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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TDS (Tax Deduction at Source) is a system of collecting tax directly from payments like salary, rent and commissions. It is governed by the Central Board of Direct Taxes. 

The payer deducts TDS from such payments and deposits it to the Government account. TDS rates are set in the income tax act, and if the payee proves that their total tax liability is lower than the limit, then no TDS is required to be deducted.

The deductor can find out the correct rate and deduct accordingly, by going through the TAN (Taxpayer Identification Number) and PAN (Permanent Account Number) database. It is important for a deductor to verify that the PAN and TAN details are correct, otherwise it can lead to huge problems for them in future.

If the deductor doesn't deposit the TDS in time, they are liable to pay interest @ 1.5% every month from the date of deduction till it is deposited. This is in addition to a penalty equal to the amount of TDS that was deducted and not deposited.

If you want to check whether TDS has been deducted and deposited, visit the official website of the income tax department. You can login using your credentials and then see your Form 26AS under the 'My Accounts' tab. Alternatively, you can also contact your TDSdeductor to get the same information. However, remember that this information is not updated real-time, and it may take some time for it to reflect in your bank statement.

 

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