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TDS Interview Questions and Answers

What is TDS?

 

The full form of TDS is Tax Deducted at Source. As per the Income Tax Act, TDS is applicable for business and individuals. The payee is required to deduct TDS before making certain payments like, commission, rent, interest, and professional charges etc.

 

TDS should be deducted when payment threshold limit exceeds on certain types of payments.

 

The deductor has to deposit TDS amount to the Government on or before the due date.

 

Making of Audit fee of Rs.50,000 to Pavan & Co and while making a payment, payee has to deduct TDS on payable amount. TDS rate on professional charges is 10% and threshold limit is 30,000 per annum.

 

TDS amount: 50000*10/100 = 5000

 

 

What is TAN?

 

TAN stands for Tax Deduction Account Number. TAN number is required to be obtained by all persons who are responsible for deducting or collecting of tax. It is a 10 digit alpha numeric number allotted by the Income Tax Department.

 

 

When TDS to be deducted?

 

TDS to be deducted either at the time of credit to the deductee account or at the time of payment whichever is earlier.

 

 

When is TDS to be deposited?

 

TDS to be deposited on or before 7th of the following month.

Example: TDS deducted in April, to be deposited by 7th May

 

 

What are the due dates for filing of TDS return?

 

The following are the TDS return due dates

 

Quarter                               Due Date

1st Apr to 30th Jun               31st July of Financial Year

1st Jul to 30th Sep               31st October of Financial Year

1st Oct to 31st Dec               31st January of Financial Year

1st Jan to 31st Mar               31st May of following Financial Year

 

 

How to calculate interest on late payment of TDS

 

TDS should be deducted and paid to the government on time, if the payment has not been paid within due date then interest will attract 1.5% per month.

 

Example, ABC Company has deducted TDS of Rs. 10,000 in April and the same should be paid on or before 7th of May but ABC company fails to deposit the same.

 

In this case interest of Rs.150/- is required to paid by the assessee.

 

 

Late filing of TDS return

 

As per the section 234E, the deductor will be liable to pay fee of Rs.200 per day until your return is filed. Penalty should not exceed the amount of TDS.

 

 

What is the entry for TDS receivable?

 

Bank A/c Dr 1,00,000

To TDS Receivable A/c 10,000

To Customer A/c 90,000

 

 

What is TDS payable entry?

 

Expense A/c Dr 1,00,000

To TDS A/c 10,000

To Vendor A/c 90,000

 

 

What is TDS certificate?

 

TDS certificates are issued by the deductor to the deductee.

 

Form 16: It is issued by the employer to the employee, it indicates details of tax deducted by the employer for the particular financial year.

 

Form 16A: It is issued by the deductor in case of other than salary. Example, TDS on rent, TDS on professional charges and TDS on commission etc.

 

 

 

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