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.

Note: Looking for the Best TDS Return Filling in Delhi/NCR? Get expert advice on the complete process of filing a TDS return online in India with Taxacadmy.

How is Section 44 AD beneficial to taxpayers, and should you choose this?

The Income Tax Department has brought in a provision of Section 44AD to provide relief to small taxpayers and low turnover taxpayers. Under this section, you will not have to create and maintain your book of accounts, and you will not have to conduct your audit. You will have to pay tax on 8% or 6% of your estimated turnover as your income.

Who is eligible to take advantage of Section 44AD?

This section can be availed only by an individual (proprietor), HUF, or partnership firm. The company and LLP will not get any benefit from this section. This section is only for a person associated with the business. If you are a doctor, lawyer, chartered accountant, or any other professional, you will benefit from Section 44ADA. Even if you are a commission or brokerage agent, you will not get the benefit of this section.

What will be the turnover limit in Section 44AD, and who will be accepted by the small taxpayers?

Only small taxpayers, i.e., those whose turnover is less than two crores in a year can benefit from this section. If your turnover exceeds two crores during the year, you cannot take advantage of this stream.

How will the income on turnover be calculated?

A certain percentage of your turnover will be considered as your income. At present, 8% is applicable to cash turnover and 6% on digital turnover, i.e., turnover through banking. For example, if you have an annual turnover of 50 lakhs and cash turnover is 40 lakhs, and the turnover through banking is ten lakhs, then 8% above 40 lakhs and 6% above ten lakhs will get the estimated income.

40 Lakh x 8% = 3, 20,000/-

 10 Lakh x 6% = 60,000/-

 Total Income = 3, 80,000 /-

Thus, assuming your total income to be 3, 80,000, the tax liability will come out on it.

Note:- If your actual income is more than this, then you will have to show your actual income, and if your actual income is less than this, then you have two ways:-

1.      Get your audit done and show your actual income. or else

2.      At least 6% or 8% of your income should be taxed.

 

Will there be any discount on expenses?

No, there will be no discount on expenses. If you consider this estimated 8% or 6% share as your income, you will not be provided any discount. Suppose there are business expenses of yours, i.e., purchases, labor expenses, salary, worn-out expenses, bank interest, or any other expenses. In that case, it will be assumed that all those expenses have been provided to you and you will not get any further discount on that.

5-year lock-in period

It is important to note that once you take advantage of this section, you will have to file your return in this section for five years. Also, even if you don't take advantage of this section once, you will not be able to take advantage of it for five years. Either you show your income in Section 44 AD for five years, or you show income without it for five years. One year 44AD and the next year the simple rule, you can't take advantage of.

Is it beneficial for you?

Yes, Section 44AD is very beneficial for you because you do not have to maintain your account; only at the end of the year do you have to pay tax on some part of your turnover by declaring it as income. You can avoid various types of questions answered by the Income Tax Department, and at the same time, you do not have to conduct an audit. Only a small return has to be filed at the end of the year, and it is similar to the composition scheme of sales tax. If you are a proprietor, a HUF, then your TDS deducting responsibility also ends.

Will other incomes be taxed separately?

Other than your business, other than yours, i.e., the income of interest or income from rent or a gift from someone or any capital gain. All of them will have to be taxed separately, and they will not get any exemption in this section.

Exemption of tax slab and Section 80C 

Under this section, if you text, you will get the benefit of income tax flap and the exemption of Rs 1.5 lakh under 80C separately, as well as if you are also eligible for a rebate of Rs 5,000/2,500 under Section 87A, the same will be granted to you separately. If you make any big transaction, you must ask your income tax advisor. There may be some errors in this blog, and if it harms you, it will not be our responsibility. These blogs are designed only for your information.

 What are the benefits that the Government offers in Taxation?

