SOME FAQ ON TDS/ TCS
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Q1. What is TDS/ TCS?
TDS (tax deduction at source)/ TCS (tax collection at source) is a means of collection of Income Tax. Under TDS, certain amount of tax is deducted by a payer from the income of payee according to applicable law of the income tax. Whereas under TCS, certain amount of tax is collected by a seller in addition to sale consideration from the buyer according to applicable law of the income tax. Such TDS/ TCS is to be paid to the government within specified time period by the payer / seller.
Q2. What is motive of TDS/ TCS?
The followings may be motive behind TDS/ TCS:-
- Collection of taxes as soon as a person earns any income.
- Identification of income earned.
- Identification of expenses incurred (which must be justified according to income of an assessee)
Q3. Which payments are liable for TDS?
The following payments are certain types of payments which are liable for TDS subject to certain conditions.
- Salary (section 192)
- Interest on securities (section 193)
- Dividend (section 194)
- Interest other than interest on securities (section 194A)
- Winnings from lottery or crossword puzzle and winnings from horse races. (section 194B and 194BB)
- Payment to contractor (section 194C)
- Insurance commission (section 194D)
- Payment in respect of life insurance policy (Section 194DA)
- Income from NSS (Section 194EE)
- Commission On Sale Of Lottery Tickets (Including Winnings) (section 194G)
- Brokerage or commission (section 194H)
- Rent (section 194I)
- Payment for transfer of Immovable property (section 194 IA)
- Payment for technical or professional services (section 194J)
- Compensation on compulsory acquisition of certain immovable property (Section 194LA)
- Payment to Non – Residences (section 195)
Apart from above mentioned payments, some other payments are also liable for TDS under sections 194E, 194F, 194LB, 194LBA, 194LBB, 194LBC, 194LC, 194LD.
Q4. Which activities are liable for TCS?
The following activities are liable for
- Sale of Alcoholic Liquor for human consumption
- Sale of Tendu Leaves
- Sale of Timber obtained under forest lease or other mode
- Sale Other forest products
- Sale of Scrap
- Sale of Mineral, being coal or lignite of iron ore
- Contract for use of parking lot, toll plaza, mine or quarry for the purpose of business
- Sale of bullion in cash (more than Rs. 2 lacs)
- Sale of jewellery in cash (more than Rs. 5 lacs)
- Sale of other goods or services in cash (more than Rs.2 lacs)
- Sale of motor vehicle (value exceeding Rs.10 lacs)
Q5. What are due dates for deposit of TDS/ TCS?
- In case TDS deducted by an office of Government:
- Without Challan (i.e. through Book entry) : on Same day of deduction
- Through Income Tax Challan: within 7 days from end of month of deduction
- in case TDS deducted by others:
- Income or amount is credited/ paid in month of March: 30th April
- Other case: within 7 days from end of month of deduction
Q6. What are penalty for non deduction/ non payment of TDS/ TCS timely ?
1.the Deductor shall be deemed to be an assessee in default. Hence liable for penalty u/s 221 upto amount of TDS
2.The expenses, on which TDS was required to be deducted, may be disallowed.
3.The Deductor shall be liable to pay interest @ 1% for every month or part of month on the amount of tax not deducted.
4.The Deductor shall be liable to pay interest @ 1.5% for every month or part of month on the amount of tax not deposited after deduction.
5.Where the tax has not been paid after it is deducted, the amount of the tax together with the amount of simple interest thereon shall be a charge upon all the assets of the person.
Q7. Is any return to be filed for TDS/ TCS?
Yes, the quarterly returns of TDS/ TCS are required to be filed in electronic form.
| Sr No. | Form No. | Applicability | Due date |
| 1 | 24Q | TDS u/s 192 (salary) | Q1: 31st July Q2: 31st October Q3: 31st January Q4: 31st May |
| 2 | 26Q | TDS other than salary | |
| 3 | 27Q | TDS in respect of deductee is Non-resident | |
| 4 | 27EQ | Tax Collection at source | Q1: 15th July Q2: 15th October Q3: 15th January Q4: 15th May |
| 5 | 26QB (challan cum return) | TDS u/s 194IA | 30 days from end of month of deduction |
Q8. What are penalty for non – filing or late filing of TDS/ TCS return?
The person who fails to file the TDS/ TCS return shall be liable to pay a fee of Rs.200 per day. However, total fees so payable shall be limited to the amount of TDS/ TCS.
Q9. What is TDS/ TCS certificate?
Every person deducting/ collecting TDS/ TCS is liable to issue a certificate to the person whose Tax is deducted/ collected. Such certificate is to be issued in the following manner
| Sr NO. | Nature | Form No. | Periodicity | Due date |
| 1 | Payment in nature of Salary | Form 16 | Annual | 31st May |
| 2 | TDS on other payments | Form 16A | Quarterly | 15 days from due date of TDS return |
| 3 | TDS u/s 194IA | Form 16B | 15 days from due date of form 26QB | |
| 4 | TCS | Form 27D | Quarterly | 15 days from due date of TCS return |
Q10. What are provisions in regard to form 15G/ 15H?
The following person are eligible for submission of form 15G/ 15H:
15G: any person other than company or firm
15H: a resident individual having age 60 or more
The following Conditions to be satisfied for submission of form 15G/H:
- Tax on estimated total income should be NIL
- in case of form 15G : income payable, for which such form is submitted should not exceed maximum amount not chargeable to tax.
- PAN is mandatory for submission of form 15G /15H
The followings are Nature of income for which form 15G/H can be filed:
| Section | Particulars of income | Remark |
| 194 | Dividend other than referred to in section 115-O | Applicable for individual only |
| 194EE | Payments in respect of deposits under National Savings Scheme | Applicable for individual only |
| 192A | Payment of accumulated balance due to an employee. | -- |
| 193 | Interest on securities | -- |
| 194A | Interest other than on securities | -- |
| 194DA | Payment in respect of life insurance policy other than exempted amount. | -- |
| 194I | Payment of rent | -- |
The person receiving form 15G/15H is liable to electronically file the details of such forms received.
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