All about TDS deductor and certificates of TDS

What is TDS?- The complete form of TDS is “Tax Deducted at Source.” TDS means that some percentage of your income is deducted by the payer who pays you the payment.

For example, the employee has to deduct TDS from the salary amount before paying the salary by the employer. After deducting the TDS, the balance salary has to be paid to the employee.

After deducting the TDS, the TDS amount has to be deposited by the employer in the government’s account, and after depositing it, the employer has to submit the TDS statement to the government.

In this TDS statement, the employer has to give information about the TDS deducted and the TDS deposited in the government account.

After deducting the TDS, the employer also has to issue a TDS certificate to his employees, proof that the TDS has been deducted from the salary by the employer. It has also been submitted to the government.

The time limit for submission of TDS amount, TDS statements, and issuing TDS certificates is also mentioned in the Income Tax Act, 1961. For not complying with all these provisions up to this time limit, the person who deducts TDS must face heavy interest and penalty.

What are TDS deductor and TDS deductive?

In any payment transaction, there are two persons. The first person is the one who makes the payment, and the second person is the one who receives the compensation.

As per the rules of TDS, whichever person makes the payment, the person is responsible for deducting the TDS. The person who deducts TDS is called TDS deductor in the language of income tax. The person who receives the payment, i.e., the person whose TDS is deducted, is the TDS deducted.TDS is deducted on what kind of payment and when. At present, many payments have been brought under the purview of TDS by the government; that has become mandatory to deduct TDS on all types of payments. If you don’t deduct TDS, you will be charged interest and penalty.

Some of the import payments that come under the purview of TDS –

• Salary

• Interest

• Dividend

• Professional fees

• Commission

• Brokerage

• Rent payment

• Lottery/Lottery TDS etc., on the amount won in online games.

However, TDS on all these payments will be deducted only if the payment exceeds the prescribed limit. TDS will not be deducted if payment is less than the prescribed limit.

What are TDS certificates?

After deducting the TDS of another person by any person, that person has to issue TDS certificates. These TDS certificates contain complete information about the TDS amount deducted, what rate the TDS has been deducted, and what kind of payment.

The TDS deductible can also verify the TDS amount mentioned in these TDS certificates with Form 26. Suppose there is any difference between the two. In that case, you should also contact the TDS deductor to know the reasons for these differences.TDS certificates are issued in forms such as Form 16/16A/16B/16C, etc. In which form you will be given a TDS certificate will depend on which payment your TDS will be deducted.

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