Tax Deducted at Source (TDS)
TDS is an abbreviated form of Tax Deducted at Source which is required to be deducted while making payment to parties at a given rate. There are some identified expenses/payments against which income tax department has prescribed a specific rate of deduction and the threshold limit on which it is required to be deducted.
Every business, whether a startup or an existing company, is certain to incur some expenses or to make payments to its parties irrespective of its size and scale. Thus TDS provisions apply to all types and size of businesses. It applies in the same or similar way to a proprietor, firm, LLP or a company registered under the companies, Act. 2013. The payment of expense by a person is an Income in the hands of the recipient. Thus the payor is under a liability to deduct the tax at applicable rates while making payment to the party. For small payments, the provision of TDS does not apply until it crosses a threshold limit as prescribed. It must be noted that the TDS is applicable only on the specified payment and after it reaches the threshold limit. The most common types of expenses on which TDS is applicable is provided hereunder.
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Key Points of TDS Deduction & Payment
Due Date of Payment of TDS & FIling of TDS Return
|SL. NO.||PARTICULAR||DUE DATE||TYPE OF EVENT|
|1||Payment of TDS deducted under various sections of the income tax act||Before 7th day of Next Month||Monthly|
|2||1st Quarter TDS Return ( 1st April to 30th June)||31st July||Quarterly|
|3||2nd Quarter TDS Return ( 1st July to 30th September)||31st October||Quarterly|
|4||3rd Quarter TDS Return ( 1th October to 31st December)||31st January||Quarterly|
|5||4th Quarter TDS Return ( 1st January to 31st March)||31st May||Quarterly|