rent of Land & Building, Furniture & Fittings	10%	10%	20%		Payment in excess Rs. 180000/-
194I	Rent of Plant & Machinery and Other Equipments	1%	2%	20%		Payment in excess Rs. 180000/-
194IA	Transfer of Certain Immovable property other than Agriculture Land	1%	1%	20%		Payment in excess Rs. 5000000/-
194J	Professional Services and Technical Services & Royalty	10%	10%	20%		Payment in excess Rs. 30000/-

Rate Chart of Tax Deducted at Source F.Y. 2015-16 & A.Y. 2016-2017

Section	Particulars	TDS Rate				Criteria for Deduction /Threshold Limit
		Individual/HUF	Company / Firm/ Others	No PAN
192	Salary	As per Slab rates
192B	Withdrawal from EPF(Employees Provident Fund Organization)-Premature	10%	NA		20%	Rs. 50000/-
193	Interest on Securities i) 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; ii) any debentures issued by a company where such debentures are listed on a recognized stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; iii) any security of the Central or State Government; iv) interest on any other security	10%	10%	20%		N.A
194A	Interest on SB/TD/RD Accounts	10%	10%	20%		Payment in excess of Rs. 10000/-
194A	Interest other than interest on securities	10%	10%	20%		Payment in excess of Rs. 5000/-
194B	Winning from Lotteries	30%	30%	30%		Payment in excess of Rs. 10000/-
194BB	Winning from Horse Race, Cross word puzzle	30%	30%	30%		Payment in excess Rs. 10000/-
194C	Contractor (No TDS for Transport Contractors if quoting PAN and engaged in the business for plying, hiring or leasing of goods carriages)	1%	2%	20%		Payment in excess of Rs. 30000/- in a single bill and  Rs. 100000/- P.A.
194D	Insurance Commission	10%	10%	20%		Payment in excess Rs. 20000/-
194DA	Payment inrespect of LIC Policy	1%	1%	20%		Payment in excess Rs. 100000/-
194H	Commission or Brokerage	5%	5%	20%		Payment in excess Rs. 5000/-
194I	Rent of Land & Building, Furniture & Fittings	10%	10%	20%		Payment in excess Rs. 180000/-
194I	Rent of Plant & Machinery and Other Equipments	1%	2%	20%		Payment in excess Rs. 180000/-
194IA	Transfer of Certain Immovable property other than Agriculture Land	1%	1%	20%		Payment in excess Rs. 5000000/-
194J	Professional Services and Technical Services & Royalty	10%	10%	20%		Payment in excess Rs. 30000/-

Income Tax Slab F.Y. 2015-2016 & A.Y. 2016-2017 (Salary). Individual, HUF, BOI, AOP, AJP below the age of 60 years, being a resident of India.

Sl. No.	Net Income Level	Rate of Income Tax
i.	Income Less than Rs. 2.5 Lakh	NIL
ii.	Income greater than Rs. 2.5 Lakh but Less than Rs. 5 Lakh	10% of balance amount which exceeds Rs. 2.5 Lakh
iii.	Income greater than Rs. 5 Lakh but Less than Rs. 10 Lakh	Rs. 25000/- Plus 20% of balance amount which exceeds Rs. 5 Lakh
iv.	Income greater than Rs. 10 Lakh	Rs. 125000/- Plus 30% of balance amount which exceeds Rs. 10 Lakh

Note: E. Cess@2% and S&HE Cess@1% applicable for all cases

Income Tax Slab F.Y. 2015-16 & A.Y. 2016-2017 (Salary). Individual age of 60 years or above but less than 80 years, being a resident of India.

Sl. No.	Net Income Level	Rate of Income Tax
i.	Income Less than Rs. 3 Lakh	NIL
ii.	Income greater than Rs. 3 Lakh but Less than Rs. 5 Lakh	10% of balance amount which exceeds Rs. 3 Lakh
iii.	Income greater than Rs. 5 Lakh but Less than Rs. 10 Lakh	Rs. 20000/- Plus 20% of balance amount which exceeds Rs. 5 Lakh
iv.	Income greater than Rs. 10 Lakh	Rs. 120000/- Plus 30% of balance amount which exceeds Rs. 10 Lakh

Note: E. Cess@2% and S&HE Cess@1% applicable for all cases

Income Tax Slab F.Y. 2015-16 & A.Y. 2016-2017 (Salary). Individual age of 80 years or above, being a resident of India.

