Understanding TDS: Can Someone Explain How to Calculate It and the Criteria Involved?

shibin11.1989@gmail.com
Can anyone help me with how to calculate TDS and what the criteria are?

Regards,
Shibin.
anil.arora
Please go to the following links to get a sample tax calculation sheet and discussions by members:

https://www.citehr.com/283855-tds-de...structure.html

https://www.citehr.com/253397-how-de...-earnings.html

https://www.citehr.com/30218-tds-cal...ncome-tax.html

What is TDS:

TDS, or "Tax Deduction at Source," is an indirect method of collecting tax from income sources. Income sources refer to earnings from several financial instruments and business transactions such as the sale of property, interest income from banks on savings, commissions and incentives, any kind of payment received for contracts and services, vendors, dividends, and awards or prizes earned in the form of money.

It is mandatory as per Indian Income Tax rules that companies, as well as working professionals who earn above the aforementioned sources, deduct TDS from the payments they make.

Not everyone can deduct TDS. To do so, one must have a 10-digit alphanumeric "Tax Deduction Account No (TAN)", which is required for all persons liable to deduct or collect tax at source.

There is no uniform rate for TDS deduction. Depending on the source of earnings, it can range from 1% for sale proceeds to 30%, as follows:

Particulars of Payments and Rate of Deduction:

01) 1% – TDS on Individual, HUF contractor, or sub-contractor

02) 2% – TDS on Other contractor, sub-contractor except individual and HUF

03) 2% – TDS on Rent on plant and building

04) 10% – TDS on Interest Income

05) 10% – TDS on Rent on land, building, and furniture

06) 10% – TDS on Insurance commission (for other assessee except company)

07) 10% – TDS on Insurance commission company

08) 10% – Commission and brokerage

09) 10% – TDS on professional and technical fees

10) 20%/30% – TDS on Payment to NRI

11) 30% – TDS on Winning from Lottery, crossword, puzzles

12) 30% – TDS on Winning from horse races

For more information, please visit and read the document at: http://incometaxindia.gov.in <link fixed>

To download ITR forms: Income Tax India
If you are knowledgeable about any fact, resource or experience related to this topic - please add your views. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone. Join To Contribute