Who Is Liable to Deduct and Pay TDS Under Income Tax Act?
Who Is Liable to Deduct and Pay TDS Under Income Tax Act?
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As per Section 200 of the Income Tax Act, anyone who makes payment/credit in respect of specified types of income is liable to deduct tax at source from the amount payable or creditable and deposit the same with the Central Government. The person responsible for deducting tax is known as a deductor and the person who receives the payment after deduction of taxes is called a deductee.
If a person expects his/her total income during the year to be less than the exemption limit, they can request the payer not to deduct tax by submitting Form 15G or 15H. Individuals who are a part of affordable housing schemes can avoid TDS on rent payments by submitting Form 26QC to the landlord.
TDS rates are different for every type of income and are based on various factors. For instance, the rate of TDS on rent payments is 5% and it's 20% for the profit from fixed deposits.
Moreover, the TDS rate on dividend income is 10%. If you are an employee, the TDS on your salary is also calculated at the same rate as the employer deducts.
As a taxpayer, you can check the details of TDS deducted and deposited in your name by viewing your Form 26AS or Annual Information Statement (AIS). You can also file TDS refund claims from the online TDS refund portal. The TDS paid by you is always only a fraction of your actual tax liability as it's reported in the first place and the authorities can investigate the transaction at any time.
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