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The Full form of TDS is Tax Deducted at Source. TDS is an indirect method of tax collection by the government to prevent tax evasion. In this article we will discuss about TDS kya hai, TDS ka Full Form and why TDS is deducted and what is the refund process of TDS.
If the remaining income is deducted after deducting tax from the income of a person, then the income which is deducted as tax is called TDS. This amount is deposited with the government after deducting TDS. The government collects tax through TDS. TDS is deducted on many types of Income Sources. Such as interest or commission received on an investment.
TDS is a method of depositing Income Tax by the Income Tax Act 1961. Which the government collects Advance. TDS is only one form of Income Tax. This is one way of payment tax. Apart from this, Advance Tax and Self Assessment Tax are also methods of payment.
There are different types of TDS rates in the Income Tax law for different types of payment. The rate is charged according to the kind of payment in TDS. It depends on the payment.
Your TDS is deducted from your Salary. But do you know how it is cut, then you are told about it below.
Income and expenditure such as salary, interest from bank, house rent and payment of commission etc. are covered under TDS. Some money is deducted while making payment, this is called deducting TDS. The Deductee already knows about this.
The company which deducts TDS is called Deductor. And whose TDS is deducted is called Deductee. TDS is deducted on many payments like- Interest, Salary, Dividend, Commission, Rent etc. TDS is deducted on the salary given by the employer to his employees.
Let us explain by example how to remove TDS. By understanding this example, you can remove your TDS. We can calculate it. Suppose the Earned Income you have in a Financial Year, then the taxable income in your Earned Income is 50 thousand rupees. And a firm named X has deducted 20 thousand rupees while paying you.
And another firm named Y has deducted TDS of 25 thousand rupees from the total income while paying you. So the total TDS deduction will be 45 thousand rupees. And your total taxable income is 50 thousand rupees. From that, you reduce 45 thousand, meaning you have to pay only 5 thousand rupees.
TDS does not benefit only the government. Rather, it also benefits the Income Earners. So, know about these benefits of TDS −
If you pay tax, then our own country develops. This brings money to the government. And it helps our development.
This gives the government regular income. Which helps the government to organize its spending and order.
Its biggest advantage is that it stops tax evasion. And those who have more income will not be able to steal tax.
Through TDS, not only job occupants pay tax, but those who make a good income in some way, they pay tax.
The TDS deducted by the employer will have to be deposited in the Central Government account before the due date and file their tds Return within the due date.
If not doing so, interest and penalty can be imposed on the employer. In addition, the employer will not get tax exemption for the amount on which TDS has not been deducted or deposited after deducting TDS.
The employer will be charged a fee of Rs 200 per day until TDS is deposited and penalties ranging from a minimum of Rs 10000 to a maximum of Rs 100000 may be levied.
And if the due date is a holiday, then TDS can be deposited by the employer the next day. To cut TDS, the employer must have a TAN number (Tax Identification Number).