TDS stands for tax deducted at source. As per the Income Tax Act, any company/bank 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.
TDS is basically a part of income tax.
TDS is deducted on the following types of payments:
- Interest payments by banks
- Commission payments
- Rent payments
- Consultation and Professional fees
- Payments to contractors
When should TDS to be deducted and by whom?
Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.
What is the due date for depositing the TDS to the government?
- The Tax Deducted at Source must be deposited to the government by 7th of the subsequent month
- TDS deducted in the month of March can be deposited till 30th April.