Dear Young Accounting Aspirants, today let us talk on TDS which is also tedious for many of us including Professionals.

The full form of TDS is Tax Deducted @ Source. Let us interpret this in more detail.  Deducted @ Source means deduction at the time of Transaction; it qualifies as Direct Tax.

To make it clearer, let us clarify.  TDS is applicable to those with tax audit and specified criteria.  Assessees whoever need to deduct TDS and pay have to get themselves registered and obtain a TAN number i.e. Tax account number. Most people have doubts whether the deductee has to have a PAN number. The Answer is Yes.  As the Act implies PAN as mandatory, those without PAN will be subject to a deduction of TDS @ 20%.

The major transactions that attract TDS over a specified limit are Salary, Professionals, Contractors, Rentals, Commission, Interest, specified property transactions.  Also TDS is deductible at various specified percentage and transaction applicability.  The onus of deduction is on the person paying the amount.  Hope you liked this snippet of TDS in a Nutshell…Stay tuned for more.

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