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All about TDS Compliances – TDS Payment, Statements, and Certificates

The concept of “Tax Deducted at Source”, commonly known as TDS, has been introduced to ensure regular flow of revenue to the Government. The payer of income is required to deduct tax from certain payments at the prescribed rates and deposit it to the credit of the Central Government within the prescribed time.

Earlier, the Income-tax Act had 36 provisions that require deduction of tax at source from various payments. The number is increased to 38 by the Finance Act, 2021. A few transactions or payments may be covered under multiple provisions, and to find out the relevant provision, the deductor will have to solve a complex theorem.

An assessee, who is required to deduct tax at source, fails to deduct the same, he shall be treated as an assessee in default. Consequently, he shall be liable for payment of interest and penalty for the same. Further, 30% of the respective expenditure on which such tax was required to be deducted shall be disallowed while computing the income taxable under the head “Profit and gains from business or profession”.

Deposit of TDS

Once an assessee has deducted tax at source, the next step is to deposit it to the credit of the Central Government. Tax is required to be deposited by the following due dates:

TDS statement

Once the assessee has deducted tax at source and deposited the same to the credit of Central Government, the next step is to furnish a statement of tax deducted at source. Such statement is required to be furnished by the following due dates:

Note: Due date for furnishing TDS Statement for the 4th quarter of the Financial Year 2020-21 has been extended till 15-07-2021

TDS Certificate

The person, who has deducted tax at the source, shall issue a TDS certificate to the deductee specifying the amount and rate of TDS in addition to other prescribed particulars. The TDS certificate shall be downloaded from the website of TRACES after processing of TDS Statement. Such certificate is required to be issued by the following due dates:

Nature of tax deducted at source Form Due dates
Tax deducted on sale on immovable property under section 194-IA Form 16B Within 15 days from the due date of furnishing challan
Tax deducted on rent under section 194-IB Form 16C Within 15 days from the due date of furnishing challan
Tax deducted under section 194M Form 16D Within 15 days from the due date of furnishing challan
Tax deducted on Salary Form 16 Up to 15th June of the relevant assessment year
Other tax deducted Form 16A Within 15 days from the due date of furnishing statement [See Note]

Note: Due date for furnishing the TDS certificate for the 4th quarter of the Financial Year 2020-21 has been extended till 31-07-2021 for Form 16A and 30-07-2021 for Form 16.

About The Author

Naveen Wadhwa is a Chartered Accountant. He looks after the editorial work of digital content at Taxmann Alliance. He has experience of 10+ years in Income-tax and International Tax.

Naveen holds expertise in advisory and litigation related to Income-tax and International Tax matters. He has extensive experience working with diversified industries like real estate, technology, publication, education sector, hospitality, manufacturing, etc. He writes and speaks regularly on Income-tax issues for renowned media houses.