Coupon Accepted Successfully!


1.  Steps to obtain a Tax Deduction Account Number

In order to deduct TDS, a business must apply for a Tax Deduction Account Number (TAN) to the National Securities Depository Limited (NSDL), the authorized agency for allotting TAN. TAN can be only obtained once the business has acquired a Permanent Account Number (PAN). Form 49B must be filled for obtaining a TAN. It takes a maximum of around 10 days to obtain a TAN number. The steps which must be followed to obtain a TAN are described below:


 1. Visit the NSDL website here

 2. Select the appropriate business vehicle category (i.e. firm, LLP or company, as      applicable)
​ 3. Find the Assessing Officer Code for your area using the portal and fill Form 49B online
 4. Pay the fees (either by credit card or through a Demand Draft)
Print the acknowledgement from the NSDL website and send it to NSDL (within 15 days  from the date of the online application) at the following address:

National Securities Depository Limited
​             Near Baner Telephone Exchange,
            Baner, Pune – 411045

After obtaining a TAN number, a business is eligible to deduct TDS under Indian income tax law. The following link illustrates the key TDS provisions highlighted above. It gives a Snapshot of relevant TDS provisions under the Income Tax Act.


Relevant TDS Provision
To view the document, please visit here

  1. Snapshot of relevant TDS provisions under the Income Tax Act
S. No. Type of payment Section No.
(Income Tax Act)
Threshold Rate of TDS Form No. Time for filing
Salaries 192 The employee’s annual salary must be expected to cross the minimum threshold for personal income tax (currently INR 250,000). Average rate of income tax payable by employee Form 24 30th June for previous financial year
Payments to contractors 194-C If a single payment exceeds INR 30,000 or if aggregate of amounts in a financial year exceeds INR 75,000 2% on the total amount (excluding surcharge).
Form 26 30th June for the previous financial year
Rent payments (e.g. in respect of office space taken on lease) 194-I Where the rent paid/credited is in excess of Rs. 1,80,000 per annum 10% on the total amount (excluding surcharge) for the use of land or building, furniture and fittings
2% on the total amount (excluding surcharge) for the use of plant or machinery
Form 26 30th June for the previous financial year
Commission payments, i.e. amounts paid for services provided in the course of buying or selling of goods/ assets (other than securities)
Note: Payments for professional services, brokerage and insurance commission are excluded from this provision.
194-H Where the payment exceeds Rs. 5000 in a financial year Tax is to be deducted at 10 per cent (excluding surcharge) Form 26 30th June for the previous financial year
Payment of fees for professional or technical services[1] 194-J  
Where the aggregate payment is in excess of Rs 30,000
Tax is to be deducted at 10 per cent (excluding surcharge). Form 26 30th June for the previous financial year
  1. TDS provisions generally do not apply when payment is made by an individual or an HUF. Therefore, proprietorships or family run businesses (which are not structured as partnerships, LLPs or companies) will not be required to to deduct tax under sections194A,194C, 194H, 194I & 194J, unless total turn-over or receipts exceed the limits specified for tax audit under Income Tax Act. For individual or family run businesses, the turnover threshold (for the year 2014-2015) is INR1 crore and for professionals (e.g. lawyers, Chartered Accountants, etc.) the threshold is INR 25 lakhs. Income above these thresholds requires a tax audit under the Income Tax Act (as of the financial year 2014-2015).
  2. The above forms must be filed with the Director General of Income Tax (Systems).
  3. Rent includes payment under a lease, and payments for additional furniture or fittings.
  1. Understanding filings and compliance requirements in relation to TDS
  1. Annual form filings by to tax authorities – as per table above.
  2. Periodic form filings to tax authorities- In addition to annual filings, quarterly statements[2] must also be filed with the DGIT (Systems) (or a person authorised by him). These filings must be in Form 24Q (for salary payments under Section 192), or Form 26Q in all other cases.
                                    Timelines for submission of quarterly statements are given below:
Quarter ending in Due date
June 15th July of the financial year
September 15th October of the financial year
December 15th January of the financial year
March 15th May of the financial year
Note: Quarterly filing relating to payments to non-residents (other than salaries) must be filed in Form No. 27Q (within 14 days after the end of the quarter).
  1. Acknowledgement from tax authorities to the payee - The Director-General of Income-tax (Systems) (or an agency authorised by it) furnishes a statement in Form 26 AS to the person from whose income tax was deducted by 31st July, following the financial year when tax was deducted.
  2. TDS certificates from payer-Every person deducting tax must provide a certificate to the person on whose account the tax is being deducted (TDS Certificate).[3] The TDS certificate contains particulars such as the TAN of the payer, PAN of the recipient, details pertaining to the challan furnished by the bank (in case of payment through bank), and a receipt number of the quarterly statement of TDS.
The formats and time of furnishing TDS certificate are provided below:
Category of payment Format for TDS Certificate Time for furnishing certificate
TDS on salaries (Section 192) Form 16 May 31 after the financial year when the deduction was made.
TDS in all other cases Form 16A Within 15 days from the due date for furnishing the quarterly statement of TDS
  1. Time for payment of TDS to Government: All TDS amounts deducted by an office of the Government must be paid to the Central Government i) by April 30 (where the income or amount is credited or paid in March), or ii) within the seventh day next month (following the month when deduction is made).
The Assessing Officer can permit payment (for salaries, commission and brokerage) on a quarterly basis with the prior approval of the Joint Commissioner. In that event, payments can be made by the 7th of the first month of the next quarter. That can simplify the payment process for some businesses. For example, TDS deducted on 10th April, 13th May and 15th June can all be paid together by the 7th of July that year, instead of paying thrice on 7th May, 7th June and 7th July respectively. Payments made in the last quarter can be paid to the government by the 30th of April.
 (For a more detailed understanding of TDS procedures, please see Sections 190 to 206 AA of the Income Tax Act, and Rules 31, 31A, 37 of the Income Tax Rules.)
[1]Professional services refers to legal, accountancy, medical, engineering, architecture, interior decoration or any other profession notified by the Central Board of Direct Taxes under Section 194-J.
[2] See Section 200(3) of the Income Tax Act and Rule 31A of the Income Tax Rules.
[3]Section 203 of the Income Tax Act.

Test Your Skills Now!
Take a Quiz now
Reviewer Name