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TDS
- What is Form 16A?
- What is form 26AS?
- TDS Rates FY 23-24?
- Important TDS Rates FY 23-24 for interview?
- Who is contractor?
- What is Professional Service?
- Sample Invoice with TDS?
What is TAX DEDUCTED AT SOURCE (TDS) in tax?
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to a person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.
What is form 16A?
Form 16/ 16A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between deductor and deductee. It is mandatory to issue these certificates to Tax Payers.
What is form 26AS?
The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
Important TDS Rates FY 23-24 for deducting of tax deducted at source (TDS)?
| Nature of Payment(Transaction) | Section Code | Threshold Limit Till | Individual/ HUF | Others |
|---|---|---|---|---|
| Contractor – Single Transaction | 194C | 30,000 | 1% | 2% |
| Contractor – During the year | 194C | 1,00,000 | 1% | 2% |
| Commission or Brokerage | 194H | 15,000 | 5% | 5% |
| Rent on Plant & Machinery | 194-I(A) | 2,40,000 | 2% | 2% |
| Rent on Land & Building | 194-I(B) | 2,40,000 | 10% | 10% |
| Technical services, call centre Royalty for sale | 194J (A) | 30,000 | 2% | 2% |
| Fees for Professional Service Or Royalty | 194J (B) | 30,000 | 10% | 10% |
Others – Other than individual & HUF all the other recipients
Who is Contractor?
A contractor is any individual or organization that is hired to perform work on a contract basis.
Eg., Work which is completed in a stipulated period of time is contractor.
What is Professional Service?
Professional services are services that individuals or companies provide to customers to help them manage or improve a specific area of their businesses.
Eg., Legal services, Logistics, Accounting and bookkeeping, Project management, Marketing, consultancy, including: Digital marketing, Content marketing, Event management, Creative services, including graphic design, Client management, Architecture, IT services, and more
Sample Invoice with TDS?
Invoice received for Repairing works from A Company Ltd.
| Repairing material | HSN | 65000 |
| Labour | SAC | 35000 |
| Input GST @ 18% | 18000 | |
| TDS @ 2% | 700 | |
| A Company ltd | 1,17,300 |
For which amount TDS will be deducted by the Deductor?
TDS will be deducted on labour amount for Rs.35000 * 2%
After TDS deduction, what document should be provided by deductor to deductee?
Form 16A
where deductee can find the details of deduction amount?
Form 26AS