Other Knowledge About TDS

How do I know how much TDS has been deducted and whether it has been credited to me?

It is very simple to know how much TDS has been deducted and whether it is credited to you or not. Follow these simple process to find it out:

Step 1: Log on to Income Tax India eFiling website and click on the link “Register Yourself”

Step 2: Enter your details as per PAN and generate a password

Step 3: Once you have logged into the portal, click on the option “View Tax Credit Statement (26 AS)”

Step 4: After clicking on this link you will be directed to another website called TRACES (TDS Reconciliation Analysis and Correction Enabling System) where you can know about complete details of your tax deducted at source, advance tax paid and other important details.

26AS is a tax credit statement and covers all the amounts of TDS deducted by others. This might happen that someone has deducted your tax but the same isn’t appearing in your tax credit statements, which may be simply due to non-filing of TDS return by the deductor. In such cases, please make sure to obtain a TDS certificate as this will be an ultimate proof that your tax has been deducted at source.

Can I request tax deductions to not deduct tax from an amount and pay the whole amount to me?

Yes, if your gross income is well below the basic exemption limit then you can request the person who is responsible for TDS, to not to deduct tax on such income. For doing the same you have to options:

Apply to the Assessing officer under whose jurisdiction you fall in Form 13 to get a certificate approving deduction of tax at a lower rate or NIL rate.

Submit a declaration in Form 15G/15H in which you declare that your income is below the basic exemption limit during the financial year and tax is required to be deducted at source. This certificate has to be submitted every year and non-submission may lead to deduction of tax. Please note that Form 15G is for individuals and Form 15H is for senior citizens.

One major difference between Form 13 and Form 15G/15H is Form 15G/15H can be issued only by individuals assesses, whereas request in Form 13 can be submitted by any person i.e. individual, partnership firm, company, etc. to the ASSESSING OFFICER to get approval for deduction of taxes at lower or NIL rate.

How to apply for TDS refund?

There is this major misconception that refund of excess TDS is different from income tax refund and is called as TDS refund. However, the fact is that there is only one kind of return which you claim while filing your annual income tax return. Nowadays, it is compulsory to quote bank account details such as account number and IFSC code while filing of return and non-entering of such details will not generate a valid .xml file. In case if someone has deducted more tax than he should have deducted, then income tax refund will arise which can be claimed upon the filing of your annual income tax return.

For example, you own a goods transport agency and yours is a proprietorship firm. You presented an invoice of Rs 50,000/- and the person paying freight paid you a net amount of Rs 49,000/- (after deducting tax of Rs 1,000/- @ 2% under section 194C). In this case, the deductor deducted tax @ 2% instead of 1% and hence deducted excess TDS by Rs 500/-. This excess TDS will arise as a refund in the income tax return.

What is applicability of TDS on transactions of immovable property?

There are mainly two sections that prescribe for deduction of taxes on transactions related to an immovable property:

Section 194-I: Section 194-I requires for deduction of tax at source on rental income @ 10% for rent on land & building if the total amount of rent paid/credited or to be paid/to be credited exceeds the cap of Rs 1,80,000/- during a financial year. Please note that individuals and HUFs who are not subject to tax audits under section 44AB need not deduct tax at source on such rental expenses.

Section 194IA: Section 194IA came into effect from June 2013 which required deduction of tax by the transferee before making payment to transferor @ 1% of the consideration for immovable property. Any sum paid by way of consideration for the transfer of any immovable property (other than agricultural land) is covered under section 194-IA, provided the consideration for the transfer of an immovable property is not less than Rs. 50 lakhs.

Section 194LA: Section 194LA provides for deduction of tax at source @ 10% for the payment to be made to the assessee as a compensation on account of compulsory acquisition of immovable property. Please note that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed Rs 250000/-.

What are TDS rules?

There are certain rules set out by the tax authorities in regard to TDS, that if complied properly you will not end up paying penalty, interest, and fees.

Tax deduction rules: Tax is required to be deducted at the time of payment getting due or actual payment whichever is earlier. Delay in deduction of tax will attract interest @ 1% per month until the tax is deducted.

TDS payment rules: Every person is required to pay the tax deducted to the credit of government by the 7^th day of the following month. Non-payment or late payment of TDS will attract interest @ 1.5% per month until the tax has not been deposited.

TDS return filing rules: TDS returns are required to be filed timely on the 31^st day of July, October, January, and May during a financial year. Non-filing or filing of return after the due date will attract fees under section 234E @ Rs 200/- per day until the return is filed. However, this amount shall not exceed the amount of tax.