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TDS (Tax Deduction at Source)
Awareness Programme for Deductors
By :
Income Tax Office-TDS
Faizabad

Concept of TDS
 TDS is an arrangement to deduct taxes from the very source of
Income.
 A person (Deductor) making specified payments to other person
(Deductee) is liable to deduct tax as per provisions of Income-Tax
Act and remit the same into account of Central Government.
 The deductor is also liable to issue Certificates of TDS to the tax
payers on prescribed forms and within specified time.

Benefits of TDS
(For The Government)
• It helps in regular collection of taxes.
• Ensures a flow of regular income to the government for the ongoing
development work.
• It also helps to keep a check on tax evasion.
(For The Public)
• Reduces the burden of lump-sum tax payment altogether. It helps in spreading
the entire tax payment through out the year, which makes it easier for
the taxpayer to pay his tax liability.
• Offers an easy mode of tax payment to the payer.

Payments covered under the scheme of TDS
(Relevant for State Government DDOs)
• Salary (Sec.192)
• Payments to Contractors and Sub-contractors (Sec.194C)
• Commission or Brokerage (Sec.194H)
• Rent (Sec.194I)
• Fees for Professional or Technical Services (Sec.194J)
• Payment of Compensation on acquisition of certain
immovable property (Sec.194LA)

TDS RATES (Prescribed Percentage)
Section Particulars Rates No TDS/Threshold
192 Payment of
Salary
Normal Slab
Rates as per Old
Regime
Upto Rs. 2.5 lakh- Nil
2.5 Lakh to 5 Lakh- 5%
5 Lakh to 10 Lakh- 20%
Above 10 Lakh- 30%
Normal Slab Rates
as per New Regime
Upto Rs. 3 lakh- Nil
Above 15 Lakh- 30%

TDS RATES
Section Particulars Rates No TDS/ Threshold
194H
Commission (other than
Insurance commission or
brokerage)
2% If amount paid or payable
during the financial year
does not exceed Rs. 15,000/-
194I Payment of Rent
a) Plant & Machinery
b) Land/ Building/
Furniture/Fitting
2%
10%
If amount paid or payable
during the financial year
does not exceed Rs. 2,40,000

TDS RATES
Section Particulars Rates No TDS/
Threshold
194J Payment of Fee for
a) Professional
Services
b) Technical
Services
10%
2%
If amount paid
or payable
during the
financial year
does not
exceed Rs.
30,000
194LA Compensation on
compulsory
acquisition of any
immovable property
(Other than
agriculture land)
10%
If amount paid
or payable
during the
financial year
does not
exceed Rs.
2,50,000/-

Responsibilities of the DDO
Obtain & quote TAN
Obtain PAN of Deductee
Deduct Tax at prescribed rates
Deposit amount of TDS in Govt A/c
File Quarterly Statements within prescribed time
Issue Certificate Form 16/16A to the Deductee

• Issue a circular among staff members of your charge
calling for Income Tax Computation Statement for the
current financial year.
• The circular preferably be circulated in the month of
March itself i.e. beginning of the year and before the
preparation of the pay bill for the month of March.
• Request the officers / officials to submit the IT
statement within 15 days.

 Ensure /Verify-
• The evidences towards the claim of deductions / losses.
• PAN furnished by the officer/official.
• Ensure the correctness of the PAN with the Income Tax portal.
www.incometaxindia.gov.in -> Know Your PAN | TAN | AO.
• The deductions claimed in the IT statement are as per the provisions
contained in Income tax Act.
 Compute the Income Tax Liability and reconcile the same with IT
Statement furnished by the Officer/Official.
 Calculate Average Rate of Tax and Deduct the Income Tax from the salary
payment.
 Issue Form 16/16A through TRACES Portal.

Dates for Payment of TDS in Govt. Account
• On the same day where the tax is
paid without production of an income
tax challan.
• On or before 7 days from the end of
the month in which the deduction is
made if the tax is deposited through
challan.

Rule 26C inserted by the Income-Tax (Eleventh Amendment)
Rules, 2016, w.e.f. 1-6-2016. (Refer Form 12 BB)
Sr num Nature of claims Evidence or particulars
1 House Rent Allowance. Name, address and permanent
account number of the landlord/
landlords where the aggregate rent
paid during the previous year
exceeds rupees one lakh.
2 Leave travel concession or
assistance.
Evidence of expenditure.
3 Deduction of interest under
the head "Income from
house property".
Name, address and
permanent account number of the
lender.
4 Deduction under Chapter
VI-A.
Evidence of investment or
expenditure.

Section 80CCD: (NPS Contribution)
Deduction in respect of contribution to pension
scheme of Central Government
 80CCD1:
Deduction of contribution in the computation of his total
income-
 Ten per cent of his salary in the previous year; and
 For the purposes of this section, "salary" includes dearness
allowance. (Salary= Basic = DA)
 This deduction is within the limit of section 80C and for the
amount allowed as a deduction under sub-section (1) or sub-
section (1B), no deduction with reference to such amount
shall be allowed under section 80C.

