Who Is Liable to Deduct and Pay TDS Under Income Tax Act?
Who Is Liable to Deduct and Pay TDS Under Income Tax Act?
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The Income tax act requires that anyone who is liable to make payment of specified type of income should deduct tax (called TDS) and deposit it into the government's account. The person who does this is called the 'deductor'. If he doesn't do it, then the deductee can face a lot of trouble and may even be punished by the government under various sections of the Income-tax Act.
Payments which are liable to TDS include commission or brokerage, fees for technical services, rent, professional fee etc. The rate at which the tax is deducted depends on the nature of the payment.
Contractors undertaking work for construction of projects for the government at various levels, local bodies, co-operative societies etc are also liable to deduct TDS. The contractors should obtain TAN and quote it on all documents pertaining to TDS.
Employees are also liable to get TDS deducted by their employers. The amount of TDS that gets deducted is determined by the applicable income tax slab rates. You can check the TDS that gets deducted by your employer by viewing Form 26AS.
Once the TDS has been deducted, it must be deposited with the government in the specified time period. A TDS return must be filed by the deductor stating the details of the payments made, the amount of TDS deducted and the taxes paid. The due date for filing the returns is the 7th of the month following the quarter in which the TDS has been deposited.
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