TAX DEDUCTABLE AT SOURCE:

Presented By: Shivam Gupta 03 Sourabh

Modgil 44

Meaning:Means that the person responsible for

making payment of certain incomes to the income earners deduct income tax at the prescribed rates on such incomes before payment is made to them.

Amount so deducted at source shall be deposited by the deductor in the Govt. Treasury with in the prescribed limit.

Deductor:

It is a person/company who is liable to deduct the TAX at source, from the payment being made to the party. Deductor is also termed as Employer in cases where the payments are under Salaries.

Deductee:

It is the person, from whom the tax is being deducted or accrued for deduction.

Payments subject to deduction of tax at source:Salaries- Section 192Interest on securities- Section 193Dividends - Section 194Interest other than interest on securities-

Section 194AWinnings from lotteries or crossword puzzles-

Section 194B

Winnings from horse races- Section 194BB.Payments to resident contractors- Section

194C.Payment to insurance commission- Section

194D.Payment to non-resident sportsman or Sports

Association-Section 194EPayment of commission etc. on sale of lottery

tickets- Section 194G

Salaries:

Compute the income salary as discussed under the head “Income from Salaries”.

Rates of Tax: The following rates of Income Tax for deduction of tax at source from salaries and computing advance tax during the year.

Rules for deduction of tax at source from salaries:

Who will deduct the tax?When tax will be deducted?Salary from more than one employer?Payment of salary in foreign currency?Exemption regarding house rent allowances.

Interest on Securities:

The person responsible for paying income by way of “Interest on Securities” to a resident or a domestic company shall, at the time of payment thereof or at the time of credit of such interest in the books of account, whichever is earlier.

Rate of Tax: 10%

Tax shall not be deducted at source from any interest payable on:

National Saving Certificate.Debentures issued by a co-operative society

or any public sector company and which are notified by the CG.

National Development Bond

Dividend:

Who will deduct tax at source? - The principle officer of company.

On which income deduction is to be made?- On dividends u/s 2(22)(e)

Rate of TDS: 10%

Interest other than “interest on securities”Who will deduct the tax at source?An individual or HUF, who is required to get

his account audited u/S44abA company, firm, co-operative society, AOP,

BOI etcPayment made to whom? A resident of India

or domestic companyRate of tax-10%

Winnings from lotteries or crossword puzzles etc.:The person responsible for paying any

income to any resident or domestic company by way of winnings from lottery or crossword puzzles or card game or any other game of any sort of an amount, exceeding Rs.10000 at the time of payment, deduct income tax thereon at the rates in force.

Rate of tax: 30%

Important points:When the prize is given partly in cash and

partly in kind income tax will be deducted with reference to the aggregate amount of the cash prize and the value of the prize in kind.

When the prize is given in installments, the tax will be deducted only at the time of actual payment of each installment.

Winnings from horse races:Tax will be deducted at source by

bookmakers race clubs from winnings from horse races where the payments exceed Rs 5000.

Rate of Tax- 30%

Payments to Contractors:Income tax will be deductible at source from

payments made by the following to any resident contractor for carrying out any work in pursuance of a contract between the contractor and:

The Central Govt. or any State Govt. Any local authority.Any company

Any statutory corporation.Any co-operative society.Any trust.Any registered society.Any firm.

Insurance commission:Any person responsible for paying to a

resident or domestic company any income by way of insurance commission will be required to deduct income tax from such income at the rate of 10% during the financial year.

No TDS shall be deducted at source if such incomes does not exceed Rs 20,000 in the financial year.

Payment to non-resident sportsman or Sports Association:The person who is responsible for paying any

one of the following incomes to a non residential sportsman who is not a citizen of India or to a non resident sport association or institution, shall, at the time of credit of such incomes to the account of the payee or at the time of payment thereof, whichever is earlier, deduct income tax thereon @10plus educational cess@3%.

If he is a sportsman, any income received or receivable by him by way of:

Participation in India in any game,Advertisement.If it is a sports association or institution,

amount guaranteed to be paid or payable to it in relation to any game or sport played in India.

Payment of commission etc. on sale of lottery tickets:The person who is responsible for paying,

any commission, remuneration or prize exceeding Rs 1,000 to a person who is stocking, distributing, purchasing or selling of lottery tickets shall deduct tax at source thereon @10%.