FAQ Category: Services

What is Tax Deducted at Source?

The Income-tax Law has incorporated a system of deduction of tax at the point of generation of income for the quick and efficient collection of the taxes. This system is known as the “Tax Deducted at Source”, commonly known as the TDS. Under this system of TDS, the tax is deducted at the origin of the income.

The tax is deducted by the payer, and the same is remitted to the Government by the payer on behalf of the payee.

The provisions related to the deduction of tax at source are applicable to the following payments: –

  1. Salary
  2. Interest,
  3. Commission,
  4. Brokerage,
  5. Professional fees,
  6. Royalty,
  7. Contract payments, etc.

In respect of the payments to which the TDS provisions apply, the payer has to deduct the tax at source on the payments made by him, and he/she has to deposit the tax deducted by him to the credit of the Government.

If I have paid the excess tax, then how will it be refunded?

The excess Tax paid can be claimed as a refund by filling the Income-tax return. It is refunded to the person by crediting the same in their bank account through ECS transfer. 

Where does the appeal lies against the order of the Commissioner?

Before the Income Tax Appellate Tribunal (ITAT) within 60 days from the date of order under Form 36.

Where does the appeal lies against the order of the Assessing Officer?

Before the Commissioner within 30 days from the date of order under Form 35.

What is a PAN?

PAN stands for Permanent Account Number. It is a ten-digit unique alphanumeric number which is issued by the Income Tax Department.

A permanent Account Number is issued in the form of a laminated plastic card, commonly known as a PAN card.

A PAN Card enables the department to link all the transactions of the assessee with the department. These transactions include TDS/TCS credits, tax payments, returns of income, specified transactions, correspondence, etc. It also facilitates the easy retrieval of information of an assessee and comparing of various investments, borrowings and also other business activities of the assessee.​

Is Agricultural income taxable?

No, the Agricultural income is not taxable.

What is exempted income and taxable income?

An exempted income is the income which is not charged to tax, and under Income-tax Law, there is a specific exemption from tax to such incomes. The Taxable incomes are those incomes which are chargeable to tax.

How does the Government collect the Income-Tax?

Taxes are collected by the Government by way of three means:

  1. Voluntary payments made by the taxpayers into various designated Banks, which includes Advance Tax and Self-Assessment Tax,
  2. Tax deducted at source, i.e., TDS, which is deducted from the income of the receiver, and
  3. Tax collected at source, i.e., TCS

Who is supposed to pay the Income-Tax?

Income tax is to be paid by every person. The term ‘person’ as defined under the section2 (3) of the Income-tax Act and covers the natural as well as the artificial persons under its ambit.

For the purposes of charging the Income-tax, the term ‘person’ includes the following: –

  1. Individual
  2. Hindu Undivided Families [HUFs]
  3. Association of Persons [AOPs]
  4. Body of individuals [BOIs]
  5. Firms
  6. LLPs, Companies
  7. Local authority and
  8. Any artificial juridical persons are not covered under any of the above.

Therefore, by the definition of the term ‘person’, it can be observed that apart from a natural person, i.e., an individual, any type of artificial entity will also be liable to pay the Income-tax.

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