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Esha Singh.
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- November 5, 2023 at 11:52 am #7096
I’m currently pursuing the Chartered Accountant course in India and I have a doubt regarding Tax Deducted at Source (TDS). Can someone explain how TDS works and in what situations it is applicable?
November 5, 2023 at 11:53 am #7097TDS is a mechanism that ensures the collection of tax at the source of income. It is applicable in various scenarios like salary, rent, commission, interest, professional fees, etc., where the payer deducts a certain percentage of the payment and remits it to the government on behalf of the recipient.
November 5, 2023 at 11:53 am #7098TDS helps in preventing tax evasion as it ensures that tax is deducted in advance from income itself. This helps the government in the regular inflow of taxes throughout the year. It also simplifies the taxation process for the taxpayer since they receive income after the deduction of tax.
November 5, 2023 at 11:55 am #7099Additionally, TDS certificates are issued to recipients by the deductor, which serves as proof of tax deduction and can be used while filing income tax returns to claim credit for the tax already deducted.
November 5, 2023 at 11:56 am #7100Remember, the rate at which TDS is deducted varies depending on the nature of the payment and the applicable provisions of the Income Tax Act. It is always advisable to consult the relevant provisions and consult with a qualified Chartered Accountant to ensure compliance.
November 5, 2023 at 11:57 am #7101Hope this clarifies your doubt! Feel free to ask if you have any more questions related to your CA course. Good luck!
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