Tax Deducted at Source, as the name suggests, is the tax deducted at the time the income is received by or credited to the “person” so that collection of tax is preponed and there is consistent flow of taxes to the government. TDS is deducted on various types of income sources such as salary, interest on bank deposits and bonds, winnings from lotteries and horse races, payment to contractors and sub-contractors, insurance commission, commission or brokerage, rent, fees for professional and technical services, etc.
A 10-digit Tax Deduction Number (TAN) is also mandatory to be obtained by the deductor for the purpose of deducting and depositing TDS to the credit of the Central Government. TDS Returns should be also be filed within due dates prescribed by the Income Tax Act, 1961. Deductor must issue TDS certificate giving details of income and corresponding tax deducted on same. This amount deducted is adjustable against income tax payable for the year by the deductee.
Non-Compliance with any of the provisions of TDS under the Income Tax Act may result in interests and other penalties. At Patron Accounting, experts will take care of your Income Tax issues including TDS and save you from penalties due to non-compliance.