PPT: Advance Tax, Tax Deduction at Source and Introduction to Tax Collection at Source | Taxation for CA Intermediate PDF Download

 Page 1


TDS , TCS and Advance payment 
of Tax
Page 2


TDS , TCS and Advance payment 
of Tax
What is Tax Deducted at source i.e
TDS?
• TDS is one of the modes of collection of taxes, by 
which a certain percentage of amounts are deducted 
by a person at the time of making/crediting certain 
specific nature of payment to the other person and 
deducted amount is remitted to the Government 
account. It is similar to "pay as you earn" scheme also 
known as Withholding Tax in many other countries. It 
facilitates sharing of responsibility of tax collection 
between the deductor and the tax administration. It 
ensures regular inflow of cash resources to the 
Government. It acts as a powerful instrument to 
prevent tax evasion as well as expands the tax net. 
Page 3


TDS , TCS and Advance payment 
of Tax
What is Tax Deducted at source i.e
TDS?
• TDS is one of the modes of collection of taxes, by 
which a certain percentage of amounts are deducted 
by a person at the time of making/crediting certain 
specific nature of payment to the other person and 
deducted amount is remitted to the Government 
account. It is similar to "pay as you earn" scheme also 
known as Withholding Tax in many other countries. It 
facilitates sharing of responsibility of tax collection 
between the deductor and the tax administration. It 
ensures regular inflow of cash resources to the 
Government. It acts as a powerful instrument to 
prevent tax evasion as well as expands the tax net. 
Objective of deduction of tax at source 
is to collect tax in advance.
• The main object of deduction of at source was 
to collect tax at the time the income like 
salaries, interest on securities or dividend are 
paid, so that the Government could have a 
regular inflow of cash resources, collect tax in 
advance, prevent evasion of tax and also place 
the responsibility of deducting and depositing 
tax on the shoulders of persons other than the 
payees.
Page 4


TDS , TCS and Advance payment 
of Tax
What is Tax Deducted at source i.e
TDS?
• TDS is one of the modes of collection of taxes, by 
which a certain percentage of amounts are deducted 
by a person at the time of making/crediting certain 
specific nature of payment to the other person and 
deducted amount is remitted to the Government 
account. It is similar to "pay as you earn" scheme also 
known as Withholding Tax in many other countries. It 
facilitates sharing of responsibility of tax collection 
between the deductor and the tax administration. It 
ensures regular inflow of cash resources to the 
Government. It acts as a powerful instrument to 
prevent tax evasion as well as expands the tax net. 
Objective of deduction of tax at source 
is to collect tax in advance.
• The main object of deduction of at source was 
to collect tax at the time the income like 
salaries, interest on securities or dividend are 
paid, so that the Government could have a 
regular inflow of cash resources, collect tax in 
advance, prevent evasion of tax and also place 
the responsibility of deducting and depositing 
tax on the shoulders of persons other than the 
payees.
Interest on late deduction /deposit of 
Tax at source. 
• As per income-tax , interest is payable under 
the following two circumstances:
? Tax is not deducted , when it was deductible 
? Tax once deducted, is not paid on or before 
due date
Page 5


TDS , TCS and Advance payment 
of Tax
What is Tax Deducted at source i.e
TDS?
• TDS is one of the modes of collection of taxes, by 
which a certain percentage of amounts are deducted 
by a person at the time of making/crediting certain 
specific nature of payment to the other person and 
deducted amount is remitted to the Government 
account. It is similar to "pay as you earn" scheme also 
known as Withholding Tax in many other countries. It 
facilitates sharing of responsibility of tax collection 
between the deductor and the tax administration. It 
ensures regular inflow of cash resources to the 
Government. It acts as a powerful instrument to 
prevent tax evasion as well as expands the tax net. 
Objective of deduction of tax at source 
is to collect tax in advance.
• The main object of deduction of at source was 
to collect tax at the time the income like 
salaries, interest on securities or dividend are 
paid, so that the Government could have a 
regular inflow of cash resources, collect tax in 
advance, prevent evasion of tax and also place 
the responsibility of deducting and depositing 
tax on the shoulders of persons other than the 
payees.
Interest on late deduction /deposit of 
Tax at source. 
• As per income-tax , interest is payable under 
the following two circumstances:
? Tax is not deducted , when it was deductible 
? Tax once deducted, is not paid on or before 
due date
Interest on late deduction /deposit of 
Tax at source.
• Interest is to be calculated for every month or part of a 
month comprised in a period,
• Any fraction of a month shall be deemed to be a full 
month 
• The amount of tax, penalty or other sum in respect of 
which such interest is to be calculated shall be rounded 
off to the nearest multiple of one hundred rupees and 
for this purpose any fraction of one hundred rupees 
shall be ignored and the amount so rounded off shall 
be deemed to be the amount in respect of which the 
interest is to be calculated.