TDS Certificate: What is a TDS Certificate? TDS Certificates are documents issued to the assessee from whom the income TDS was deducted while making payment. It is generally issued by the authority or the person deducting the TDS of the assessee. Form 16, Form 16A, Form 16B and Form 16C constitute TDS Certificates. Usually, Form 16 is provided by the employer to their employees while Form 16A is issued by banks to their depositors when TDS is deducted on interest from the customer’s fixed deposits.
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Forms of TDS Certificate
Following is a brief overview of each TDS certificate along with their frequency and dates.
- Form 16 – It is the certificate issued on the TDS on salary payment. It is given yearly. The due date for this certificate is 31st May
- Form 16 A – It is the certificate issued on the TDS on non-salary payments. It is given quarterly. The last date is 15 days from the due date of filing the return
- Form 16 B – It is the certificate issued on the TDS on the sale of the property. It is to be provided on every transaction. The last date is 15 days from the due date of filing the return
- Form 16 C – It is the certificate issued on the TDS on rent. It is to be provided on every transaction. Moreover, the last date is 15 days from the due date of filing the return
As a form of tax collection, TDS is usually the income tax imposed at the time of making specific payments, such as professional fees, rent, salary, commission and even interest. The liability to pay TDS falls on the person receiving the income. However, provisions made by the government ensures that this tax is deducted in advance, hence, the recipient of the income receives the amount – viz the net amount after deduction of TDS. Moreover, the recipient will adjust the gross amount to their income and the TDS amount is adjusted against their tax liability.
For instance, imagine Organisation A, paying office rent of INR 1,00,000 to the owner of the property. The TDS that is required to be deducted is 10% of the rent, viz INR 10,000. Hence, Organisation A must deduct the stated TDS and pay the balance amount to the property owner – i.e INR 90,000. Therefore, the property owner receives the net amount of INR 90,000. However, the gross amount (INR 1,00,000) will be added to the income of the property owner and they can take credit of the amount already deducted by the organisation against their financial tax liability.
How do I Deposit TDS?
You can deposit TDS through the Challan No ITNS-281 from the government’s official portal. (https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp). On the left-hand side of the page, you will find Challan No ITNS-281. Select this link and proceed as per the instructions given on-screen.
When Should You Deposit the TDS to the Government?
Generally, the TDS must be deposited by the 7th of the subsequent month. For instance, if TDS was cut in June, then the same must be paid to the government by the 7th of the subsequent month – which is the 7th of July. However, for TDS on purchase or rent of the property, the due date is 30 days from the end of the month where TDS was deducted.
Conclusion on TDS Certificate
To sum up, Tax Deducted at Source (TDS) is a form of tax collection in India. Hence, when it is deducted, the relevant authority has to issue a TDS certificate. TDS certificates are required for filing Income tax returns, hence, it is a very important document.
FAQ’s on TDS Certificate
Question 1.
What is a TDS Certificate?
Answer:
A TDS Certificate is a document that is issued to the assessee from whom the income Tax Deducted at Source was deducted while making payment. It is generally issued by the authority of the person deducting the TDS of the assessee.
Question 2.
What are the various forms of TDS Certificates?
Answer:
Form 16, Form 16A, Form 16B and Form 16C are all considered as TDS Certificates
Question 3.
Is it mandatory to issue a TDS certificate?
Answer:
It is mandatory to issue a TDS certificate as per Section 203 of the Income Tax Act, 1961.
Question 4.
What does TDS mean?
Answer:
TDS is an abbreviation for Tax Deducted at Source. It is a form of tax collection in India and often levied on making specific payments, such as professional fees, rent, salary, commission and even interest.
Question 5.
Who can issue a TDS certificate?
Answer:
Generally, TDS Certificates are issued by deductors to deductees in respect of the tax deducted by them.
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