Following is the list of deductors who are liable to deduct TDS:
- Hindu Undivided Family
- Limited Companies
- Partnership Firms
- Body of Individuals
- Association of Individuals
Rate of TDS deduction:
Payments such as salaries, commission, professional fees, interest earned, rent etc. are subject to TDS deduction. Based on the type of income and amount of income earned, TDS is imposed at various rates. Thus, different kind of income has different TDS rates and the tax is imposed on the extra amount that is earned after a certain maximum threshold limit is attained. The rate at which TDS is imposed varies from 1% to 30% depending on the income that is taxed.
Method of TDS deduction
As commonly known, TDS is deducted on the payments made to the receiver. It means that the payments are done to the receiver after deduction of appropriate tax for the income in question. The amount of TDS that the receiver is liable to pay is deducted from the payment the receiver is liable to receive and the remainder is paid out. It is important to note that the liability to deduct TDS is of the deductor. For instance, in case of employer paying salary to employee, the employer is the deductor and the employee is the TDS deductee.
All About TDS Return
A TDS Return is a summary of all the transactions related to TDS made during a quarter. TDS Return is a quarterly statement which is submitted by the deductor to Income Tax Department. The statement shows a summary of all the entries for TDS collected by the deductor and the TDS paid by the deductor to the Income Tax Authority. The TDS Returns statement includes details like the PAN number of the deductor & the deductees, all the detailed particulars of the TDS paid to the government and the TDS Challan information.