1.      The Employee Provident Fund (EPF) & Voluntary Provident Fund (VPF)

The Employee Provident Fund (EPF) is a money-making fund invested by employees. It was purchased to provide employees with the security of their finances and stability. In addition, to EPF, employers and employees both receive 12% of the employee's salary as a dearness allowance and the basic compensation. The deductions are derived from the employee's earnings on an ongoing basis. This helps in saving an enormous amount of money over the long term.

On the other hand, the Voluntary Provident Fund is available to employees who contribute to this PF account. There is no set percentage of the salary contribution.

Public Provident Fund (PPF)

The Public Provident Fund is a continuous contribution option. It gives a good return on investment and the amount of interest. The interest earned and the profits are tax-free in the sense of Income Tax.

The edge of VPF or PF employees who have added 15 years are eligible for the tax in the vicinity. The tax will fall by Section 80C of the Savings Tax.

3.     Equity Linked Savings Scheme (ELSS)

The Equity Linked Savings Scheme provides three years of lock-in time. If a person invests in ELSS funds, they receive two benefits: the accumulation of wealth and tax deduction over time.

In addition, employees who invest in equity mutual funds are tax-free.

Each year you can get a savings of up to Rs. 46,800 tax-free through the investment of ELSS mutual funds. Also, you can claim tax credits in the amount of Rs 1, 50,000 per year.

4.      Premiums for Life Insurance

If you have to pay a sum of money for life insurance with the Life Insurance Company is called Life Insurance Premium. In the LIP, it is possible for you (employee) can make any life insurance premium and also be eligible for tax savings. It could be to themselves or for children or spouses under section 80C. The premiums for many plans can be paid in months, quarters, or years.

If you have multiple policies, you may get a lump sum of taking all the premiums. However, many believe that the costs of LIC policies can be claimed as an income tax deduction. But it's not!!

Let's say that you're paying LIC policies premiums to private companies. If that is the case, you're entitled to tax benefits, and it is subject to section 80C tax savings.

5.      Principal Repayment of Home Loans

If you obtained a home loan through the bank, you'd have to pay it back in two portions. First, you'll pay the interest component of the loan amount. In addition, you have to pay the total amount of the loan, which is known as the principal amount. When you pay back the principal amount, you will be able to claim the tax benefit under Section 80C.

6.      Infrastructure Bond

Recently, the government has developed a brand new clause specifically for the deduction of investment tax. It's available in the form of Tax-Free Infrastructure Bonds. For example, if you put up 1 lakh in this scenario, you'll get an exemption of approximately Rs. 20,000.

7.      National Savings Certificate(NSC)

In reality, you purchased the NSC for a 6-year time to help save taxes. You could get the tax deductions in section 80C of tax savings in this scenario.

8.      Pension fund that is below section 80CCC

There is a particular sub-section in Section 80C. It's called Section 80CCC and is specifically designed for pension funds investments. It allows you to enjoy the advantages of a tax deduction on the investment. It can be found in any private or public financial firm's pension fund.

9.      Tax Saving Bank Fixed Deposit

Another option is to avoid tax by saving it using the Special Fixed Deposit. The deposit is provided through the institution, and the tax-saving fixed deposit will have five years minimum long-term.

10.  Senior Citizen Saving Scheme-2004

This Senior Citizen Saving Scheme is designed for senior citizens only. You can receive a good amount of compensation for the amount they contribute. Furthermore, the investment made is eligible to tax deduction.

11.  Post Office Time Deposit (POTD)scheme

The Post Office Time Deposit scheme gives you a range of investment options. However, only one scheme currently offers the 7.5 percent iterative rate. The rate can be used to benefit from Tax. However, there is no other plan in the scheme of POTD which is suitable for tax deductions.

12.  United Linked Insurance Plan( ULIP) investments

In essence, investing within ULIP is a mix of insurance and investment. It provides you with a deduction of tax that is covered by Section 80C. But, the person must be identified by heavy fees and periods in long locks. They differ from the one ULIP scheme to the following ULIP scheme.

