Tax Deduction at Source
Tax Deducted at Source (TDS) must be deducted at a specified rate on payments made to parties. The Income Tax department has prescribed certain expenses/payments on which a specific deduction rate is applied with a threshold limit. As per the Companies Act, 2013, LLPs, Firms, and Proprietorships also come under the TDS model.
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Our professional team will review the payments made to third-parties and calculate the applicable TDS to be deducted
Key Points to Remember
- The applicable TDS deducted must be deposited before the 7th of the succeeding month.
- Not complying to the TDS provisions is punishable under section 271 (C) of the Income Tax Act 1961, and attracts a penalty between INR 10,000 and INR 1,00,000. Section 276B is applied on those cases where the default is willingly done. The punishment is between 3 to 7 years of rigorous imprisonment.
- Every defaulter must pay interest on the delayed payment at the rate of 1.5% per month or part thereof.
- TDS Return must be filed before the 30th of the succeeding month.
- Expenses that are eligible for TDS are not allowed as expenses under section 40(a) when computing the total taxable income.