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How Much Tax Deducted at Source?

| Filed under Economy

Tax Deducted At Source (TDS)

Those who have invested your money anywhere and have taken them back, you would be sure that the hands of the “Tax man” has been through you. The procedure is simple for the tax man, most of the time they deduct the tax from your investment and give you back the money.  We call this by the name of TDS which means Tax Deducted at Source.  The most awkward thing about TDS is that they do not have an exact rate. The amount of tax purely depends on the source of earnings. It can depend from 1% to 30% depending on the activity.   Lets see where all do they have them.

Salary TDS:

Salary is the first target, The investment declaration that you fill up when you join a new company or your present company would have that. This will include the maximum tax deductions allowed under Sections 80C, 80D and other tax-saving instruments. If, despite all these deductions, your salary is above the exemption limit, TDS will be cut from it every month.

Bank Accounts TDS

If the interest you have earned from your bank FD is above Rs 10,000, you will receive it after the bank deducts tax. This exemption limit also applies to interest earned from a bank savings account. Don’t think you can outsmart the taxman by opening accounts or FDs in different branches, since the system works on core banking and all your FD is tagged with your PAN Card you have no other option to escape from the tax man.

Property TDS

Whether it is rental income or the money that you get after selling a house, you will receive the final amount only after tax is deducted. However, you can avail of exemptions in both cases.  If the rent you receive is less than Rs1.8 lakh a year, no tax is deducted at source. Beyond this limit, 10% of the income is cut as TDS. However, the advance deposit paid by the tenant is not taken into account for this limit.

It’s possible that there is more than one owner of the flat and that all of them share the rental income. The benefit of the exemption limit will depend on the type of ownership, whether it is joint or co-owned. “In case of co-owners, where the specific share of the property has been decided, the limit of Rs 1.8 lakh can be claimed separately by each owner. If you are selling a property, the tax will be deducted at the rate of 1% if the deal is above Rs 20 lakh in a rural area, while in urban areas, the limit is Rs50 lakh. This will be applicable from October this year.

Lottery TDS

Money won in a lottery, puzzle competition, reality show or a horse race is subject to the highest TDS rate of 30%.
“If you win Rs 50 lakh in a game show, you will only be able to take home 70% of your winnings or Rs 35 lakh. The TDS is applicable even on non-cash winnings.  So, if you have won a car worth Rs 10 lakh, you will only be able to claim it after you pay Rs 3 lakh as tax.




New Rules In Income Tax (TDS)

| Filed under Economy

CBDT brings in new changes in TDS rules

The Central Board of Direct Taxes (CBDT) has revised the Income Tax Rules, 1962 by bringing in new changes to the provisions regarding Tax Deduction at Source (TDS) that are filed on or after April 1, 2010.

Tax Deducted @ Source2 300x300 New Rules In Income Tax (TDS)

New rules for TDS deposits

Every month the employers deduct tax on the salaries and other payments distributed to the employees. According to the new rules, the employers should deposit the tax deduction for a month within 7 days from the end of that month. However, the tax deducted for the month of March, which is the end of the financial year, can be deposited on or before April 30 of the year.

For annual TDS certificate

The new CBDT rules also make it mandatory for the employers to issue the Form 16 or the annual TDS certificate to their salaried employees by May 31 soon after the end of the financial year. Previously the deadline was April 30.


PAN – Permanent Account Number

| Filed under Economy

Is your total income exceeding the maximum limit not chargeable to income tax? Then it is time that you get yourself a Permanent Account Number or PAN! Even if your answer is a no to the above question you will still require a PAN number if you are someone coming under the class or group as specified by the central government!

pan card 197230312 285x300 PAN   Permanent Account Number

So the next time you file your income tax you are legally obliged to quote your PAN number on all papers including the tax payment challans. Moreover, you should quote your PAN if you:

  1. Buy or sell an immovable property; or
  2. Have deposits in banks that exceeds the allowable limits; or
  3. Buy mutual funds more than the specified limits.