Provisions of TDS :
Who can be the deductor: As per section 37 (1) of the act, the deductor can be:
(a) a department or establishment of the Central or State Government, or
(b) Local authority, or
(c) Governmental agencies, or
(d) such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council,
Rate of TDS: The deductor is required to deduct tax at rate of 1% from the payment made or credited to the supplier of taxable goods and/or services, notified by the Central or a State Government on the recommendations of the Council.
Value of supply for TDS: The deductor is required to deduct tax where total value of supply under a contract exceeds Rs. 10 lakh. As per the explanation to section 37 (1), for the purpose of deduction of tax, the value of supply shall be taken as the amount excluding the tax indicated in the invoice.
Time-limit for Payment: As per section 37 (2) of the act, the deductor shall be required to pay the amount deducted as tax within ten days after the end of the month in which such deduction is made. Certificate to the deductee: As per section 37 (3) of the act, deductor shall be required to furnish to the deductee a certificate mentioning therein:
i. the contract value,
ii. rate of deduction,
iii. amount deducted,
iv. amount paid to the appropriate Government and
v. such particulars as may be prescribed in this behalf.
Time limit to furnish such certificate & penalty thereof: As per section 37 (4) of the act, if any deductor fails to furnish to the deductee the certificate, after deducting the TDS within five days of crediting the amount so deducted to the appropriate Government, the deductor shall be liable to pay, by way of a late fee, a sum of Rs.
100/- per day from the day after the expiry of the five day period until the failure is rectified. However, the amount of fee shall not exceed Rs 5,000/-.
Claiming credit of TDS: Deductor is required to file the return and has to provide the detail of amount of TDS in his return. When deductor pays the amount of TDS, it shall get reflected into the credit ledger of the deductee. As per section 37 (5) of the act, the deductee shall claim credit, in his electronic cash ledger, of the tax deducted by the deductor.
Interest liability on deductor: As per section 37 (6) of the act, if any deductor fails to pay the amount of TDS to the credit of the appropriate Government, he shall be liable to pay interest in accordance with the provisions of section 36, in addition to the amount of TDS.