Dec 072012

Tax Deducted at Source on other than Salaries

TDS aims at collection of revenue from the source of income. This method of collecting the tax amalgamates two concepts “Pay as you earn” and “Collect as it is being earned.”

Any Deductor / Company tends to hire an expert for either technical or professional service  or a contractor or sub-contractor for certain work on contract basis, the company has to deduct tds from the payment made to a party or deductee. The party or deductee from whose income tds is deducted get the credit of the amount deducted at the time of personal assessment on the basis of certificate issued by the deductor.

The scenarios in which tax is deducted at source  if total payment exceeded the limit specified:

  • When a Professional Architecture is hired to make a plan for construction of a new plant.
  • When any company hires a travel company to arrange a picnic for its employees.
  • When a company is hiring a Furniture Professional for doing its interior in the office.
  • When company has a rented office and paying rent on monthly basis.
  • When a company is paying commission on brokerage for buying office or acquiring office on rent.
  • etc.

Rate of TDS for Assessment Year 2013-14.

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TDS Deposit

After the TDS has been deducted from the payment of the party / deductee, the deducted tax has to be deposited to the government online using challan 281. The tax has to be deposited within 7 days from the end of the month in which tax gets deducted. Except tax deducted in the month of March, should be deposited before 30th of April.

For e.g. ,

1. A tax deducted on 5th May 2012 has to be deposited before 7th of June 2012.
2. A tax deducted on 30th May 2012 has also to be deposited before 7th of June 2012.
3. A tax deducted on 31st March 2013 has to be deposited before 30th of April 2013.

Due date for submitting Quarterly TDS return in Form 26Q.

  • By July 15th after the end of the first quarter. [April, May and June (Q1)]
  • By 15th October after the end of the second quarter.[ July, August and September (Q2)]
  • By 15th January after the end of the third quarter [October, November and December (Q3)]
  • By 15th May after the end of the fourth quarter [January, February and March (Q4)]

Issuance of TDS certificate

The deductor has to issue a certificate which comes in Form 16A containing name of the deducter, payment details like  BSR code, date of TDS deposit, serial no. of challan, rate of tax and tax amount . The due date for furnishing TDS certificate to the party or deductee is 15 days from the due date for Quarterly e-TDS Statement filing.