TDS Exemption:

TDS Exemption:

If your TDS has been deducted under Sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194I, 194J, 194LA and 195, while at the same time if you feel that you are not eligible to pay TDS, then, in order to claim a tax deducted at source exemption, follow the below mentioned procedure:

• Contact your corresponding Income Tax official or the department through Form 13 to get permission.
• There has to be a consequent disposal of the applicants within the time frame of a month (30 days).
• All the taxpayers are advised to fill in authentic and complete information in the first occasion itself. Not doing so might result in your application being rejected by the assessing officer. In any other scenario, if the officer is satisfied with the information provided, he/she will go ahead and issue your exemption certificate under Section 197.
• Save a copy of this receipt to later attach it with the invoice that you will eventually raise in order to claim your TDS exemption.
• Your certificate will have total validation, unless the officer cancels it.

TDS Certificate:

As TDS is collected on an ongoing basis, it can be difficult to keep track of deductions by an individual. As per Section 203 of the ITA, the deductor has to furnish a certificate of TDS payment to the deductee/payee. This certificate is also offered by banks making deductions on pension payments etc. The certificate is typically issued at the deductor’s own letterhead. Individuals are advised to request for TDS certificate wherever applicable, and if not already provided.

Refund of Excess TDS Deductions

If a person has been subjected to excess TDS deductions, the deductor can make claims for refund of the excess amount. The difference between the tax deducted and the actual payments made by the deductor, whichever is higher, is accepted as the excess payment, and this amount will be refunded after adjusting against any tax liabilities under Direct Tax Acts.

Quick Takeaways

• TDS denotes the tax deductions at source of an individual’s income/payments. The deductor (employer/contractor etc) is the person who is making payments to the deductee (employee, stock broker etc.).
• TDS helps in reducing tax filing burdens for a deductee and ensures stable revenue for the government.
• In most cases, TDS is collected after a certain threshold limit of earnings has been crossed. The highest TDS of 30% is applicable on winnings from horse races, and lotteries and other games.
• TDS certificate is issued wherever TDS has been collected, typically by the deductor or a bank.
• TDS is exempted on some payments made to government, RBI, cooperative societies etc.
• Refunds can be requested if there are discrepancies in the collected amount and the actual payable amount.