Sl. No.	Net Income Level	Rate of Income Tax
i.	Income Less than Rs. 5 Lakh	NIL
ii.	Income greater than Rs. 5 Lakh but Less than Rs. 10 Lakh	20% of balance amount which exceeds Rs. 5 Lakh
iii.	Income greater than Rs. 10 Lakh	Rs. 100000/- Plus 30% of balance amount which exceeds Rs. 10 Lakh

Note: E. Cess@2% and S&HE Cess@1% applicable for all cases

Income Tax Slab F.Y. 2016-17 & A.Y. 2017-2018 (Salary). Individual, HUF, BOI, AOP, AJP below the age of 60 years, being a resident of India.

Sl. No.	Net Income Level	Rate of Income Tax
i.	Income Less than Rs. 2.5 Lakh	NIL
ii.	Income greater than Rs. 2.5 Lakh but Less than Rs. 5 Lakh	10% of balance amount which exceeds Rs. 2.5 Lakh
iii.	Income greater than Rs. 5 Lakh but Less than Rs. 10 Lakh	Rs. 25000/- Plus 20% of balance amount which exceeds Rs. 5 Lakh
iv.	Income greater than Rs. 10 Lakh	Rs. 125000/- Plus 30% of balance amount which exceeds Rs. 10 Lakh

Note: E. Cess@2% and S&HE Cess@1% applicable for all cases

Income Tax Slab F.Y. 2016-17 & A.Y. 2017-2018 (Salary). Individual age of 60 years or above but less than 80 years, being a resident of India.

Sl. No.	Net Income Level	Rate of Income Tax
i.	Income Less than Rs. 3 Lakh	NIL
ii.	Income greater than Rs. 3 Lakh but Less than Rs. 5 Lakh	10% of balance amount which exceeds Rs. 3 Lakh
iii.	Income greater than Rs. 5 Lakh but Less than Rs. 10 Lakh	Rs. 20000/- Plus 20% of balance amount which exceeds Rs. 5 Lakh
iv.	Income greater than Rs. 10 Lakh	Rs. 120000/- Plus 30% of balance amount which exceeds Rs. 10 Lakh

Note: E. Cess@2% and S&HE Cess@1% applicable for all cases

Income Tax Slab F.Y. 2016-17 & A.Y. 2017-2018 (Salary). Individual age of 80 years or above, being a resident of India.

Sl. No.	Net Income Level	Rate of Income Tax
i.	Income Less than Rs. 5 Lakh	NIL
ii.	Income greater than Rs. 5 Lakh but Less than Rs. 10 Lakh	20% of balance amount which exceeds Rs. 5 Lakh
iii.	Income greater than Rs. 10 Lakh	Rs. 100000/- Plus 30% of balance amount which exceeds Rs. 10 Lakh

Note: E. Cess@2% and S&HE Cess@1% applicable for all cases

Deferred Revenue Expenditure

Deferred Revenue Expenditure:

It makes you understand very easy what Referred Revenue Expenditure is if you know the meaning of Defer, which is “put off (an action or event) to a later time” Deferred is a past form of Defer.

All income and costs in a company is not directly correspond with goods and services sold or the assets purchased. Deferred Revenue Expenditure is a one type of revenue expenditure which is “incurred during an accounting year, but its benefits are to be derived over a number of following accounting periods”. These expenses are unusually bulky in amount and, fundamentally, the benefits are not consumed within an accounting year.

Accounting Treatment of Deferred Revenue Expenditure:

A part of amount which is charged to the Profit and Loss account in the current accounting year is reduced from the total expenditure and the rest amount is shown in the Balance Sheet as a Fictitious Assets and so on.

Examples:

A very simple example here to understand you the matter, such as Advertising expenditure, business can spend money on an advertising promotion, but not realize the increased sales immediately after advertisement over, yes will be benefitted after several months down the line when customers attract the full impact of the advertisements.

What is an Intangible Asset?

What is an Intangible Asset?

An asset which has not physical in nature is called Intangible Asset. Intangible Assets are Computer Software, Goodwill, Trade Mark, Patent, Trade Dress, Internet Domains etc.

What is a Tangible Asset?

What is a Tangible Asset?

An asset which has a physical form is called Tangible Assets. Tangible assets include Fixed Assets and Currents Assets.

1.     Fixed Assets:  Plant & Machinery, Land & Buildings, Furniture & Fixtures, Computer, Laboratory Equipments etc.

2.     Current Assets: Cash, including foreign currency Investments except for investments that cannot be easily liquidated, Prepaid expenses, Accounts receivable, Inventory etc.