Who Is Liable to Deduct and Pay TDS Under Income Tax Act?


Who Is Liable to Deduct and Pay TDS Under Income Tax Act?

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Contractors working on projects for governments at various levels, local bodies and co-operative societies are liable to get TDS deducted. This can include services such as catering or advertising also. The TDS deduction rate is 1% for individuals and HUF and 2% for entities other than Individuals or HUF (like companies/firms). No TDS is deducted for an individual receiving payment upto Rs 30,000 in a single payment or upto Rs 100,000 in aggregate during the financial year. TDS is deducted only if the individual provides his/her PAN number.

Those receiving rental income from letting out of land, building, plant & machinery or furniture and fittings are liable to get TDS deducted. It is advisable to provide your PAN card to the landlord or whoever is paying rent to avoid deductions at the time of payment. You can check your TDS credit in Form 26AS and AIS once the deduction is made by logging into your income tax efiling account.

Salaried class employees are provided with a TDS certificate in the form of Form 16 by their employers. It contains all the details such as the computation of tax, deduction and payment of TDS. Individuals, HUF and firms can claim refund of the tax deducted if their total tax liability is less than the amount of tax deducted. If you do not file your returns or the return is filed late, then you will be liable to pay interest at the rate of 1% per month on the undeposited TDS.

 

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