Section 192 to 194 of the Income Tax Act prescribes the nature of income subject to deduction of tax at source (TDS), the amount limit and the rate at which tax is to be deducted by the deductor. Income Tax Act requires all entities (other than Individuals and HUFs) to deduct TDS at the prescribed rates, if it falls under the purview of Section 192 to 194. Also, individuals, subject to tax audit under section 44AB are required to deduct tax at source.
The deductor is thus responsible for the following:
- Deduct tax at source, if their payment falls under the purview of Income Tax Act
- Deposit the tax deducted at source to the Government of India.
- Submit a quarterly return stating the name of deductee, amount paid, amount deducted, section under which the same is deducted, date of deduction etc.
- Issue a certificate of tax deducted at source to the deductee