Answer Posted / ca. animesh kumar jain
The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. In respect of payments to which the TDS provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him to the credit of the Government. The following illustration will explain the TDS mechanism.
Illustration
Mr. Raja has made a fixed deposit with XYZ Bank. Annual interest on the deposit is Rs. 8,40,000. Will the bank be liable to deduct any tax from the interest paid to Mr. Raja?
**
Interest on fixed deposit is covered under the TDS mechanism and, hence, the bank has to deduct tax from interest and has to pay the net interest to Mr. Raja.
The rate of TDS on interest is 10% and, hence, the bank will deduct tax of Rs. 84,000 from the interest and will pay the net interest of Rs. 7,56,000 (i.e., Rs. 8,40,000 – Rs. 84,000) to Mr. Raja.
The TDS of Rs. 84,000 will be paid by the bank to the Government and Rs. 84,000 will be treated as prepaid tax of Mr. Raja and he can claim tax credit of Rs. 84,000 just like advance tax at the time of filing his return of income.
The above mechanism of deducting the tax at the point of generation of income is called TDS mechanism.
Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
what is cenvat credit? plz tell service tax interest rate and watz it procedure...
in case of vehicle hired for staff pick up & drop for 1 month or 1 year, TDS is applicable ? if yes then which code is mention in challan & which rate is applicable ? in case of vehicle orner is personal or company which rate applicatble ?
can penalty be imposed under sec 96 of vat act west bengalfor goods destroyed or damaged
how can I know the status of the service tax filing of my organisation when I don't have any details except St number. I want to know till what date the returns are filed etc as I have recently joined.
type of sale and purchase tax?
procedure to get Raw Material free of excise duty under Central Excise Act,
what is excise
Pls give a details knowledge of Income Tax (including TDS, TCS)duty paid online form no., due date, return form no. and due date, limit of turnover for auditing, procedure of auditing and income tax depreciation, etc.
what is the vat & cst rate with cst and without c form. TDS on salary how to deposti and which challan use for this
At present what is the rate of excise duty on sale of Weigh Bridge Machinery to out of state from Karnataka.
what difference in motvat & cenvat? and why this prepared?
WHAT IS TDS?SHOULD WE FILE TDS TO PURCHASE A THING .SHOULD WE PAY BOTH TDS &TCS FOR THE SAME THING
In an E1 trasaction, if the dealer fails to get the E1form from his supplier& submit it to the Sales Tax Authority, then how much will be the expected penalty from Sales Tax department, if the local tax of those item is 14.5%? Please Note: Dealer has submitted all other documents to sales tax including customer Cform expect E1 form. Kindly give us the valuable answer with the supporting CST circular number.
CERTAIN LIST OF EXPENSES ARE MENTIONED IN SECTION 35D regarding amortisation of such expenses........not included in the list are expenses like administrative expenses,consultancy fees etc...if these expenses are of revenue nature then well and good enough, problem taken care of.If it is not of revenue nature nor is it included in the list, how do u treat such expenses. Do u capitalise them by way of fixed assets or sunk costs or what do u do? any case laws that talk about expenses not mentioned in the section?
hi which form issue again ogs purches & sales ? which is the tax rat we issue c form?it's cst3% is avelabe to issue the c-form?