Is TDS Applicable For Contract Employees?

What is the rule of TDS deduction?

TDS is deducted only if your total income is taxable.

However, TDS will not be deducted in case your total income is Rs.

2,50,000 and this amount is applicable for men and women below the age of 60 years.

Note: TDS deduction rate on salary ranges from 5% to 30% which is equivalent to the applicable income tax slabs..

Is TDS deduction mandatory?

Under Section 192 of the Income Tax Act, every employer who is paying a salary income to his employee is required to deduct TDS from the salary income if it exceeds the basic exemption limit. … Since TDS deduction is compulsory, it is important to understand the rate of such deduction and how such deduction happens.

What is TDS threshold limit?

TDS threshold raised to Rs 40,000 from Rs 10,000 The TDS (tax deducted at source) threshold for bank and post office deposits has been raised from Rs 10,000 to Rs 40,000, according to the Interim Budget proposals for 2019-20.

How is TDS calculated?

Here’s how an individual can calculate TDS on income: Add basic income, allowances and perquisites to calculate gross monthly income. Compute the available exemptions under Section 10 of the Income Tax Act (ITA) … Multiply the number obtained from the above calculation by 12, as TDS is calculated on yearly income.

How is TDS interest calculated?

Interest is at the rate of 1.5% per month from the date at which TDS was deducted to the actual date of deposit. Note, that this is to be calculated on a monthly basis and not based on the number of days i.e. part of a month is considered as a full month.

Is TDS applicable on works contract?

Contracts for Which TDS Must Be Deducted TDS must be deducted for works contracts. Works contract as specified in Section 194C includes the following: Advertising services. Broadcasting and Telecasting services including production of programs of such broadcasting or telecasting.

Who is liable to deduct TDS on contractor?

Basic provisions of section 194C of the Income Tax Act Section 194C of the Income Tax Act states that any person making payment to a resident person, who is carrying out any ‘work’ in terms of the contract between the ‘specified person’ and the resident contractor, is required to deduct TDS.

Is TDS applicable on software license?

Royalty includes payment received for transfer of all or any right to use computer software. Royalty includes payment received for transfer or granting of license for computer software. On purchase of software from a resident TDS shall be deducted @10% under section 194J.

Can we deduct TDS at higher rate?

02 January 2008 you should issue TDS certificate for the actual tax deducted, this will enable the deductee to get claim the full amount of TDS credit. 02 January 2008 Hi Ramesh, … If the vendor is aggreeable for the higher deduction, you may issue certificate for the higher rate.

Is TDS and income tax same?

Income tax: It is paid on the annual income where taxes are computed for a particular financial year. TDS: It is deducted at source on a periodic basis in the particular year. Income Tax: The taxpayer determines his liability and makes the payment directly to the government.

What is the TDS rate for contractors?

7. What is the rate of TDS?Sl. NoNature of PaymentTDS Rate if PAN available1Payment / Credit to resident individual or HUF1%2Payment/Credit to any resident person other than individual / HUF2%3Payment/ credit to TransportersNILSep 29, 2020

What is current TDS rate?

TDS Rates Applicable for a Domestic CompanyTDS Rate (%)TDS Rates from 01.04.2020 to 13.05.2020TDS Rates from 14.05.2020 to 31.03.20215 (w.e.f 01.06.2016) (10 % from 01.04.2015 to 31.05.2016)53.752 102 101.5 7.51 5 (w.e.f from 01.06.2017) (If payment of Rent exceeds Rs. 50,000/- per month. ) 101 5 100.75 3.75 7.51011 more rows•Sep 29, 2020

Is TDS deducted on vehicle repair?

Explore our Full detailed Article on TDS. TDS on repair and maintenance is required to be deducted under Section 194C of Income Tax Act 1961 at the rate of 1% or 2% (as the case may be) for payments to residents.

When TDS is not required to be deducted?

For senior citizens, TDS on interest received on FD will be applicable if it crosses Rs 50,000 in a single financial year. If a person expects that his total income in a financial year will be below the exemption limit, he can ask the payer not to deduct TDS by submitting Form 15G/15H.

What is TDS 94c?

1) Any person responsible for paying any sum to any resident (hereafter in this section. referred to as the contractor) for carrying out any work (including supply of labour for carrying. out any work) in pursuance of a contract between the contractor and a specified person shall, at.

Is TDS applicable on purchase of e books?

By tax department’s interpretation payment for subscriptions/purchases/ licenses of e-Books/e-Journals by Libraries are treated as equivalent to software and hence come under TDS provision, which is 10% on local payment and 15-25% on payment to international publishers/vendors depending on the rate determined by the …

How is TDS calculated on works contract?

If a payment is being made to any resident sub-contractor in pursuance of a contract with the sub-contractor for carrying out, or for the supply of labor for carrying out, the whole or any part of the work undertaken by the contractor, TDS shall be deducted @ 1% on the gross amount of receipt at the time of payment in …

Is TDS deducted on annual subscription fee?

TDS is not applicable in case of membership fees paid. No need to deduct TDS.

Is TDS applicable on purchase of laptop?

08 May 2014 TDS is not required to deduct on purchase. … If you want to deduct then refer the list of TDS and try to fit your question in any section. Income Tax department has provided list on which TDS is required to be deducted.