Income tax returns (ITR) filing: What is tax deducted at source
Income tax returns (ITR) filing: For collections of income tax, several rules have been enunciated in Indian Income Tax Act of 1961, and Tax Deducted at Source (TDS) is one of such provisions. The TDS is managed by the Central Board for Direct Taxes (CBDT). Assessees are required to file quarterly returns to CBDT, as the returns state the TDS deducted and paid to government during the quarter. Tax Deducted at Source (TDS) is of critical importance for you; all you need to know in brief:
For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called as “Tax Deducted at Source”, commonly known as TDS. Image source: Reuters
Under the tax deducted at source (TDS) system tax is deducted at the origin of the income. Tax is deducted by the payer and is remitted to the Government by the payer on behalf of the payee. Image source: PTI
The provisions of tax deducted at source (TDS) are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. Image source: PTI
In respect of payments to which the tax deducted at source (TDS) provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him to the credit of the Government. Image source: Reuters