What is tax deducted at source? Your income tax returns (ITR) filing explained in brief
What is tax deducted at source? Income tax returns (ITR) filing is expected from every Indian citizen who is earning through self-employment or working in an organisation. TDS steps are to be followed consistently on annual basis. Every tax that we pay on our income from other sources are an important revenue tools for government. The Income Tax Law has also provisioned a system to tax at the origin of income also. Here is what tax deducted at source is all about: Photo: PTI
1. Under the Tax deducted at source (TDS) system, salaried class taxpayers are issued instructions by the Income-Tax department to follow the requisite norms, and avoid using illegal means like under-reporting of income or 'inflating' deductions while filing their returns. Photo: PTI
2. Tax deducted at source (TDS) is all about quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. Photo: Reuters
3. This system is called as “Tax Deducted at Source”, commonly known as TDS. Under this system tax is deducted at the origin of the income. Photo: Reuters
4. Tax deducted at source (TDS) system indicates that a certain amount from a payment is cut by the payer and is remitted to the government by the payer on behalf of the payee. In respect of payments to which the tax deducted at source (TDS) provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him into the credit of the government. Photo: Reuters
5.The provisions under tax deducted at source (TDS) are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. Photo: PTI