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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Tax Deduction at Source (TDS) is the process of the payer withholding tax from your income and depositing it to the Government. The payer can be your employer, customer, a bank paying interest on fixed deposits etc. This way the Income Tax Department gets tax revenue in time and lowers the chances of evasion of taxes.

Any individual or Hindu Undivided Family who pays a rent to any person is liable to deduct TDS on such rent payments. However, there is a maximum limit of Rs 2.4 lakh for which TDS will be deducted in a financial year under section 194I. The TDS rate for this section is 5% of the eligible rent.

You can claim tax refund if your total tax liability for the financial year is lower than the amount of TDS deducted from you. The TDS credit can be claimed by filing an income tax return through your efiling account. You can also check your TDS credit details by logging in to your Form 26AS.

If you want to avoid TDS on certain incomes, such as dividends or interest from fixed deposits, you can submit Form 15G/15H. However, you cannot use this form to avoid TDS on incomes such as rent or earnings from online games. TDS is an important part of the Income Tax Act, and you must ensure that your TDS deductions are correct.

 

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