Who is Responsible for TDS Deduction?

1. What is TAN? Is it compulsory to have for TDS deduction ?

Persons liable to apply for TAN

TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan and TDS/TCS certificates.

However, a person required to deduct tax under section 194-IA can use PAN in place of TAN as such person is not required to obtain TAN. Further, a person required to deduct tax under section 194-IB or section 194M shall not be required to obtain tax deduction account number (TAN).

2. Who is responsible for TDS deduction ?

TDS is deducted by the person making certain specified payments at certain rates and threshold limits as prescribed by the Income Tax Act.

The balance amount after the deduction is paid to the recipient and the amount deducted is paid to the Income Tax department.

The person responsible to deduct TDS is termed as “Deductor” and the person who receives the payment after tax deduction is termed as “Deductee”.

3. What is Form 16 ?

Form 16/16A is the TDS certificate which is issued on deduction of tax by the deductor on behalf of the deductees.

In simple terms, Form 16 is a certificate provided by the deductor which certifies details regarding the Income you have earned during the year and how much TDS has been deducted.

Form 16 has two parts:-

Part A has information of the employer & employee, like name & address, PAN and TAN details, the period of employment, details of TDS deducted & deposited with the government.  Part B  includes details of salary paid, other incomes, deductions allowed, tax payable etc.

​

4. What is Form 26AS ?

Form 26AS  is an annual consolidated credit statement issued under Section 203AA of the Income-tax Act, 1961, in which the details of tax credit are maintained for each taxpayer as per the database of Income-tax that taxpayers can access, view or download.

Form 26AS not only contains the details of your taxes paid but also contains details of any tax refunds that have been received by you during the past years.

One should always verify 26AS prior to filing your Income tax return (ITR).

• Related Articles

• Form 13 – Lower or Nil Deduction of TDS

  Person responsible for making the payment is entrusted with the responsibility of deducting the tax at specified rates either at the time of credit in the books or payment to the recipient, whichever is earlier and only pay the balance amount to the ...

• What is Tax Deducted at Source or TDS, Applicability and Rates ?

  TDS or Tax Deducted at Source is income tax reduced from the money paid at making specified payments such as rent, commission, professional fees, salary, interest etc., by the persons making such payments. Usually, the person receiving Income is ...

• TDS on Sale of Property by NRI Form 27Q

  Form 27Q – NRI TDS Returns Form 27Q is a TDS Return or Statement containing details of Tax Deducted at Source (TDS) deducted on payments other than salary made to Non-Resident Indian (NRI) and foreigners. Form 27Q is required to furnish on a ...

• Section 195 – TDS on Non-Residents

  As per the Income Tax Act, 1961, any earnings generated through business transactions with NRIs come under the purview Income Tax Act and are subject to the TDS rate under Section 195. To understand this provision better, entities need to gather more ...

• How to make payment of Demand for TDS on Property?

  Under The Income Tax Act, 1961, a few key rules regarding the sale and purchase of immovable property have been laid out. Such transactions are covered under Section 194-IA. The buyer of the property, also known as the deductor, is required to deduct ...