TDS is deducted by the payer/deductor at the time of making certain specified payments to the payee/deductee. The deductor is responsible for deducting the TDS as applicable from the payee’s payment & remitting it to the government.
Thank you for reading this post, don't forget to subscribe!TDS is deducted by the payer/deductor for various types of payments such as salaries,interest,dividends,rent,professional fees,commission,contractual payments, winnings from lotteries and many more.
The most commonly used TDS sections are 194C,194J,194Q,194H &194I.
Let’s discuss on these 5 important TDS sections: –
| TDS Section | Nature of Payment | TDS Rate | Threshold Limit for the current FY 23-24 |
| 194C | Payment made to Contractors/sub-contractors. | 1% applicable to Individual/HUF. 2% applicable to Companies & others | Rs.30,000/-for single payment Or Rs.1,00,000/- aggregate payment in a Financial Year |
| 194J | Payment for Professional Fees. | 10% | Over Rs.30,000/- in a Financial year. |
| 194Q | Purchase of Goods | 0.1% | If the value of goods Exceeds Rs.50 Lacs in a Financial year. |
| 194H | Commission and Brokerage | 5% | If the payment exceeds Rs.15,000/- in a Financial year. |
| 194I | Rent | 10% on Land/Building , 2% on Plant & Machinery. | Rs.2,40,000/-per annum. |
TDS Calculation:-TDS is calculated on the Value of Goods / Services, No TDS is to be deducted on GST component.
TDS Deposit:-The deductor is required to deposit the TDS amount with the government on/before 7th of the subsequent month.
TDS Return:-TDS return is a quarterly statement/summary of all TDS related transactions made during the specific quarter.
TDS Certificate:- After filing quarterly TDS return, the deductor needs to issue a TDS certificate to the deductee as a proof of tax deductions.
