TDS or Tax Deductible at Source is a big confusion point for a lot of taxpayers. What is TDS, how is it calculated and how is it deducted are some questions users have in their minds. Today, we are going to answer all the questions related to the same. This is to ensure you are able to file your income tax returns without hassle. Once you understand what is TDS all about, you will know exactly how much tax you may have to pay.
TDS – Frequently Asked Questions
What is TDS?
Tax Deductibe at Source is a tax that is deducted from an individual’s salary periodically. However, since it is deducted at source, you will get your salary only after it has been deducted from it. As to why is it deducted from source, there are reasons for it – preventing tax evasion, widening of tax collection base, ease of collection and responsibility sharing between the deductor and tax collection agencies.
How is TDS calculated?
Based on income tax slabs, an individual’s salary, interest received, commission received and fee received are subject to deductions under this head. However, since the deduction is made at source, by submitting your investment proofs, you can claim this amount back in part of full, depending on your investments.
How can I file for TDS returns?
Just like IT returns, you need to file for TDS returns. To do so, you can head Income Tax Department’s website, sign into your account and file the returns. Once done, you will also have to verify the returns, only after which will your return filing process be complete.
Is there penalty for late filing TDS returns?
Yes, there is a fine for late filing. An amount of Rs 200 per day is charged for late filing. This fine keeps increasing until it reaches the same amount as your tax liability. If you do not compete the process for over a year or furnish wrong PAN details, you will have to pay a penalty amount ranging from Rs 10,000 – Rs 1,00,000. So, simply put, please pay your tax on time to avoid hefty penalties from being levied on you.
How to know how much TDS has been deducted?
Simply take a look at the Form 16/TDS certificate that your employer provides to know this detail. Either this or you can login to your account on Income Tax e-filing portal and view the Form 26AS.
Who deducts TDS? On whom does the onus of depositing TDS lie?
The employer has to deduct TDS. In case the it is not deposited for a salaried individual, the onus falls on the employer and not the individual concerned. There is a reason why it is called Tax Deductible at Source. Not only is it deducted at source, but by your employer. So, the onus is never yours but your employer’s to submit it.
There is some benefit of Tax Deductible at Source to be had. First off, you do not have to worry about its calculation. Tracking the amount deducted from your salary under this head is easy. Also, if your earnings do not fall under taxable income slabs, you will not have to pay TDS. However, the returns’ filing process will not be complete until you verify the same. Also, late filing will penalise you until you choose to pay it. Going by how it works, you do not have to worry about Tax Deductible at Source. Moreover, if you have made any investments, submitting their proofs will help you in claiming refunds. We hope the above-mentioned clear your doubts about what is TDS, how it works and other related questions.
If you have any queries that need to be answered on this topic, do write to us in the comments below. We may even include the same here.