TDS or Tax Deducted at Source is the amount of tax that is deducted from the payment made to a resident or a non-resident by the person making the payment. The responsibility to deduct TDS lies with the person making the payment, and not the recipient of the payment. Who pays the TDS, the seller or the buyer is clear.
For more information to Visit https://www.incometax.gov.in
In case of transactions like sale of property, rent, professional fees, etc., the payer requires to deduct TDS on the payment made to the recipient, and deposit the same with the government within the specified due dates. The recipient can claim credit for the TDS deducted while filing their income tax return.
So, in short, the payer or the person making the payment is responsible for deducting and depositing TDS with the government, and not the recipient or the seller.
FAQs:
- Who pays TDS, the seller or the buyer?
The buyer is responsible for deducting TDS from the payment made to the seller and paying it to the government. - When is TDS deducted?
TDS is deducted at the time of payment or credit to the seller’s account, whichever occurs first. - Are there any exceptions to TDS payment?
Certain payments may be exempt from TDS, depending on the nature of the transaction and applicable laws. - What happens if the buyer does not deduct TDS?
If TDS is not deduct, the buyer may face penalties, and the seller may be liable to pay tax on the entire amount received. - Is TDS applicable on all transactions?
No, TDS is not applicable on all transactions; it depends on the type of payment and applicable tax laws. - How does the seller benefit from TDS?
The seller can claim TDS deducted as a credit against their total tax liability when filing their income tax return. - What is the TDS rate for property sales?
The TDS rate for property sales is generally 1% for residential properties and 2% for non-residential properties, subject to certain conditions. - Can the seller recover the deducted TDS?
Yes, the seller can recover the TDS deduct by the buyer while filing their income tax return. - What documentation is required for TDS deduction?
The buyer must issue a TDS certificate (Form 16/16A) to the seller, which provides details of the TDS deduct. - Are there penalties for incorrect TDS deduction?
Yes, incorrect TDS deductions can result in penalties for the buyer, and the seller may have tax liabilities if TDS is not correctly apply.
For more information to Visit https://www.incometax.gov.in
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