{"id":19561,"date":"2020-11-12T15:47:24","date_gmt":"2020-11-12T10:17:24","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=19561"},"modified":"2025-02-19T18:20:08","modified_gmt":"2025-02-19T12:50:08","slug":"tax-deducted-at-source-and-tds-certificate","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/tax-deducted-at-source-and-tds-certificate\/","title":{"rendered":"What is Tax Deducted at Source &#038; TDS certificate?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Tax Deducted at Source forms a major part\nof direct taxation mechanism applicable to various heads of an income to\ncollect taxes at the very source, i.e., at a time of payout. <\/p>\n\n\n\n<p>The TDS deducted right at the source helps to check the tax evasion and also relieves the taxpayer from a burden of paying taxes at the end of the financial year. Hence, TDS certificate allows both steady inflow of revenue to the government and reduced financial strain for tax payers.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/tax-deducted-at-source-and-tds-certificate\/#TDS_Certificate_us_203_of_the_Income_Tax_Act\" >TDS Certificate u\/s 203 of the Income Tax Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/tax-deducted-at-source-and-tds-certificate\/#What_are_the_Types_of_TDS_Payment\" >What are the Types of TDS Payment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/tax-deducted-at-source-and-tds-certificate\/#Advantages_of_Tax_deducted_at_source_TDS\" >Advantages of Tax deducted at source (TDS)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/tax-deducted-at-source-and-tds-certificate\/#Important_Points_to_Remember_Before_Deducting_TDS\" >Important Points to Remember Before Deducting TDS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/tax-deducted-at-source-and-tds-certificate\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"TDS_Certificate_us_203_of_the_Income_Tax_Act\"><\/span>TDS Certificate u\/s 203 of the Income Tax Act<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to <strong><em>Section 203<\/em><\/strong> of the <strong>Income Tax Act<\/strong><sup><a href=\"https:\/\/www.incometaxindia.gov.in\/pages\/acts\/income-tax-act.aspx\"><strong>[1]<\/strong><\/a><\/sup>, everyone who deducts tax at source must required to furnish the TDS certificate to the respective deductee specifying an amount deducted as tax, along with all other particulars.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">In case of Salary Income<\/h3>\n\n\n\n<ul>\n<li>The employer must provide <strong><em>Form\n16<\/em><\/strong> to employee specifying an amount of tax deducted at source.<\/li>\n\n\n\n<li>The form must have all the\nparticulars related to computation, deduction and the payment of tax.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">For Non-Salaried Cases<\/h3>\n\n\n\n<ul>\n<li>The <strong><em>Form 16A<\/em><\/strong> is given by a deductor mentioning all details of tax deduction, computation, and payments.<\/li>\n\n\n\n<li>The TDS certificate requires to be issued to a deductee <strong><em>within 15 days<\/em><\/strong> of due date of <a href=\"https:\/\/corpbiz.io\/tds-return-filing\" title=\"TDS Return Filing\"><strong>filing TDS return<\/strong><\/a><strong>. <\/strong><\/li>\n\n\n\n<li><strong><em>TCS Certificate<\/em><\/strong> (Tax Collected at Source): The certificate that contains an amount of TDS collected and deposited with a tax department. It is issued by <strong><em>Form 27D<\/em><\/strong>.<\/li>\n\n\n\n<li>Depositing TDS to the Central Government<\/li>\n\n\n\n<li>The deductor requires depositing TDS to central government by making a payment by NSDL using physical form which can be processed in authorized bank branches. <\/li>\n\n\n\n<li>The payment can be made online by an official portal of NSDL using <strong><em>Challan 281<\/em><\/strong> and by routing payments by net banking. <\/li>\n\n\n\n<li>The amount deducted as tax requires to be deposited before filing TDS return.<\/li>\n\n\n\n<li>An e-payment is compulsory for all assesses who becomes liable for audit under <strong><em>Section 44AB.<\/em><\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Types_of_TDS_Payment\"><\/span>What are the Types of TDS Payment?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" width=\"1024\" height=\"768\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/What-are-the-Types-of-TDS-Payment-1024x768.png\" alt=\"Types of TDS Payment\" class=\"wp-image-19562\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/What-are-the-Types-of-TDS-Payment-1024x768.png 1024w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/What-are-the-Types-of-TDS-Payment-300x225.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/What-are-the-Types-of-TDS-Payment-768x576.png 768w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/11\/What-are-the-Types-of-TDS-Payment.