The article gives a basic understanding of TDS and how it is calculated in various categories of income levels.
TDS is an abbreviation for Tax Deducted at Source. TDS means collecting tax from a person’s income like rent, asset sales, dividends, etc. It is essential to know that several sections are associated with Income tax law. As a result, there are different TDS rates applicable and TDS Waiver on FD. The nature of the payment varies in accordance with different cases. How are such TDS amounts calculated?
As a responsible citizen, you must know that the Ministry office declares a financial budget at the end of each year. The Finance minister makes a declaration to make the consumers understand the limits of tax deductions. However, it is important to know that TDS slabs vary largely according to income variations. Careful monitoring of the released budget within the assessment year should be done to have a clear understanding.
TDS Rate for the FY2022-23
As per the sections given, there are specific categories of income defined by the Government of India, wherein TDS must be filed as per the requisite percentage. For instance, as per section 194 G, which can include the income or commission earned from the sale of the lottery tickets, the TDS deducted can be 5% of the total income tax. On the other hand, section 194 H, which includes commission earned through brokerage, can have a TDS entitlement of 5% on the total income tax. If an individual is paying a rent of a certain amount against a building or land 10% deduction of TDS is applicable as per directives. If you rent out plant and machinery, the TDS amounts can be 2% of the total income tax.
TDS Rates Applicable to Non-Resident Indian
It is interesting to note that TDS deductions apply to Non – Resident Indians. As per section 194 N, an individual needs to address TDS while withdrawing cash from the bank while ITR is not filed. 2% of the total income tax amount can be deducted as TDS. Again, as per section 194 O, on selling e-commerce ventures, the business firm is entitled to a TDS amount of 1% on the income tax. As per section 194 P, even senior citizens are entitled to a tax deduction at source. However, expert tax consultants reveal that the amount being deducted can vary based on age brackets.
TDS Rates Applicable for the Resident of India (Other than a company)
It is essential to know that, under section 195, all the payers are included within the applicable tax slab. Thus, taxpayers in India are not classified according to status, individuals, Hindu Undivided Families or the corporates. Therefore, all payers are responsible for getting TDS deducted based on specific income categories as and when applicable. Making payments to the Non-Resident Indians (NRIs) or accepting payment can also increase the tax burden on individuals. Of course, TDS rates can vary based on the amount paid or transferred, for that matter of fact.
Calculate TDS on salary online with our TDS calculator. Find the accurate TDS calculation on salary effortlessly.
Applying for TDS Waiver on FD
If you are an Indian citizen and if you need a TDS Waiver on FD, you first need to know whether you are eligible for the same or not. You will have to first need a certificate under the IT law’s provision in India and then file an application in the 13 u/r 28 form number of the Income Tax Rules of 1962.
The Assessing Officer will review your application and provide the decision of whether or not to allow you to get the TDS Waiver on FD. This whole process is done within a month of receiving your application.
Your application will merely be a letter to the Assessing Officer, requesting the matter and providing all the necessary details of concern as follows –
- Your Residential status;
- Your PAN or Permanent Account Number and TAN or Tax Collection and Collection Number (TAN);
- All information related to the return/statement’s u/s 139 (Income Tax Return) under Section 200 (TDS Return) & 206C (TCS Return) that have become due but have not been filed;
- Information regarding returned Income or assessed income for the last 3 assessment years;
- Details of Tax payments for the last three assessment year;
- Copy of the Balance Sheet, SPL or the Statement of Profit & Loss Account and the Audit report of the last 3 years;
- Information of prevailing liability under the Income Tax Act of 1961;
- Assessment year to which TDS payment relates;
- Estimated total income of the previous year pertinent to assessment year;
- Total tax including interest payable on the total income;
- How the liabilities mentioned are to be discharged;
- Details of the payment of advance tax & tax already deducted or collected for the assessment year relevant to the current previous year till date i.e., Advance Tax, TDS & TCS;
- Details of income claimed to be exempt and not included in the total income mentioned above.
Once you have disclosed all the information mentioned above with the necessary evidence or supporting data for substantiating the information correctly, you will need to mention a date, and place and put your signature on Form 13.
Section 194S- TDS on Crypto Income
As per section 194 S, crypto currency-related transactions are included within the purview of TDS. Any capital gains or crypto transactions will be levied with a tax of 30% tax. An additional TDS will be imposed simultaneously, which will estimate 1% of the total value of the transaction. These are to be considered from July 1st, 2022 onwards.
Conclusion
Most individuals who come under the purview of tax deduction have to undergo a tax deduction at the source. This means on a lump sum amount of monetary transaction happening, an individual needs to pay additional tax. It relates to the tax burden applicable as per the income tax category. An individual can surf through government portals to understand the intricacies related to TDS: https://www.sec.gov/Archives/edgar/data/1051512/000105151221000009/tds-20201231_d2.htm We hope that this blog will come in handy whenever you would like to apply TDS Waiver on FD.
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