What is The Meaning of TDS & Full Form of TDS: So without wasting time, let’s Start with TDS stands for tax deducted at source. The payer of income deducts the tax from the gross payment due and pays the net amount (i.e. net of tax).
What is TDS or the Meaning of TDS
There are many other ways to tell the meaning of TDS, but if I say it in simple language, then the tax collected from you by the government is called TDS.now I will tell you two types of this, the government collects tax from you in two ways and we call those two ways.
- Direct Tax: You must have known from the name that whatever goods or anything you buy, such as if you take property for quotation, then in that also you are required to pay tax on that property, and not only this, you pay Rs. Even if you buy shampoo, your tax is deducted from that too.
- Indirect Tax: This is in line with a process whose main objective is that no evasion of any kind can be done in paying tax, this is called an indirect tax.
What is The full form of TDS?
Under the TDS system, tax is deducted at the origin of the income. TDS full form is tax deducted at the source
Explain Who is Deductor and Why Deducted your TDS was?
All of you must be working in some or the other company, and do you understand that after deducting TDS by the organization giving you income i.e. Deductor, the amount of TDS is deposited in the government’s account and through the deductor, If you want, you can file the deducted TDS through the income tax return (ITR) process. And the thing to keep in mind is that if the deductor does not deposit the TDS in the government’s account on time, then interest and penalty can be imposed on the deductor by the Income Tax Department. Hope you have come to know why TDS is deducted.
Types of Payments TDS is deducted?
TDS is deducted on various types of payments like – Salary, Interest, Dividend, Commission, Professional Fees, Rent of any kind, Brokerage ), TDS is deducted on Contract Payments, etc.
Which is very important and can also save you from upcoming troubles, let’s understand it in the form of a quote.
So let’s assume that you are running some kind of company, you are the owner of that company, then it is obvious that you have hired employees and are giving them salary on time every month, then you have to deduct TDS from their salary. It is important that it shows that you have nothing more than your income and you are safe.
And if seen from another point of view, we can say that you all are well aware of the increasing population of our country, so in such a situation, the government makes you aware of all the facilities.
Like ration, free electricity, water, and also different types of latest schemes that you take advantage of, it is all possible because you pay TDS and make your valuable contribution to the major development of the country.
TDS refund
Form 16 / 16 A certificate is provided to the person (Deductee) deducting TDS from the TDS deducting organization. All the information related to TDS deduction is recorded in this certificate.
Sometimes in some cases it also happens that TDS is also deducted from those whose income does not come under the purview of income tax, then provision has been made by law for them also. Any person whose income does not come under the purview of tax can claim a TDS refund by filing Income Tax Return (ITR) in the relevant assessment year.
Let us understand this through a quote.
This is just like if you send money to someone’s bank and if that money goes to someone else, then you tell the bank employee and he asks you to write an application through which your money will be returned to your account. I come safely.
In the same way, suppose that your TDS has been deducted, then you can get back your deducted TDS by filing ITR, that is, you can claim it.
Hope you must have known what is the process for TDS Refund.
Do you know when and by whom TDS should be deducted?
What is the percentage of TDS deducted? Any person making a specified payment mentioned under the Income Tax Act is required to deduct TDS at the time of making such specified payment. But if a person is a paying individual or HUF whose books are not required to be audited then no TDS is to be deducted
Whereas in the case of rent paid by individuals and HFCs in excess of Rs 50,000 per month, a deduction of 5% is required to be made even if the individual or HFU is not liable to a tax audit. Further, such individuals and HUFs are liable to deduct TDS at 5% who do not apply for TAN.
Your employer deducts TDS at applicable income tax slab rates. Banks deduct TDS at 10% as per the TDS deduction chart.
And can deduct 20% if your PAN is not known. TDS rates for most payments are prescribed in the Income Tax Act and TDS is paid based on these specified rates.
If you submit investment proof (to claim the deduction) to your employer and your total taxable income is less than the taxable limit – you will not pay any tax.
And hence no TDS should be deducted from your income. Similarly, if your total income is below the taxable limit, you can submit Form 15G and Form 15H to the bank so that they do not deduct TDS on your interest income.
If you have not been able to produce proof to your employer or if your employer or bank has already deducted TDS and your total income is less than the taxable limit.
So you can file your return and claim a refund of TDS.
Do you know what is Form 26AS?
Hope you have understood what is TDS, then you also need to understand how TDS is linked to your PAN card. TDS deductees are linked to PAN numbers for both the deductor and the deductee. If TDS has been deducted from any of your income then you need to go through Tax Credit Form 26AS.
This form is a consolidated tax statement available to all PAN holders. Since all TDS are linked to your PAN card, this form lists the details of TDS meaning deducted from your income by each deductor for all types of payments made through your PAN linked to your PAN All TDS are reported.
Income tax is also paid directly by you in this form – in the form of advance tax or self-assessment tax. Therefore, it becomes important for you to quote your PAN correctly, wherever TDS may be applicable to your income.
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