Overview |
TAN |
Payment of TDS |
Return |
Rates |
Rates
TDS Rate
A deductor is required to deduct tax at source in accordance with the rates as specified in the relevant provision of the Income-tax Act (‘Act’) read with the First Schedule to Finance Act. However, if PAN of the recipient is not intimated to the deductor, in view of Section 206AA, the tax shall be deducted at source at higher of the following rates:
a) at the rate specified in the relevant provision of this Act; or
b) at the rate or rates in force; or
c) at a rate of 20%.
Further, where any person located in a notified jurisdictional area is entitled to receive any sum or income or amount on which tax is subject to TDS, the tax shall be deducted in accordance with at the highest of the following rates:
a) at the rate or rates in force;
b) at the rate specified in the relevant provisions of this Act;
c) at a rate of 30%
Overview
For a quick and efficient collection of taxes, the Income-tax Act has incorporated a system of deduction of tax at the point of generation of income. This system is called “Tax Deducted at Source” commonly known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is directly remitted to the Government by the payer on behalf of the payee.
The provisions of tax deducted at source presently apply to several payments like salary, interest, commission, brokerage, professional fees, royalty, etc.
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