What is TDS

TDS Introduction:
TDS is the abbreviation of Tax Deducted at Source. This is a provision from the Income Tax Act, 1961 in India. The income tax is deducted from the money paid at the time of making payments for the purpose like salary, Interest, Rent, commission, professional fees, etc. but not for the payments made towards products and assets.

TDS Applicability:
TDS is applicable for all service payments and salary payments and NOT applicable for product and asset purchases; Different TDS rates have been prescribed by the Income Tax Act for different categories.
The tax is deducted by the person who is making the payment and depositing the same with the Government and he is called “Deductor”. The person who receives the payment after deduction is called “Deductee”.

When the deducted TDS should be paid?
TDS deducted in a month should be deposited into Government account under the PAN of the respective Deductees on or before the 7th of subsequent month

When will the TDS return to be filed?
Filing is a mandate for the people by whom the income tax has been deducted. The filing needs to be done every quarter as follows:
Q1 ending 30 Jun – On or before 31st Jul
Q2 ending 30 Sep – On or before 31st Oct
Q3 ending 31 Dec – On or before 31st Jan
Q4 ending 31 Mar – On or before 31st May

The above dates can be extended by the Government for various reasons which will be announced then and there.