One Response to “ What Is The Tax Deducted At Source In India For Company And All The Areas Where Tds Are Applicable Please Tell ”

1. Rajababu on October 8th, 2009 5:32 pm

   What is TAN?
   TAN is the Tax Deduction Account Number issued by the Income-tax Department to all persons deducting tax at source. TAN has to be quoted in all relevant challans, tax deduction certificates, TDS returns and other notified documents. To get TAN all persons or organizations having offices in Chennai have to apply on Form 49B to their Income tax officer (TDS) at Chennai.
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   Persons Who are Required to Deduct TDS
   Tax has to be deducted by the person making payment
   Nature of payment
   Who has to deduct tax
   Salary
   All persons
   Winnings from lotteries
   Winnings from horse races
   Payment to Non – Residents
   All payments other than above
   For other payments , every person except Individuals and HUF whose sales / gross receipts in business is less than Rs 40 lacs or professional receipts is less than Rs 10 lacs have to deduct tax
   For Dividend where dividend payment exceeds Rs. 1000/-.
   The threshold limits for deducting tax are as under.
   Nature of Payment
   Threshold
   Salary
   If salary is expected to exceed Rs 50,000 per annum
   Rent
   If the annual rent together with advance rent exceeds Rs 1,20, 000 per annum.
   Winnings from lottery or crossword puzzle
   If payment exceeds Rs 5,000
   Winnings from Horse race
   If payment exceeds Rs 2,500
   Payments to contractors and subcontractors
   If the contract value exceeds Rs 20,000
   Interest on securities
   If aggregate amount of interest payable or creditable during the financial year exceeds Rs 2,500
   Interest other than interest on securities
   If aggregate amount of interest payable or creditable during the financial year exceeds Rs 5,000
   Insurance Commission
   If aggregate sum payable during the year exceeds Rs 5,000
   Commission on sale of lottery tickets
   If the payment exceeds Rs 1,000.
   Commission and brokerage
   If the aggregate payment or credit made on or after 1.6.2001, exceeds Rs. 2,500
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   Rates of TDS
   The TDS rates mentioned below are applicable to resident payees and are inclusive of the surcharge.
   Nature of Payment
   TDS rate
   Salary
   Tax on estimated income of the employee for the year.
   Rent
   15.75% if rent paid to an Individual or HUF (20.21% in case of others)
   Winnings from lottery or crossword puzzle
   31.5% of the prize
   Winnings from Horse race
   Interest
   21% if payment to company (10.5% for others)
   Payments to contractors and subcontractors
   2.1% of the payment if payment to contractor (1.05% for sub-contractor)
   Insurance Commission
   21% if payment to company ( 10.5% for others)
   Commission on sale of lottery tickets
   10.5% of commission
   Commission and brokerage
   5.25% of commission and brokerage
   Income in respect of Units
   10.5% of income in respect of Units.
   Dividend
   10.5% of dividend
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   Forms to be Used for Filing TDS Return
   The main forms are as under:
   Nature of Payment
   Form No
   Salary
   24
   Rent
   26 J
   Winnings from lottery or crossword puzzle
   26 B
   Winnings from Horse race
   26 BB
   Interest on securities
   25
   Interest other than Interest on securities
   26 A
   Payments to contractors and subcontractors
   26 C
   Commission
   26 D
   Fee for Professional or Technical Services
   26K
   Dividend and Income from units
   26
   Payment in respect of deposits under NSS
   26F
   Payments on repurchase of units by mutual funds or UTI
   26G
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   Important Dates in TDS
   Action
   Condition
   Last date
   Deduction of TDS
   Tax has to be deducted at the time of credit or payment whichever is earlier.
   Deposit of TDS
   Deduction by or on behalf of Government
   Tax has to be deposited on the same day
   When tax is deducted on payment
   Tax has to be deposited within one week from the last day of the month of deduction. Tax has to be deposited within one week from the date of deduction in case of TDS on Salary, Dividends, Winnings from lottery or Crossword Puzzles or Repurchase of units by Mutual Funds or UTI.
   When tax is deducted on crediting of amount
   Tax has to be deposited within two months from the end of the month in which the amount is credited
   Filing of Annual Return of Tax Deduction at Source
   T.D.S. on salary
   By the 31st of May of the following financial year
   T.D.S. on interest, house rent, works contract payments
   By the 30th of June of the following financial year

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