TDS (Tax Deducted at Source)

TDS (Tax Deducted at Source) is a mechanism of collecting income tax at the source of income. Under this system, the payer deducts a certain percentage of tax before making the payment and deposits it with the government on behalf of the payee.

Purpose of TDS

• Ensures regular flow of tax revenue to government
• Widens the tax base
• Reduces tax evasion
• Minimizes burden on taxpayer at year-end

Key TDS Rates (FY 2024-25)

SectionPayment TypeThresholdTDS Rate 192SalaryBasic exemptionSlab rates 194AInterest (Banks)Rs. 40,00010% 194CContractor (Individual)Rs. 30,0001% 194CContractor (Others)Rs. 30,0002% 194HCommissionRs. 15,0005% 194I(a)Rent (P&M)Rs. 2,40,0002% 194I(b)Rent (Land/Building)Rs. 2,40,00010% 194JProfessional feesRs. 30,00010%

TDS Due Dates

• Deposit: 7th of the following month (30th April for March)
• Return Filing: Quarterly (31st July, 31st Oct, 31st Jan, 31st May)
• TDS Certificates: Within 15 days of return due date

TDS Returns

• Form 24Q: TDS on salary
• Form 26Q: TDS on non-salary payments
• Form 27Q: TDS on payments to NRIs
• Form 27EQ: Tax collected at source

Non-Deduction/Lower Deduction

Payees can submit Form 15G/15H (no tax liability) or obtain certificate under Section 197 for lower/nil deduction.