Explain entire Gamut of TDS and Income tax with a story By - Amlan Dutta Lets assume what all happens in this short sweet story Company Reliance pays me 10 lacs salary ... Bank Axis pays me 1 lakh interest income on my 10 lakh FD The company as per TDS u/s 192 deducts tax as per income slabs So it will deduct 0 + 30000 + 100000 = 130000 + edu cess = 130000 + 0.03* 130000 = 130000 +3900 =133900 When it deducts this much , it will now remit me only 10 lacs - 133900 = 866100 It does this for 6 employees ( we are all 6 working in the firm ) It fills the challan 281 for this TDS deposit ( 133900 x 6 to the revenue for this 6 employees Later on it fills the return 24 Q for salary TDS making use of the challan details for the same ...this has to be done every quarter Now the bank also pays me 1 lakh ,,,,and we are like 6 people who have 10 lakh deposits with the bank Axis Now axis will as per section 194 A deduct 10 % TDS on interest income It provides 10% interest income , so it provides 10 % of 10 lakhs = 1 lakh as interest income So it deducts 10 % i.e 1 lakh as TDS and 3 % edu cess i.e 10300 and remits balance to me (It does this for all the remaining 9 people as well ...so it deducts tax 10300 * 10 ) and deposits to th erevnue For doing so , it again makes use of the challan 281 and head 94 A ( TDS on interest other than securities ) While filing return , it has to select 26 Q ( for return of tds other than salary it is always 26 Q ) and fills in the challan details supporting the return (2) For the deductee - Income tax Now , my income is the 1 lalkh FD interest income and 10 lacs salary i have already paid taxes in terms of TDS deducted to the extent of 103000 on interest income and 133900 on salary income However my taxes will be as per income slabs Assuming that my salary is totally taxable(no allowances etc ) and that i have made investment u/s 80 C for 1 lakh in PF fund , so myincome is now 9 lakhs from salary and 1 lakh from interest So , my total income is 10 lacs .... Knowing income slab tax structure for FY 2013 14 , which is 0-2 lacs - Nil , 2-5 lacs - 10 % , 5- 10 lacs - 20 % and aboce 10 lacs - 30 % My Tax would be - 0 + 30000 + 100000 + edu cess = 130000+ edu cess @ 3 % = 133900 Now TDS already deducted = 133900 ( from salary )+ 13000(FD interest income ) = 144200.... So , actually more TDS has been deduted than due Sio when i file my return ITR 1 , and fill the TDS details , it will automatically compute my tax refund for (144200 -133900)= 8300 Rs As and when i get the refund , it will be with interest , If i had to pay tax , i would have then used challan 280 for payment of the same Main Points - Challan for payment of TDS - Challan 281 Return for filing TDS - 24 Q - for salary TDS 26 Q FOR Non salary TDS ( TDS ON interest , brojerage , contract etc etc ) To be filed quarterly Challan for payment of Income tax - Challan 281 Return for filing of income t5x - ITR 1/2/3/4/5/6/7 To be filed yearly (before 31st July fo assesment year for non audited accounts and 31st september for audited accounts ) Hope the entire game is clear , Humble regards , Amlan Dutta I pledge to make knowledge and information so easy and free that no professional will ahve any value left if he seeks to hide information )
Posted on: Sat, 10 May 2014 05:17:04 +0000
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