TDS (Tax Deducted at Source) is an indirect system of deduction of tax according to the Income Tax Act, 1961 at the point of generation of income. Tax is deducted by the payer and is remitted to the government by him on behalf of the payee.
A TDS Return is a quarterly statement that has to be submitted to the Income Tax Department of India. Submitting TDS Return is mandatory if you are a deductor. It has details of TDS deducted and deposited by you.
It is the duty of the person who is making payment to someone for specified goods or services to deduct TDS and file a TDS return. The specified payment includes salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. The person who deducts TDS is called a deductor and the person whose tax is being deducted is called deductee.
TDS is not required to be deducted by Individuals and HUF except for those whose accounts are required to be audited u/s 44AB i.e. whose gross receipts in the preceding financial year in case of business is more than 2 crore (AY 2017-2018) or 1 crore ( AY 2016-2017) and in case of profession 50 lakhs ( AY 2017-2018) or 25 lakhs (AY 2016-2017).
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