 80CCD(1B) :
 A deduction of maximum fifty thousand rupees shall be
allowed of the whole of the amount paid or deposited in the
previous year in his account under a pension scheme
notified or as may be notified by the Central Government.
 This is in addition of the limit/amount of deduction claimed
u/s 80C.
 No deduction under this sub-section shall be allowed in
respect of the amount on which a deduction has been
claimed and allowed under sub-section (1)
 80CCD2:
 A deduction of employer’s contribution in the computation of his
total income, of the whole of the amount contributed by the
Central Government [or the State Government] or any other
employer as does not exceed-
 (a) fourteen per cent, where such contribution is made by the
Central Government [or the State Government];

7
• Where PAN of the deductee is not quoted or
wrongly quoted, TDS has to be made at 20% or
applicable rate, whichever is higher (Section
206AA).
When to Deduct Tax at Source at
Higher Rate

As per Income-tax Department Notification
no. 41/2010 dated May 31, 2010, in case of a Government
office where tax has been paid to the credit of Central
Government without the production of a challan, the PAO
/ CDDO / DTO or an equivalent office is required to file Form
24G.
Applicability of Form 24G

• It is mandatory for each PAO / CDDO / DTO to have an AIN for
filing Form 24G.
• AIN is the identification of the PAO/ CDDO/DTO for the purpose of
filing Form 24G.
• Every Accounts Office shall furnish one complete, correct and
consolidated Form 24G every month having details of all type of
deduction / collection viz. TDS-Salary / TDS- Non Salary / TDS-
Non Salary Non Residents / TCS.

Due dates of filing of Quarterly TDS
statements by deductors:-
S.No Quarter Due date
1st Qtr Apr-June 31th July
2nd Qtr July-Sep 31th Oct
3rd Qtr Oct-Dec 31th Jan
4th Qtr Jan-Mar 31th May
Due Dates of TDS Return Filing
Every Person responsible for deduction of tax under chapter
XVII-B requires to file the appropriate Statement within due
date prescribed by Income Tax Rule 31A under section 200(3)
as given below:-

Provisions of Filing TDS Returns
Various
Payments
In case the person
deducting tax : is a
company or a Govt.
Department
In case the person
deducting tax is
any other person
Time-limit for
submission of return
by the person
deducting tax
Salary Form No. 24Q and
Form No. 27A
Form No. 24Q 31st of the subsequent
month of the quarter
ending.
(31st May in case of last
quarter)
Payment
(other
than
salary) to
a resident
Form No. 26Q and
Form No. 27A
Form No. 26Q 31st of the subsequent
month of the quarter
ending.
(31st May in case of last
quarter)
16

Issuance of TDS Certificates {Sec. 203}
Sr. No. Form No. Periodicity Cut off Date
1 16 for
Salary
Annual 15th
June of following
financial year
2 16A
Other
than
salary
Quarterly Within 15 days from due
date of furnishing the
TDS statement under rule
31A
17

Consequences of
Non Compliance
of TDS Provisions

Consequences of failure to deduct or pay the TDS
(Payment of Interest - Sec 201)
S. No. Reasons Effects
1. Non deduction
or short
deduction of
Tax at source
Penal interest @1% for every month or part of
month from the date on which such tax was
deductible to the date of deduction.
2. Non payment
of Tax
deducted at
Source
Penal interest @1.5 % for every month or part
of month from the date on which such tax was
deducted to the date of deposit of TDS.

Fee/Penalities Summary
Fee for Late Filing
 Section 234E: In case of late filing,
deductor will be liable to pay by way of
fee of Rs 200 for every day during which
the failure continues.
*

Penalty for failure to deduct
tax at source
• Section 271C: On failure to deduct
the whole or any part of the tax as
required may lead to imposition of a
penalty u/s 271C of the I.T. Act of
sum equal to amount of tax which
such person failed to deduct.

Penalty for Late filing
• Section 271H: Penalty for late filing/Non filing/
furnishing incorrect information in TDS statement as per
section 271H is minimum Rs. 10,000 to Rs. 1,00,000
which is applicable for :-
1. Not filing the TDS statement within specified
time limit.
2. Furnishing incorrect information in quarterly
statement of TDS.

Penalty for failure to furnish
a certificate
Section 272A(2)(g) –
If any person fails to furnish a certificate
as required by section section 203 (i.e.
Form 16 or Form 16A) he shall be liable to
pay a sum of Rs.500 for everyday during
which the failure continues (w.e.f.
01.04.2022).

Prosecution
Section 276B- If a person deducts tax at source but fails to
pay the same to the credit of Central
Government as prescribed (Within 60 days), he can be
sentenced to rigorous imprisonment for a
term not less than 3 months and extendable
upto 7 years with fine as well.

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