What is full form of tds?

What is full form of tds?


TDS FULL FORM- Tax deducted at sources

TDS is a means of collecting income tax in India, it is governed under the Indian Income Tax Act 1961 and managed by Central board for Direct Taxes.

After knowing TDS full form, now we are going to discuss about detail information of tds.



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Point of time of TDS deduction:

Here, deducter has to deduct TDS while doing payment to deductee. It is the responsibility of deductee to deduct tax and submit it to government department in specified time period. There are two identities are involved in the process of TDS that are as follow:


  1. Deductor:

Deductor is the person or company or firm that deduct tax while doing payment to deduct. There are fifty categories in which TDS is applicable like TDS on rent, TDS on contract, TDS on commotion, TDS on interest , TDS on profession etc. it is necessary that the deductor should hold a tax deduction amount number (TAN Number) which is a unique identification number for person that is deducting the tax.



  1. Deductee:

Deductee is the person who is liable to pay tax . he is the person who will get the payment after deduction of TDS. From the deductee point of view, every deducter should have pan or tan number, he should give it to deductor, so that he can claim tax adjustment while filing return.


Example: If a company, xyz limited Is giving rent of 10000 rupees every month to mohan. Then xyz have to deduct TDS while doing payment to mohan under section 194H. According to sec 194 H, There is a exception of 180000 rupees in a year, after that amount. TDS is 10 percent on all the payment. Here in this above example, the tds amount will be 10 percent of 100000 will be 10000 and entry will be as follow:




  • Rent account         10000 (dr)

To TDS on rent                               10000 (cr)

Mohan account                               90000 (cr)




  • Mohan account      10000 (dr)

TDS on rent               90000 (dr)

To bank                                             100000 (cr)





Penalty for wrongly deduction of TDS:

If person is deducting wrongly TDS, then he has to pay penalty of 10000 rupees.




TDS Rates chart:

TDS Rate are vary to person to person. If company is doing payment to contractor, TDS rate will be 2 percent. If it is company , it is 1 percent.





How to claim TDS:

The deductee can claim TDS amount while filing his Income Tax Return, he should have TDS certificate that is provided by deductor in the end of every year. If TDS is deducted on salary, the deductee will get TDS certificate 16.




Important notes on TDS Rates chart for Financial Year 2014- 2015:



  1. Interest of late deposite will be liable to pay @ 1.5 percent for each month of delay.




  1. Limitation on compensation on acquisition of immovable propery is 200000 rupees as given in table, earlier it was 100000 rupees.


  1. TDS is not applicable on service tax, if the service tax is shown separately.



  1. If deduction is unable to give pan to deductor, TDS at higher rate like 20 percent will be deducted.


  1. Surcharge on TDS on salary is not deductable at TDS. If the residential individual, HUF, Firm, AOP, BOI payment.



  1. Surcharge on TDS on salary is applicable. If taxable salary is more than one crore rupees.


  1. Failure of deduction of TDS is 10000 rupees.



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