What If TDS Is Less Than My Tax Liability?
This page explains what if tds is less than my tax liability and the practical checks taxpayers or deductors should make under the applicable income-tax rules.
Quick Answer
In practical terms, This page explains what if tds is less than my tax liability and the practical checks taxpayers or deductors should make under the applicable income-tax rules.
How TDS Works
TDS is a collection mechanism in which tax is deducted or collected at source on specified payments or transactions and credited to the Central Government.
What to Check
Identify the nature of payment, deductor and deductee, applicable threshold, rate, PAN status and the tax-year rules before deducting tax.
TDS Is Not the Final Tax
TDS is generally a credit against the recipient's final income-tax liability. The recipient still has to report the corresponding income and claim the eligible credit in the return.
Practical Checklist
- Identify the applicable payment/transaction and tax year.
- Verify PAN/TAN details and the applicable rate or threshold.
- Reconcile the deduction/collection with the books and tax records.
- Retain the statement, challan and certificate evidence.
Related TDS & TCS Questions
- What Is TDS (Tax Deducted at Source)?
- Who Is Required to Deduct TDS?
- How Does TDS Work?
- When Is TDS Deducted?
- Who Is a TDS Deductor?
- What If TDS Is More Than My Tax Liability?
