BASIC TDS PROVISIONS

TDS (Tax Deducted at Source) is a crucial mechanism under the Income Tax Act,1961 to collect tax in advance from the Assesse. Let’s See the other aspects of TDS provisions:

Purpose of TDS: TDS stands for Tax deducted at source. It was introduced to collect taxes directly from the source where income is generated. The Govt. uses it as a tool to minimize tax evasion by taxing income at the time it is earned, rather than at a later date.

Applicability: Entities making specified payments (such as salary, commission, professional fees, interest, rent, etc.) are required to deduct tax before disbursing the payment to the recipient.​

Liable Person to Deduct TDS: Following person are liable to Deduct TDS ​

1. Company
2. Partnership Firms Including LLP
3. Any individual or HUF whose books of accounts were audited during the Previous year as per Income Tax Act 1961.

Having a TAN (Tax Deduction and Collection Account Number) is mandatory for deducting TDS.

HOW TO APPLY FOR TAN NUMBER​

Below are the Steps to apply for the TAN Number

For Companies: Now company can apply for TAN Number through the incorporation form, below is the Screenshot for your reference