As we are inching closer to the end of financial year FY18, employer would have already started asking you to submit all the documents related to tax-saving and expenses.
Generally, an employer deducts tax from your salary and pay it to the government known as Tax Deducted at Source (TDS).
TDS is one form of tax which is deducted from an individual’s income on a periodical or occasional basis. This can be liable for income that are regular as well as irregular in nature.
TDS has been regulated in India by Income Tax Act, 1961, through Central Board of Direct taxes (CBDT) under the Indian Revenue Services (IRS).
Under TDS rule, the payee or employer must deduct a certain amount of tax before making full payment to the receiver. It is applicable for salary, commission, professional fees, interest, rent, etc.
The percentage of TDS depends on income tax slab rate for salaries. Just like each type of income has its own percentage of tax which is calculated when the amount meets certain limit.
Since TDS is collected at source without calculating investment that is eligible for tax deductions, it becomes very important for employee to submit and declare his investment proof to file a return or claim TDS refund.
In case, you fail to file TDS return in the scheduled time period, you will be liable to pay penalty of Rs 200 per day until the procedure is not completed.
If you exceed more than a year time limit for filing TDS return or provided incorrect details of PAN, TDS amount, you will have to pay fine ranging between Rs 10,000 to Rs 1 lakh.
Bank Bazaar report says, "If you do not submit proofs on time, excess TDS will be cut. It will get refunded by the Income Tax department only once the tax cycle is over. To avoid this, make sure you submit proofs to claim tax deductions before your TDS is determined."
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