When and how much T.D.S. be deducted


As you are aware that if there is a burden of deducting T.D.S.on you then it is to be deducted and is to be paid timely, otherwise heavy penalty will be imposed on you. The amount of T.D.S. is to be deposited on monthly basis and the return is filed quarterly. The Return for the quarter ending June should be filed by 15th July and for government Offices it is to be filed by 31st July and deducted TDS for the month of June should be deposited latest by 7th July.

Rates of T.D.S.

The rates of T.D.S. for the financial Year 2012-13 will be as follows:

Interest on others except Security (section 194 A)
On Lottery Crossword Puzzles, (section 194B)
On amount won in Horse Race (section 194BB)
On commission from Insurance (section 194D)
On Individual or HUF Contractor or Sub Contractor (Sec. 194C)
On contractor or sub contractor other than Individual and HUF(Sec. 194C)
Deemed Dividend u/s. 2 (22) (e)
On other Dividends
On Commission from sale of lottery tickets (section194G)
On Commission & Brokerage (section 194 H)
On rent from Plant Machinery and Equipments ( section 194 I)
On rent from Land, Building, Furniture Fittings (194 I)
On Fees for Professional or Technical Services (194 J)

No Education Cess or Higher Education Cess will be levied on the above rates of T.D.S.

Minimum Ceiling for Deduction of TDS.

On payment of below mentioned amounts, no T.D.S. is deductible:

On interest paid by any Bank or cooperative society
Up to Rs. 10,000/-
On payment of interest by others
Up to Rs. 5,000/-
On payment of Lottery/ Crossword Puzzles (section194B)
Up to Rs. 10,000/-
On winning from Horse Race (section 194 BB)
Up to Rs. 5,000/-
On payment to Contractor (section 194C)
Up to Rs. 30,000/- for a single transaction or up to Rs. 75,000/- for yearly transactions.
On Insurance Commission (section 194D)
Up to Rs. 20,000/-
On Commission & Brokerage ( section 194H)
Up to Rs. 5,000/-
On Rent ( section 194 I)
Up to Rs. 1,80,000/-
On Professional and Technical Fees (section 194J)
Up to Rs. 30,000/-

When to deposit T.D.S.

As per Rule 30 of Income Tax Rules, 1962 TDS is to be deposited as under:-

On deduction of T.D.S. by the Government:

(i) If the tax is deposited without Income Tax Challan, then it should be deposited on the day of such deduction.

(ii) If any T.D.S. is deducted u/s. 192(1A), then it should be deposited within seven days from the month end of the month of deduction.

On deduction of T.D.S. by Others:

(i) If the T.D.S. has been deducted in the month of March then it should be deposited by 30th April. (Notification no. 41 dated 31.05.2010)

(ii) In other cases within seven days from the month end of the month of deduction.

Note:- As per rule 30 (3), Joint Commissioner in special conditions can allow TDS deducted u/s192, 194A, 194D, 194H to be deposited on quarterly basis by 7th July, 7th October, 7th January and 30th April.

New Provision:

According to new provisions, the T.D.S. deducted during the month of March can be deposited by 30th April. It is mandatory to deposit the return for this quarter by 15th May. It is also mandatory to issue TDS Certificate by 31st May.

Who has to pay electronically?

According to Rule 125, every Company and those taxpayers whose accounts are being audited u/s. 44AB are required to pay Electronically w.e.f. 01.04. 2008.

T.D.S. Certificate:

The person deducting T.D.S. shall issue T.D.S. certificate in the prescribed period. Such certificate shall be issued in prescribed forms. According to Rule 31(1), T.D.S. certificate shall be issued in below mentioned forms:

On deduction of T.D.S. from Salary                    Form No. 16
On deduction of T.D.S. from all other income      Form No. 16A

Central Board of Direct Taxes vide its Circular no. 3/2011 dated 13.05.2011has issued instructions for downloading of TDS certificate to be issued in Form 16 A from TIN Website.

Special Information regarding T.D.S. Certificate since 01.04.2011:

As per new guidelines, all Companies, Banks, Co-operative societies are required to issue certificate in form 16A generated from TIN Central System. This certificate shall be generated from TIN Website with Unique TDS Certificate Number. Certificate for all TDS deductions u/s 192 since 01.04.2011 shall be issued under above procedure only.

Other persons such as Proprietors, Partnership Firms etc. can issue T.D.S. certificate either by downloading from TIN Website or can continue as per the old procedure.

Certification of T.D.S. Certificate:

The T.D.S. certificate downloaded from TIN Website can be signed digitally and can also be issued under physical signature too.

Time Limit for issuance of TDS Certificate:

As per Rule 31, T.D.S. Certificate in case of Salary should be issued in form 16 annually by 31st May after end of the Year.

In the case of others, T.D.S. crtificate is to be issued on quarterly basis within 15 days from the date of submitting quarterly return. Quarterly return is submitted within 15 days from end of the corresponding quarter, thus T.D.S. certificate should be issued within 30 days from the end of the quarter.

What to do if certificate is lost.

If the issued certificate is lost, can the deductor issue a duplicate certificate? According to Rule 31(5) of Income tax rules, deductor can issue duplicate certificate in lieu of original certificate.

PAN number should be mentioned on Bill, Voucher, and Correspondence:

According to section 206aa(5) of Income Tax Act, from Assessment Year 2010-11, it is mandatory to mention PAN No. on all bills, vouchers issued both by deducter and deductee and on their correspondence.

Provision for rebate of expenses on delayed deposit of TDS amount:

If no TDS has been deducted when there was liability to do so then the rebate of expenses will not be allowed. If the deducted TDS is deposited before filing of return for the corresponding assessment year then the rebate will be allowed in the same year but on depositing TDS after the last date of filing return the rebate for it will be allowed in next assessment year.

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