Who Is Liable to Deduct and Pay TDS Under Income Tax Act?


Who is liable to Deduct and Pay TDS under the Income Tax Act?

 "Call Our Business Plan Experts at +91-72999-72500"


TDS stands for "Tax Deducted at Source". The purpose of TDS is to ensure that the Government receives taxes straight from the origin of income. The income tax act lays down that any entity making a payment which is liable to TDS (such as commission or brokerage, fees for technical services, rent of property etc) is required to deduct tax at the time of such payment and deposit it with the Government. This is done with an aim to prevent tax evasion and make sure that the Government gets its due share of taxes.

The person who is responsible for deducting tax at the time of payment and depositing it with the government is known as a 'deductor'. On the other hand, the person who receives the payment after the tax is deducted is called a 'deductee'. Individuals who get payments such as salaries, fixed deposits, recurring deposits et cetera can also be liable for TDS deduction.

Every deductor is duty bound to issue a TDS certificate to the deductor which mentions the amount of tax that has been deducted and deposited with the Government. This TDS certificate can be viewed by the deductee through his Form 26AS or Annual Information Statement (AIS). In case of salaried individuals, their employer is required to provide them with this document at the end of each financial year which contains details such as the computation of tax, amount of TDS deducted and paid. If an individual expects his income to be below the exemption limit, he can ask the payer to not deduct any TDS by filing Form 15G or 15H as the case may be.

 

Tel:+917299972500

info@filingpoint.com

Comments

Popular posts from this blog

How To Select Famous Auditors Consultants in Nungambakkam

Successful Business Ideas For Small Business Entrepreneurs in India

How to Create a Business Plan for a New Company in India?