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Answer Posted / rashmi pamneja
Intro(why TDS)
Assessee pays tax in the assessment year on the income
earned in previous Year. Due to this rule the tax
collection is delayed till the completion of the
Previous year. Even sometimes people conceal there income
and the tax is not Paid at all. In order to overcome these
problems, government started deducted Some amount of tax
from the amount which is receivable by the assessee. The
amount of tax so deducted is called as “Tax Deducted at
Source”, i.e., TDS.
WHAT is TDS
T.D.S stands for tax deducted at source which literally
means the tax required to be paid by the assessee, is
deducted by the person paying the income to him.
Thus where any specified type of income arises or accrues
to any one, the Income-tax Act enjoins on the payer of such
income to deduct a stipulated percentage of such income by
way of Income-tax and pay only the balance amount to the
recipient of such income.
The tax so deducted at source by the payer, has to be
deposited in the Government treasury to the credit of
Central Govt. within the specified time. The tax so
deducted from the income of the recipient is deemed to be
payment of Income-tax by the recipient at the time of his
assessment.
Although it is worth mentioning here that whole of tax is
not deducted at the source but only
a certain part is deducted. In some cases it may also get
excess while in other cases it may be less then the total
tax liability. However, in case of salary the
total tax liability can be deducted at source itself. The
intention behind T.D.S is fast collection of tax and to
avoid tax evasion, by concealing income.
INCOMES SUBJECT TO TDS
income subjected to T.D.S. are salary, interest, dividend,
interest on securities, winnings from lottery, horse races,
commission and brokerage, rent, fees for professional and
technical services, payments to non-residents etc. It is
always considered as an Advance tax which is paid to the
government when we are being paid for provision made by us
in the form of products or services.
TDS rates for Financial Year 2010-11
FOR Male Tax (%)
For Income Between 0 to 1,60,000 0%
For Income Between 1,60,001 to 5,00,000 10%
For Income Between 5,00,001 to 8,00,000 20%
For Income above 8,00,001 30%
Surcharge 0%
Education Cess 3%
Female Tax (%)
For Income Between 0 to 1,90,000 0%
For Income Between 1,90,001 to 5,00,000 10%
For Income Between 5,00,001 to 8,00,000 20%
For Income above 8,00,001 30%
Surcharge 0%
Education Cess 3%
Senior Citizen Tax (%)
For Income Between 0 to 2,40,000 0%
For Income Between 2,40,001 to 5,00,000 10%
For Income Between 5,00,001 to 8,00,000 20%
For Income above 8,00,001 30%
Surcharge 0%
Education Cess 3%
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