Tax Deducted at Source (TDS) is a mechanism for collecting income tax at the source of income. If you are an employer, company, or individual making specified payments above threshold limits, you are legally required to deduct TDS and deposit it with the government.
Who Must Deduct TDS?
- All companies (Indian and foreign) making specified payments
- Individuals and HUFs whose accounts are subject to audit under Section 44AB
- Government offices and departments
- Any person buying immovable property above ₹50 lakhs (Section 194IA)
Key TDS Sections and Rates
- Section 192: TDS on salary — as per applicable income tax slab
- Section 194C: TDS on contractor payments — 1% (individual) / 2% (others)
- Section 194J: TDS on professional fees — 10%
- Section 194A: TDS on interest — 10%
- Section 194H: TDS on commission — 5%
- Section 194IA: TDS on immovable property purchase — 1%
Lower Deduction: If your total income does not attract tax, you can apply for a lower or nil deduction certificate under Section 197 through the TRACES portal.
TDS Return Filing — Forms and Due Dates
- Form 24Q: TDS on salary payments — filed quarterly
- Form 26Q: TDS on all non-salary payments — filed quarterly
- Form 27Q: TDS on payments to non-residents
- Form 27EQ: TCS (Tax Collected at Source) returns
Quarterly due dates: Q1 (April–June): 31st July | Q2 (July–September): 31st October | Q3 (October–December): 31st January | Q4 (January–March): 31st May
Form 16 and Form 16A
- Form 16: TDS certificate issued to salaried employees — covers salary and tax deducted for the full year. Due by 15th June.
- Form 16A: TDS certificate for non-salary payments — issued quarterly within 15 days of the return due date.
Penalties for TDS Non-Compliance
- Interest under Section 201(1A): 1% per month for non-deduction, 1.5% per month for non-deposit after deduction
- Late filing fee under Section 234E: ₹200 per day until return is filed
- Penalty under Section 271H: ₹10,000 to ₹1,00,000 for incorrect or delayed returns
AR Associates provides complete TDS compliance services — deduction advisory, quarterly filing, and Form 16/16A preparation for businesses across Delhi. Contact us for a free assessment.