Tax Ready Reckoner

The Deduction and Collection of Tax at Source (TDS/TCS) provisions under the Income Tax Act, 1961 are covered under Chapter XVII (Sections 190 to 206CA). These provisions ensure advance tax collection by requiring specified persons (deductors/collectors) to withhold tax at the time of payment/credit (TDS) or collection (TCS). Key Components of TDS & TCS: (A) Applicability (Section 190) Tax is […]

Section 190 of the Income Tax Act, 1961, governs the provisions related to Tax Deduction at Source (TDS), Tax Collection at Source (TCS), and Advance Tax. It ensures that tax is collected in advance during the financial year itself, rather than waiting for the assessment year. Key Provisions of Section 190 Modes of Tax Collection

Section 191 provides for situations where tax is not deducted at source (TDS) as required under other provisions (Sections 192 to 194, 194A to 194D, etc.), and the recipient (assessee) is responsible for paying the tax directly to the government. Key Provisions Default in TDS Deduction If a payer fails to deduct TDS(even though required under the law), the recipient

Section 192 mandates employers to deduct Tax Deducted at Source (TDS) from employees’ salaries if their taxable income exceeds the basic exemption limit. It is the primary TDS provision for salaried individuals and ensures advance tax collection by the government. Key Provisions of Section 192 Who is Responsible for Deduction? Employer (Deductor): Any person/entity paying salary (company, firm, individual, HUF, etc.)

Section 192A of the Income Tax Act, 1961, mandates Tax Deducted at Source (TDS) on premature withdrawals from the Employees’ Provident Fund (EPF) if certain conditions are not met. Introduced by the Finance Act, 2015, this provision ensures tax compliance while allowing exemptions for specific cases. 1. When is TDS Deducted Under Section 192A? TDS applies if: ✅ Withdrawal before 5 years of

Section 193 of the Income Tax Act, 1961, mandates Tax Deducted at Source (TDS) on interest earned from specified securities. This provision ensures advance tax collection on such income, with exemptions for certain cases. Below is a detailed breakdown: 1. Key Provisions of Section 193 1. Applicability of Section 193 Applies to: Interest paid on securities like: Government bonds

Section 194 of the Income Tax Act, 1961, governs Tax Deducted at Source (TDS) on dividend payments made by companies to shareholders. 1. Key Provisions ASPECT DETAILS Applicability Dividend payments ≥ ₹5,000 (per shareholder, per year) TDS Rate 10% (if PAN provided) 20% (if PAN not provided) Exemptions – Dividends ≤ ₹5,000 in a financial year – Payments to government entities, LIC, mutual funds Due Date

Section 194A mandates Tax Deducted at Source (TDS) on interest payments (excluding interest on securities) exceeding specified thresholds. 1. Key Provisions PARAMETER DETAILS Applicability Interest payments by: – Banks (on FDs/RDs) – NBFCs – Post Office (Time Deposits) – Others (e.g., loans, debentures) TDS Threshold ₹40,000 (₹50,000 for seniors ≥60 years) TDS Rate 10% (if PAN provided) 20% (if PAN not

Section 194B of the Income Tax Act, 1961, mandates Tax Deducted at Source (TDS) on winnings from games of chance or skill, ensuring tax compliance at the point of payment. Below is a detailed breakdown of its provisions: 1. Applicability of Section 194B Covered Activities: Lotteries Crossword puzzles Card games (e.g., poker, rummy) Betting/gambling (casino, horse racing) TV game

Section 194BB of the Income Tax Act, 1961, mandates Tax Deducted at Source (TDS) on winnings from horse races, ensuring tax compliance for betting and wagering activities. Below is a detailed breakdown of its provisions: 1. Applicability of Section 194BB Covered Activities: Winnings from horse races(including betting, wagering, and bookmaking). Applies to licensed racecoursesand government-approved betting operators. Threshold for TDS: Single transaction