Tax Deducted Source (TDS)

Tax Deducted at Source (TDS) is one of the modes of collecting income tax in India at the very source of income, governed under the Indian Income Tax Act of 1961. It is controlled by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue in-charge of Indian Revenue Service (IRS).

Frequent sections in TDS:

Section 192- TDS on Salaries

TDS on salaries is deducted at the rate of the income tax slab for the relevant year. For the assessment year 2017-2018 the exemption limit for an individual is Rs 2,50,000.

Section 194B- TDS on Winning from Lottery, crossword or any game

A TDS of 30% is deducted from any amount received by the way of lottery, crosswords or any other game if the amount exceeds Rs. 10,000. For eg- any amount won at a game show will be liable to a deduction at the rate of 30% TDS.

Section 193- TDS on Interest on Securities

A TDS of 10% is to be deducted on interest from securities received if the limit of Rs. 5000 on debentures and 10,000 on others is crossed.

Section 194– TDS on deemed dividend

There is a 10% TDS deduction rate on income from dividend (definition given under section 2(22) (e)) if the limit of Rs. 10,000 is crossed.

Section 194EE- TDS on withdrawal of National Savings Scheme

There is a 20% TDS deduction on any withdrawal from the NSS if the limit exceeds RS. 2500.

Section 194I– TDS on rent

There is a rate of 2% on Plant and Machinery and 10% on Land and Building if the limit exceeds Rs. 1,80,000 per annum.