Money Guru: Income tax payer? Expert reveals why TDS is deducted from salary
The responsibility lies with employer not with employee to submit TDS, according to Income Tax norms, and in lieu of that a certificate is issued to the employee.
When we hear about TDS or tax deducted at source, common impression is that of money being taken from your earnings. This is deducted by employer from employee's income or by payer from payment amount being given to a payee. Thus, it is an advance tax submitted with the government. The responsibility lies with employer not with employee to do so according to Income Tax norms, and in lieu of that a certificate is issued to the employee, all these details are discussed on Zee Business show Money Guru with Tax expert Manish Gupta.
According to Gupta, when we hear about TDS, it appears as if amount is being deducted from our income, but this system has been evolved by the government to deduct a particular amount an employee's salary in advance and submit it with the Income Tax department so that the burden is reduced.
While filing Income Tax returns, employee needs to either show that TDS certificate or in the new system Form 16 is available online whose record is available with the I-T department and while submitting the TDS details, the deducted amount is compared and ITR is filed accordingly.
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Suppose, your total tax liability is Rs one lakh and Rs 80,000 has already been deducted as TDS from your salary, then you just need to submit the Form 16 and you will have to pay merely Rs 20,000 because rest has already been paid, according to Gupta.
According to him, there are certain other categories, barring salary, including contract payment, services payment, professional service and payment on assets or rent, or house or any other property. Further, Manish Gupta also informs that apart from this, if you purchasing any property, you can cut TDS; if you are an employee and paying rent of over Rs 50000 to your house owner, you have right to deduct 5% TDS, besides this can also deducted on royalty and in loan payment.
TDS can further be deducted by those individual whose books of account are audited, therefore, the responsibility of lies with payer or employer to deduct this amount and submit it with the income tax department.
Manish Gupta also informs that in case of winning a lottery, winning contest like Kaun Banega Crorepati, the winners receive the amount after TDS deduction.