13.  Stamp duty and registration charges for the home loan

Let's suppose that you bought the property with an unsecured loan or by yourself. In this scenario, you are entitled to advantages on tax. These tax benefits cover the cost of registration fees and stamp duty imposed on buying a house. The benefits are as per Section 80C Tax Saving.

14.  Costs for Children's Education

You may be eligible to receive tax benefits from tuition fees you pay to the educational institution or school. However, in section 80C, you must maintain receipts to claim tax benefits.

What is the reason taxpayers must be tax-paying?

Many people think that tax payments are an expense, but it's not that way, and it is an essential contribution by an entity that is legal or individual. Taxes can be used in many ways:

·         Nation Building

·         Initiation of various Government schemes for the general population

·         Improvements in healthcare and education

·         As accountable citizens, we need to pay taxes on time to ensure our country's sustainable and equitable growth.

Visit Website: https://www.taxacadmy.com/tds-return-filing.html

All you need to know about Taxation

India is a vast and heavily populated country. Therefore, to ensure the daily needs of the immense people, the government came up with a tax-exempt contribution- "Tax."

Taxes help the government fund different projects, and these projects boost the nation's economy.

Tax payments provide various benefits to individuals. It offers:

·         Development of Nation

·         Improvements to Framework

·         Social development and,

·         Initiatives to improve the welfare of the nation

What is taxation?

Taxation is a process by which the government of a country collects funds from its citizens to fund its expenses. Taxation applies to all forms of mandatory taxation, from income to capital taxes. Taxation is distinct from the other forms of tax, and it doesn't require authorization and isn't directly tied to any created service.

According to the most recent budget plan, the government will be giving a significant push toward digital currency. It will be focused on providing essentials to those in the middle and the lower classes while doing so will aid youngsters to be self-sufficient.

What are the different types of taxes?

There are two main types of taxes. There are two types of Taxes: Direct Tax and Indirect tax. Additionally, these two kinds of tax are classified into sub-categories. These are listed below:

1.      Direct Tax

If a legal entity or an individual directly pays tax to the government, it is called Direct Tax. Taxes are not shared among individuals and legal bodies. In addition, this Central Board of Direct Taxes ignores direct taxes. Here are the categories of Direct Tax:

Income Tax The Income Tax is one form of tax that is directly assessed on the individual's income. The individual now pays it to the government. Anyone who earns income in any form is required to pay income tax. However, to pay the tax, various tax levels apply to considerable amounts of income.

·         Apart from individuals, tax is also paid by legal organizations. This includes all people in Artificial Judicial, the body of Individual (BOI), Hindu undivided family. They have local companies, officials, corporations, and those belonging to the Association of Persons (AOP).

·         Capital Gains This is where the government imposes the Capital Gains Tax on property sales. The tax is also applied to the gains made from investments. The investment can be made for either short- or long-term capital gains. It covers all types of exchanges in the opposite direction to its price.

·         Securities Transaction Tax: The tax of Securities Transaction is levied on :

a)      Stock marketing and trading in securities, as well as

b)      Securities that are traded via the Indian Stock Exchange

c)      It is also based on the price of the share.

·         Priority Tax Prerequisite Tax refers to the tax used to pay for the employee's rewards and benefits. The intention behind the allowances and help is to be determined for the business.

·         Corporate Tax: Corporate Tax is classified as an income tax paid by the company. It is based on the various tax slabs that are part of the business's income.

Several sub-categories make up the corporate tax:

A)    The Dividend distribution tax: It is taxed on dividends paid to investors by the corporation. It is applied to the net or gross income from an investment made by an investor.

B)    Fringe Benefit Tax FBT is imposed on the employee receiving fringe benefits from their employer. This is a reference to home costs and travel expenses, transit costs, allowance, and so on.

·         Minimum Alternative Tax This tax is controlled under IT Act section 115JA. IT Act section 115JA. According to the provisions of the law department, the IT department is paid by the business.

2.      Indirect tax

When a person pays taxes on products and services, it's called an indirect tax, and taxes are added to goods and services. The government collects indirect tax via GST (Goods and Service Tax). If you require any assistance connected with Goods and Service Tax and GST, you may hire Tax Academy.

