Duties and Responsibilities of Deductor

 

TDS (Tax Deducted at Source) is the Mechanism of Tracking the transactions among payer and payee. TDS is also one of the modes of collection of taxes. The concept of TDS envisages the principles of the "Pay as you Earn" scheme also known as withholding tax in many other countries.

 The person responsible for deducting TDS is termed as Deductor/Payer and the person who receives the payment after-tax deduction is termed as Deductee/Payee.

 

 As per the provision of Section 200, Deductor is responsible to perform some duties:

1) Obtain TAN (Tax Deduction Account Number)

·         TAN is a 10-digit alphanumeric number. The provisions of section 203A contain the requirement of obtaining TAN.

·         However, a person required to deduct tax under following sections can use PAN in place of TAN as such person is not required to obtain TAN.

194-IA

Payment on transfer of certain immovable property other than Rural Agricultural land

194-IB

Payment of rent by certain individuals or HUF

194M

Payment of certain sums by certain individuals or HUF

 

2) Obtain the correct PAN of the payee

·         Where the payee has not furnished PAN or furnished invalid PAN or does not belong to the payee, it shall be deemed that the payee has not provided PAN to the deductor according to Section 206AA.

 

3) Deduct Tax at the prescribed rate of TDS

·         TDS is deducted by the person making certain specified payments at certain rates and applicable threshold limits as prescribed by the Income Tax Act.

 

4) Deposit the Tax with the Department

·         Payer or Deductor shall pay TDS to the credit of the Central Government within the prescribed time

·         In the case of Government officials, TDS has been paid to the credit of the Central Government without production of challan, the Pay and Accounts Officer or the Treasury Officer, or the Cheque Drawing and Disbursing Officer, who is responsible for the crediting TDS to the credit of Central Government, shall deliver to the prescribed income-tax authority, a statement in the prescribed form.

 

5) File TDS Return

·         Payer/ Deductor shall, after depositing TDS to the credit of the Central Government within the prescribed time, prepare a statement for the prescribed period and deliver it to the prescribed income-tax authority within the prescribed time.

·         Provided that, the person may also deliver a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section.

6) Issue certificate to the payee

Form

Periodicity

Due Date

16

Annual

By 15th June of the financial year immediately following the financial year in which the income was paid and tax deducted (for TDS on salary)

16A

Quarterly

Within 15 days from the due date for furnishing TDS return under rule 31A (for all other Section)

16B

Quarterly

15 days from the due date of e-filing of Form 26QB (for Section 194-IA)

16C

Quarterly

15 days from the due date of e-filing of Form 26QC (for Section 194-IB)

16D

Quarterly

15 days from the due date of e-filing of Form 26QD (for Section 194M)

 

Hope the above discussion provides good understanding about the duties of deductor.

 

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Location: Pitam Pura, New Delhi, Delhi, India

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