Who is responsible for deducting TDS under section 194Q?

Who is liable if TDS is not deducted?

1. Failure to Deduct or Pay TDS: If a person fails to deduct the whole or any part of the tax as, then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which they failed to deduct.

Is the proprietor liable to deduct TDS?

Yes, a proprietorship is required to deduct TDS only if the business turnover exceeds ₹1 crore in the case of a business or ₹50 lakh in the case of a profession in the preceding financial year under Section 44AB of the Income Tax Act.

Who is responsible for the payment of the TDS amount to the government?

The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.

Is TDS 100% refundable?

Q- Is TDS 100% refundable? The amount of TDS refund you receive depends on the amount of tax liability you have. For example, if your income is not taxable, still your TDS was deducted, and you might be eligible for a 100% tax refund.

Is TDS applicable on purchase of goods including GST?

GST is included in the value of goods for calculating TDS under Section 194Q. For example, if goods worth Rs. 60 lakhs plus GST of Rs. 10.8 lakhs are purchased, TDS applies on Rs.

Who is the person responsible for the deduction of taxes?

The deductor is responsible for ensuring the TDS is deposited with the government.

Who will deduct TDS, payer or payee?

This system is called as “Tax Deducted at Source”, commonly known as TDS. Under this system tax is deducted at the origin of the income. Tax is deducted by the payer and is remitted to the Government by the payer on behalf of the payee.

How much TDS is deducted on a 60,000 salary?

Here's how TDS is calculated: Annual Income = ₹50,000 x 12 = ₹6,00,000. Tax Liability (as per slabs) = ₹60,000. TDS Deducted Monthly = ₹60,000 / 12 = ₹5,000.

Who deducts TDS, buyer or seller?

The buyer of the property is responsible for deducting TDS on the sale consideration. They must deposit the deducted amount to the government on behalf of the seller.

Who is required to file form 194Q?

Eligibility Criteria For Section 194Q

Any buyer with a total turnover, gross receipts, or sales exceeding 10 crores in the previous financial year. The buyer purchases goods from an Indian seller and make payment to a resident Indian seller.

Is TDS applicable on purchase of gold jewellery?

As per recent income tax provisions: If your gold purchase exceeds ₹10 lakhs in a financial year, and you're paying in cash, the seller might deduct TDS (Tax Deducted at Source) under certain sections of the Income Tax Act.

What are the common mistakes in TDS?

TDS Filing Software: Avoid These 7 Common Mistakes for Accuracy

• Using Outdated or Non-Compliant TDS Filing Software. ...
• Wrong PAN, TAN, or Section Mapping During Data Entry. ...
• Delayed Payment or Late Return Filing. ...
• Challan Errors or OLTAS Mismatch. ...
• Missing or Late Generation of Form 16 / 16A.

Is TDS refunded automatically?

The only way to get a TDS refund is by filing your ITR for the relevant financial year. Inside the return form, enter your income, deductions, and the TDS already deducted. If your tax liability is lower than the TDS deducted, the difference becomes your refund automatically.

Who is eligible for a TDS refund?

Here's who can benefit: Salaried Employees: If your employer deducted more TDS than necessary, you can claim a refund when filing your ITR. Freelancers & Self-Employed Individuals: If clients deducted 10% TDS from your payments, but your actual tax liability is lower, you can get a refund.

What is Section 194Q of Income Tax Act?

Section 194Q was introduced on July 1, 2021, by the Central Board of Direct Taxes (CBDT) in India. It requires buyers to deduct tax at source (TDS) at 0.1% when they purchase goods from sellers in India. This section is applicable only to those buyers whose total purchase amount exceeds Rs. 50 lakh in a financial year.

What happens if TDS is not deducted?

Levy of Interest:

Any individual who is liable to deduct TDS but fails to deduct it wholly or partly, or does not pay it to the government, will be subject to pay interest. The interest rate is: One percent per month or part of a month on the TDS amount from when TDS was to be deducted.

How much TDS is deducted on a 70,000 salary?

Therefore TDS on Salary would be 9.56% of Rs. 70,000 i.e. Rs. 6695 would be deducted every month as TDS on Salary.

How much can a sole proprietor deduct?

Qualified Business Income (QBI) Deduction. The qualified business income allows sole proprietorships to deduct up to 20% of their qualified business income. While the definition of qualified business income is complex, it typically boils down to your business's net profit, with certain exclusions.

What if TDS is not deducted on contractor?

Neglecting to deduct or deposit TDS within the stipulated timeframe can result in an interest rate of 1% per month or part thereof, along with penalties ranging from Rs. 10,000 to Rs. 1 lakh.

Is an individual liable to deduct TDS on commission?

TDS on commission is a tax deducted by the payer when a commission is paid to the payee. According to Section 194H of the Income Tax Act, any person, excluding individuals and Hindu Undivided Families (HUF) not liable to audit, responsible for paying commission or brokerage to a resident, is required to deduct TDS.