1 TDS Overview

Tax Deducted at Source (TDS) is a crucial mechanism for ensuring timely tax collection by the government. It not only simplifies the tax payment process but also ensures accountability in financial transactions. Whether you're an individual, business owner, or employer, understanding and complying with TDS regulations is essential for staying on the right side of tax laws.

2 What is TDS?

TDS, or Tax Deducted at Source, is a system where tax is deducted at the point of income generation. It is applicable to various payments such as salaries, interest, rent, commissions, and professional fees. The deducted tax is then deposited with the government, helping streamline the tax collection process and preventing evasion.

3 Why is TDS Important?

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  Timely Revenue Collection:

  TDS ensures that taxes are collected at the source of income, providing the government with a steady revenue stream.

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  Simplifies Tax Payments:

  Reduces the burden of paying taxes in bulk at the end of the financial year by breaking it into smaller, periodic deductions.

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  Compliance with Tax Laws:

  Non-compliance with TDS provisions can lead to penalties and interest. Regular deductions help you avoid such risks.

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  Transparency in Transactions:

  Helps maintain accountability and transparency in financial dealings for individuals and businesses alike.

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  Easy Filing and Refunds:

  Deducted TDS is reflected in Form 26AS, making it easier for individuals and businesses to file income tax returns and claim refunds when applicable.

4 Types of Payments Where TDS Applies

TDS is applicable to a wide range of payments, including:

5 TDS Rates and Thresholds

TDS rates vary depending on the nature of the payment and the status of the recipient (individual, company, or non-resident). It's important to stay updated on the applicable rates and thresholds to avoid errors in deductions.

6 Section 195 of the Income Tax Act: TDS for NRIs

Texcure Compliance provides TDS Services to the buyer of the property from NRI or Foreign National. If an NRI or Foreign National wants to sell their property in India to an Indian buyer, instead of 1%, the buyer has to deduct 20% from the sale value according to the applicability of cess and surcharge. For example:

The deducted amount must be deposited with the government, and a challan is issued to the seller (not Form 26QB, and not immediately but at the end of the quarter). If the seller feels the deducted amount is excessive, they can apply for a lower TDS rate with the department. Texcure Compliance helps you in this process to reduce the TDS amount, ensuring more cash remains in the hands of the seller.

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7 How We Help with TDS Compliance

Our expert team provides end-to-end TDS solutions to ensure smooth compliance with tax laws:

8 Why Choose Us?