What are the advantages of taxes?

When a person pays tax, it will benefit both the taxpayer and the government. Taxpayers benefit from tax benefits can be derived from such methods as:

a)      Simple acceptance of Visa application

b)      Simple application for credit cards as well as loans

c)      Indemnity settlement in cases of accident and others

d)     The payer's Tax can reduce the tax if you meet the eligibility requirements.

On the other hand, for the government, Tax benefits can be derived in various ways, including:

a)      The development of facilities like a perk, government schools, etc.

b)      The economy is growing.

c)      The improvement of the level of living and much more.

The Government uses the Tax to fund various functions, among them including:

·         Welfare and Development Projects

·         The Defense budget is a significant expense

·         Scientific Research

·         Public insurance for the insured

·         Schemes for Pensions

·         Government operation

·         Public Health

·         Public utilities, etc.

·         Taxes are imposed on various income sources like income, wealth, salary and service, rental of property, and more.

Visit the website: https://www.taxacadmy.com/tds-return-filing.html

Importance of a tax consultant for your Business | Tax Academy

Have you thought of starting any business but are not able to take the initiative to start because you are not able to understand how to manage the business. If you are not able to face the difficulties and problems in business or are facing ITR or tax-related issues even before starting your business. So you can consult a tax advisor/ tax expert. A tax expert is a tax consultant who specializes in tax planning, tax law, and compliance. Tax advisors are on hand regarding changes in tax law. Therefore, those taxpayers. 

A tax consultant helps taxpayers prepare tax returns and work closely with them during the year to help reduce tax liability. A tax advisor is available to all, not just rich people. So before starting any business, you should know the importance of a Tax consultant for your business and must consult him once.

How to file income tax

Meaning of ITR- ITR i.e. ‘Income Tax Return’ is a form to be filled out to give the details of your previous financial year to the government. ITR means a legal document, in which a citizen gives complete details of his income to the government, from which sources he earned money, how much he invested, how much he saved, and how much tax he paid. ITR can be filled both offline and online. However, for taxpayers who need to fill in more data, offline mode is the only option. Actually, only 40 minutes are available to file ITR in one go. It is okay for common taxpayers to file ITR online.

Procedure to file ITR step by step

· First of all login to https://www.incometax.gov.in/iec/foportal. Here go to e-File>Income Tax Returns>File Income Tax Return.

· After that choose assessment year, filing type, and status.

· Click on Proceed.

· Select ITR and select the reason for filing it. If the payment is made by filling in the required information, then pay it.

· Submit the return by clicking on the preview.

· Click on proceed for verification.

· Click on Verification Mode.

· E-verify ITR by filling EVC/OTP. A signed copy of ITR-V sends CPC for verification.

After filing ITR, keep the necessary documents with you, and do not forget to verify. The most important thing is that taxpayers filing Income Tax Return (ITR) without digital signature i.e. without e-verification through electronic mode have to verify it within 120 days of ITR uploading, remember not to file ITR-V within 120 days. But the return can be declared as ‘not filled’ i.e. invalid.

Income tax consultants in a very short period of time

While starting a new business a tax as a consultant is very important. A tax advisor or tax specialist will help tell you what’s really going on in your bank books and how you need to manage your accounts and taxes. It is important to hire an experienced Income tax advisor who will advise you in the field of taxes and can take all your stress and advice on your finance. An inexperienced income tax consultant may give you the wrong advice which can lead to a legal dispute. Something that can have a negative impact not only on your business’s finances but also on your reputation.

Conclusion- if you are one of the businessmen who wants a One who wants to grow in his business or take it to the top of the heights, either you have started the business. But are not able to plan it or are unable to manage the business. So we can suggest you contact an income tax consultant in Delhi. An income tax company will provide you tax advisor who will suggest to you how you can manage your business and run it smoothly. With the help of an income tax advisor, your business will touch heights and help you to protect yourself from business losses.