TDS Exemption Types, Procedure, Due Dates and Penalty

What is TDS?

TDS stands for ‘Tax Deducted at Source’. TDS is applicable to the numerous incomes received such as salaries, Interest received, Commission, Insurance Maturity, Immovable Property purchased, Rent Payment, Professional fees, etc. which is deducted when income either on Accrual Basis or on Receipt basis. Deductor will be the person who is making the payment is responsible for deducting the tax and depositing the same with the government.  

TDS Exemption

What is TDS Exemption?

When the person responsible for paying income to the payee does not exceed the prescribed limit beyond which the TDS is required to be deducted, it is defined as TDS exemption i.e, No TDS is required to be deducted until it crosses the specified Limit.

What are the types of TDS?

The following types are mentioned here below:-

  • Salary  sec.192:

Under Section 192, TDS is deducted at the time of actual payment of salary and not during the accrual of salary. Tax will also be deducted if your employer pays salary in advance to you or you receive arrears from him.

  • Maturity amount under LIC:

the rate of tax deducted at source (TDS) on life insurance policies where maturity proceeds are taxable @ 1%. Under section 194DA, TDS is applicable on all taxable payments made under life insurance policies if the total amount exceeds Rs 1 lakh

  • Bank Interest (sec .194A):-

The Payer/Deductor shall deduct TDS if the amount of such interest paid or credited OR is likely to be paid or credited in a financial year,  exceed 40,000 where the payer is

  1. A banking company or any bank or a banking institution
  2. Co-operative society engaged in the business of banking
  3. Post office (on deposit under a scheme framed and notified by Central Government).
  4. 5,000 in any other case
  • Brokerage or Commission sec 194H:-

TDS is required to be deducted at the time of payment or credit of such payment @5 % if exceed 15000  during the Financial Year.

  • Compensation on acquiring immovable property (sec 194 LA):-

On the compulsory acquisition of Immovable property by the Government then Tds is required to be deducted @10% if the Acquisition amount exceeds 250000.

  • Contractor payments(Sec 194C) :

If the payment made to Contractor exceeds 30000 at a time or exceeds 100000 during the financial year then TDS @1%/2% is required to be deducted as the case may be

  • Insurance Commission (sec 194D ):-

If the Insurance commission or other Remuneration   received by Broker /Agent etc exceeds 15000 then TDS is required to be deducted @5%

  • Payment of rent( sec 194 IB):-

For an individual/HUF paying rent of more than Rs 50,000 per month, it is now necessary to deduct tax at source @ 10%.

  • Professional or Technical Fees(sec 194 j):

 Under this section, when payment is made or likely to be made  during the financial year exceeds RS.30000 then Tds is required to deducted @ 10% for Professional or Technical Services

Step-by-Step Procedure to Upload TDS statements

Here is a simple guide to uploading your TDS statements on the official website of the Income Tax Department:

  1. Visit On the right side of the page, you will see the ‘Registered User?’ followed by the ‘Login Here’ option.
  2. Click on the aforementioned option and fill in your login information before clicking on ‘Login’. Your TAN will be your user ID.
  3. Now, you will have to select ‘Upload TDS’.
  4. A form will appear and you will have to choose the right details before clicking on Validate’ once the details have been selected.
  5.  Then one has to validate your returns using either DSC or EVC.

TDS Payment Due Dates for FY 2019-20

TDS payments due dates for TDS Payment filing for FY 2019-20:

Quarter Period Due Date for filing
Quarter 1 1 April 2019 to 30 June 2019 31 July 2019
Quarter 2 1 July 2019 to 30 September 2019 31 October 2019
Quarter 3 1 October 2019 to 31 December 2019 31 January 2020
Quarter 4 1 January 2019 to 31 March 2020 31 May 2020

Penalty for Late Filing TDS Return

Some of the penalties levied by the Income Tax Department for the failure to submit or defaults in submitting your TDS returns/statements:

  • Failure to submit your returns: Under Section 272A(2) of the Income Tax Act, a penalty of Rs.100 will be levied for each day that the returns remain unsubmitted, subject to a maximum of the TDS amount.
  • Failure to file your returns on time: Under Section 234E of the Income Tax Act, a penalty of Rs.200 will be levied for each day that the returns remain unfiled, subject to a maximum of the TDS amount.
  • For incorrect details: Under Section 271H of the Income Tax Act, a penalty of Rs.10,000 to Rs.1 lakh will be charged in case the deductor submits incorrect information pertaining to PAN, challan particulars, TDS amount, etc.

Refund of TDS:-

TDS Refund claim by Individuals can be made TDS refund on the Income Tax website. Once the ITR is filed, the TDS refund will be processed by the Income Tax Department. The refund might be credited to the bank accounts by 6 months. Individuals can also check the status of the refund with the help of the e-filing website login.

TDS Return

When is TDS not applicable?

There is no requirement for TDS deduction in case the person who makes the payment is a Hindu Undivided Family or an individual whose books do not require an audit.

That said, HUFs or individuals who make rent payments in excess of Rs.50,000 on a monthly basis must deduct TDS at 5% regardless of whether or not the person is required to have their books audited. The persons who are liable to subtract TDS at 5% have no requirement to apply for TAN.

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