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Tax_deducted_at_source_TDS\"><\/span>Advantages of Tax deducted at source (TDS)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>It helps to prevent the tax evasion.<\/li>\n\n\n\n<li>The TDS deductions take place in the financial year; it is an effective mode of revenue inflow to government.<\/li>\n\n\n\n<li>It widens tax collection base.<\/li>\n\n\n\n<li>It is a way to share a responsibility of tax collection between the government and the deductors.<\/li>\n<\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> Two new sections (194K &#038; 194-O) have been inserted in Income Tax Act by Finance Minister in Union Budget 2020. Section 194K has been introduced for TDS on dividend income from shares and mutual fund units by putting an end to (DDT) Dividend Distribution Tax. Also section 194-O has introduced TDS at 1% for sale of goods and services by an e-commerce participant facilitated by an e-commerce operator.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Points_to_Remember_Before_Deducting_TDS\"><\/span>Important Points to Remember Before Deducting TDS<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Section 192 to 194L of the\nIncome Tax Act can be referred to complete list of expenses and sources of\nincome under TDS.<\/li>\n\n\n\n<li>If the individual does not fall\nunder income tax slab, then he\/she can furnish the Form 15G or Form 15H to a\ndeductor as the declaration in advance for non-deduction of tax at source.<\/li>\n\n\n\n<li>Form 15H is for the senior\ncitizens.<\/li>\n\n\n\n<li>Form 15G is for all other\nindividuals.<\/li>\n\n\n\n<li>TDS is applicable to every type\nof income beyond a certain limit.<\/li>\n\n\n\n<li>TDS is deducted in accordance\nwith the income tax slab rate for salaried individuals.<\/li>\n\n\n\n<li>For other deductees, the TDS is\ndeducted at the specified percentage for each income type.<\/li>\n\n\n\n<li>Everyone who deducts TDS\nrequires having TAN (Tax deduction and collection Account Number) in accordance\nwith the provisions of Section 203A of Income Tax Act.<\/li>\n\n\n\n<li>TAN is a mandatory requirement\nfor filing of the TDS returns. Moreover, it must be mentioned on a tax\ndeduction certificate issued.<\/li>\n\n\n\n<li>TDS deductions are linked to\nPAN (Permanent Account Number). Hence, it is essential to have PAN details of\nthe deductee to deduct tax at source.<\/li>\n\n\n\n<li>Every deductee requires presenting\nthe TDS certificate to adjust an amount of tax deducted against a total tax\npayable. <\/li>\n\n\n\n<li>TDS details must be checked by\nTax credit Form 26AS which is available to all PAN holders.<\/li>\n\n\n\n<li>The consolidated tax statement gives\nthe clear details of TDS deducted on various types of payments.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>TDS rates for non-salaried payments made to\nresidents and TCS rates for a specified receipt have been reduced by <strong><em>25%\nof existing rates<\/em><\/strong>. The new rates must only be applicable to payments\nother than salary, such as payment for contract, rent, professional fees,\ninterest, commission, dividend, brokerage, etc. <\/p>\n\n\n\n<p>The reduced rates shall be applicable for remaining part of <strong>FY 2020-21,<\/strong> i.e., from <strong><em>14th May 2020 to 31st Mar 2021<\/em><\/strong>. It measure expected to result in the liquidity release of <strong><em>Rs. 50,000 crore<\/em><\/strong>.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-tds-return-filing-in-india\/\">\nAll about Benefits of TDS Return Filing in India\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tax Deducted at Source forms a major part of direct taxation mechanism applicable to various heads of an income to collect taxes at the very source, i.e., at a time of payout. The TDS deducted right at the source helps to check the tax evasion and also relieves the taxpayer from a burden of paying [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":19565,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[237],"tags":[1213],"acf":{"service_id":"51"},"authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/0.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":8627,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19561"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=19561"}],"version-history":[{"count":13,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19561\/revisions"}],"predecessor-version":[{"id":68804,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/19561\/revisions\/68804"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/19565"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=19561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=19561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=19561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}