TDS (Tax Collected at Source) is one of the modes of collecting taxes from the assesses in India. It is governed under Indian Income Tax Act, 1961.the central board of direct taxes which is a part of department of revenue will look after the TDS matters.in simple words TDS mean deducting the tax by the payer from the amout that he pays to the payee. For the purpose of this TDS we need to know two terms.
Deductor is the person that who deducts the tax at applicable rate from the payment that he pays to other party .Deductor is popularly known as employer is the person payee is a salaried employee.
Deductee is the person that from whose payment deductor deducts the tax .generally deductee are classified into 3 types .
· Salaried : who are working for salary then he is termed as employee .in this case all the details of tax deduction and payments will be submit in Form 24Q to the government. Then government will issue Form 16.
· Non-salaried –resident: here the payee is not a salaried person but he is resident in india.in this case all the details of dedications of tax and payment will be submit in form 26Q to the govt.
· Non-salaried –Non resident: in this case the (deductee) is not a salaried person and he is also nonresident of India at the time of payment. In this case all the details of dedications of tax and payment will submit in form 27Q to the govt.
There are two types of TDS certificates 1) Form 16 and 2) Form 16 A
FORM 16 is applicable to salaried employees. This is nothing but detailed summery of Dedication of TDS and payment of remaining amount .this will issued to the employers after the current Financial yesr and employee can get their Form 16 Certificate from their employers.
FORM 16A is applicable to non salaried persons for both residents and non resident. TDS Certificates Form 16A for Financial Year 2011-12 For the following categories of deductors, it is mandatory to download Form 16A from TIN Web Site and issue such downloaded certificates to deductees
3. Co-operative society engaged in banking business
For other deductors, it is optional to download Form 16A from TIN Web site. Such downloaded TDS certificate will have a unique TDS Certificate Number This procedure is applicable for all deductions made on or after 01-04-2011