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
- TDS (Sections 192–196D): Certain payments (e.g., salary, interest, rent) require the payer to deduct tax before disbursement.
- TCS (Sections 206C–206CA): Sellers collect tax from buyers on specified transactions (e.g., sale of goods exceeding ₹50 lakhs).
- Advance Tax (Sections 207–219): Taxpayers with an annual liability exceeding ₹10,000 must pay installments during the year.
- Employer’s Tax Payment (Section 192(1A)): Employers may pay tax on non-monetary perquisites (e.g., company car) on behalf of employees 810.
- Prepaid Taxes Adjusted Against Final Liability
- TDS, TCS, and advance tax are credited against the taxpayer’s total liability during assessment.
- Any remaining tax must be paid as self-assessment taxunder Section 140A 8.
- No Override of General Tax Charge
- Subsection (2) clarifies that advance tax collection under Section 190 does not override the general charge of tax under Section 4(1)8.
Example
- Scenario: Mr. Sharma earns a monthly salary of ₹1 lakh. His employer deducts TDS (₹12,000 annually) under Section 192.
- Outcome: The deducted tax is adjusted against Mr. Sharma’s final liability when filing his ITR. If his total tax due is ₹15,000, he pays only the balance ₹3,000 10.
Compliance & Penalties
- Default in TDS/TCS:
- Interest @ 1%–1.5%per month for late deduction/deposit (Section 201(1A)) 8.
- Penalty up to ₹1 lakhfor delayed TDS returns (Section 271H) 8.
- TAN Exemption: No TAN required for TDS under Sections 194-IA (property) & 194-IB (rent)
