What is TDS & Withholding Tax ?
TDS is a system of tax collection where a person or entity making a payment (the deductor) deducts tax at the source of income and remits it to the government. The person receiving the payment (the deductee) gets credit for the TDS amount against their total tax liability for the year.
Benefits
- Tax Compliance : Ensures timely payment of taxes to authorities.
- Reduced Tax Evasion : Minimizes the risk of tax evasion.
- Simplified Tax Filing : Streamlines tax reporting and filing processes.
Process / Steps
Identify Transactions
Determine which payments are subject to TDS or withholding tax.
Deduct Tax
Calculate and deduct the appropriate amount of tax.
Remit Tax
Pay the deducted tax to tax authorities.
Issue Certificates
Provide TDS certificates to the recipients.
File Returns
Submit TDS or withholding tax returns.
Documents required
- Transaction details and invoices.
- TDS deduction records.
- Remittance challans.
- TDS certificates.
Our Support?
- Compliance: Ensure accurate TDS deduction and remittance.
- Documentation: Prepare and issue TDS certificates.
- Filing: Assist in filing TDS returns.
- Consultation: Provide guidance on TDS regulations and compliance.
Frequently Asked Questions
The payer or employer is responsible for deducting TDS and remitting it to tax authorities.
TDS payments are generally due by the 7th of the following month.
Yes, TDS can be claimed as a credit against the total tax liability while filing income tax returns.