Income tax returns: Are you being cheated on tax deducted at source (TDS)? Here is how to find out

Income tax returns: Employers are responsible for deducting tax on net income of the employees. This deduction at the origin of income is called tax deducted at source (TDS). Employees often remain oblivious to the parameters and the amount of TDS that employees deduct. This deliberate or undeliberate negligence may cost heavy. So, employees must understand how TDS works to make sure their employers do not deduct extra TDS. Some cases of deliberate cheating too have been reported, so beware!

What is TDS

Income Tax department has created a system under which tax is deducted at the origin of the income by the payer and is remitted to the government by the payer on behalf of the payee. This is called TDS, which is an efficient and quick way of collecting taxes. The provisions of TDS are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. 

Tax deduction by employer not mandatory

In case you do not want your employer to deduct TDS, you can very well approach the concerned payer for non-deduction of tax at source. However, you will have to furnish a declaration in Form No. 15G/15H, as the case may be, to the payer to the effect that the tax on your estimated total income of the previous year after including the income on which tax is to be deducted will be nil.

Form No. 15G is for the individual or a person (other than company or firm) and Form No. 15H is for the senior citizens.

Quantum of TDS

To know the quantum of the tax deducted by the payer, you can ask the payer to furnish you a TDS certificate in respect of tax deducted by him. You can also check Form 26AS from your e-filing account https://incometaxindiaefiling.gov.in

Besides, one can use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in.

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According to I-T department, following are the duties of the person deducting tax at source and if he is not doing so, then employees need to take action:

• He shall obtain Tax Deduction Account Number and quote the same in all the documents pertaining to TDS.
• He shall deduct the tax at source at the applicable rate.
• He shall pay the tax deducted by him at source to the credit of the Government (by the due date specified in this regard*).
• He shall file the periodic TDS statements, i.e., TDS return (by the due date specified in this regard*).
• He shall issue the TDS certificate to the payee in respect of tax deducted by him (by the due date specified in this regard*).
*Refer tax calendar for the due dates