The following information has been made as a guide to understanding matters relating to the T.D.S. or tax deducted at source. It has to be read with the Income-tax Act of 1961, along with all subsequent amendments and modifications.

‘Tax Deduction at Source’ is one of the methods of Tax Collection. It implies the levy and collection of tax at the very source. The provisions of the Income Tax Act of 1961 requires the payer, while paying or crediting certain types of income, to certain person/ persons [also called payee (of tax), or recipient (of the sum or credit)], to deduct a certain portion of the amount to be credited or paid and to remit/ deposit the sum so deducted with the Central Government, in the prescribed manner and within the stipulated time.

The deductor of tax then has to issue a T.D.S. Certificate to the ‘payee’, as prescribed in rule31(3) of the ‘Income Tax Rules.’, to enable the recipient (payee), to claim an adjustment of the sum so deducted towards the final tax liability that may arise at the finalisation of his/her income.

Thus to put it in a nutshell, certain persons are required to deduct a certain percentage of certain payments made to certain persons. And to remit the same to the Central Government in the prescribed time and format. The deductor is also required to issue a Tax Deduction Certificate.{ T.D.S. certificate } to the person for the amount deducted as tax. {T.D.S.}

The Income Tax Act of 1961., requires all persons, except Individuals or those specifically permitted not to deduct tax, to deduct ‘tax at source’. {T.D.S.}., on the payments made by the firm, organisation, company, trust, Body of Individuals etc.. The ‘person’ responsible for making the deduction is the trustees, employers, principal officer, concerned DDO, authorised dealer or person, local authority or corporation or the payer.

The following payments are covered under the provision of Tax Deduction at Source., which may be applicable to you :

(i). Salaries, including allowances and perquisites- Sec.192. (ii). Interest on Securities. Sec-193. (iii). Interest other than Interest on Securities.Sec.194A. (iv). Winnings from Lotteries or Crossword Puzzles. Sec.194.B (v).Contractors, Sub-contractors. Sec.194C. (vi). Insurance Commission. Sec.194D. (vii). Non-resident sportsmen or sport associations. Sec.194E. (viii). Deposits under NSS Sec.194EE. (ix). Commission on sale of lottery tickets Sec.194G. (x). Rent or lease payments. Sec.194I. (xi) . Payment of fees for professional and/or technical services. Sec.194J. (xii). Any interest (not being securities ) or any other sum chargeable under the provision of the Act. (not being income chargeable under the head salaries), payable to non-residents. Sec.195. (xiii). Income in respect of units of non-residents. Sec.196A. (xiv) .Income from units. Sec.196B. (xv). Income from foreign currency bonds or shares of Indian companies. Sec.196C. (xvi). Income of foreign institutional investors from securities. Sec.196D.

In any type of payment made wherein tax is deductible on sums which are above the ceilings provided by the Income Tax Act of 1961., deduction should be made at the following rates:

Payments to i). Advertising contractors.- @ 1%. ii). Other contractors.- @ 2%. iii). Sub-contractors.- @ 1% .

iv). Non-resident sportsman or sports associations.- @ 10%. v). Repurchase of units by mutual funds or UTI.- @ 10%. vi). Commission etc., on the sale of lottery tickets.- @ 10%. vii). Payment of rent to individuals or HUF= @ 15%, and in case of others = @ 20%.viii). Fees for professional or technical services. - @ 5%. ix). Income in respect of units of non-residents. - @ 20%. x). Income in respect of units payable to an offshore fund. - @ 10%. xi). Income in respect of interest on foreign currency bonds or shares of the Indian company payable to a Non-resident. - @ 10%. xii). Income in respect of securities payable to a foreign institutional investor.- @ 20%.

Tax deducted either at the time of making of actual payment or at the time of crediting to the account of the payee or recipient. The tax thus deducted should be remitted to the Central Government account in the following mode of payment:

The person deducting tax should make payment (remitance),within the prescribed time, in the form of challans at branches of the RBI/SBI or its subsidiary branches. The deductor should mention the Assessing Officer’s code along with his T.A.N. number on all challans and in all correspondence with the concerned Officer.

The person deducting tax ( also called the deductor) is required to file annual ‘T.D.S.returns’ within the stipulated time, in the prescribed form, along with all necessary details and submissions.

The Assessing Officer designated by the order of the Chief Commissioner of Income Tax, Andhra Pradesh, for the purpose of collecting T.D.S., in the twin cities of Hyderabad and Secunderabad and the Ranga Reddy District of Andhra Pradesh, having the jurisdiction over : All Central and State Government institutions, Companies or Corporations and ‘all cases connected with the ‘making of films and their distribution’, is :

" The ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 6 (1)".

The ‘Assessing Officer’s Code’ ( or A.O.Code ) is.: " APRCT 00601."

Every person deducting tax at source ( or T.D.S.) is required to apply for the allotment of a

‘Tax deduction Account Number’ (T.A.N.).The application should be made in duplicate in form No.49B to the Assessing Officer. The application for allotment of TAN should be made within one month from the end of the month in which tax is deducted. A failure to do so would lead to the imposition of penalty U/s.272BB.The T.A.N. allotted by the Department should be quoted in all challans of remittance and communication with the Department.

A failure to deduct tax or a short deduction of tax would lead to a). payment of tax not deducted or short deducted. b). Interest on the tax U/s.201(1A). c).Penalty U/s.221 and 271C.

A failure to remit tax deducted or a belated remittance would lead to (a). payment of unremitted tax. (b).interest U/s.201(1A). (c). prosecution U/s.276B., for imprisonment of upto 7 years along with a fine.

A failure to submit the prescribed return would lead to penalty of upto Rs.200/- for every day of default U/s.272A(2)(c). A failure to issue TDS certificates within the prescribed time, would lead to a penalty of upto Rs.200/ for every day during which the default continues U/s.272A(2)(g). A failure to furnish a copy of declarations U/s.197A would lead to a fine of upto Rs.200/- per day for the period of default U/s.272A(2)(f).

You may contact the Inspector of Circle - 6(1) or the staff of Circle - 6(1)., at the address and telephone extension given below or contact the Asst. Commissioner of Income Tax, 6(1)., Oor any other Officer of Circle-6., at the above mentioned address or contact number., at any time between ‘1100hrs. to 1700hrs.’ on all working days.

ADDRESS & TELEPNONE NUMBERS. (with extension)

CIRCLE - 6 (1), 3rd floor, Aayakar Bhavan, Basheerbagh,

Hyderabad, A.P.-4. Ph:233692 or 233412 at Ext.No. 307.

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