Definition
TDS Section 194 Variants
The Section 194 family of provisions requires tax to be deducted at source on various payments such as contractor fees, commission, rent, professional fees and dividends.
Section 194 and its many sub-sections form the backbone of India's TDS system for non-salary payments. Different variants cover specific payments — for example contractor and sub-contractor payments, commission and brokerage, rent above a threshold, professional and technical fees, dividends, and cash withdrawals beyond a limit — each with its own rate and threshold.
Newer provisions extend TDS and TCS to areas like purchase of goods, e-commerce sales and benefits or perquisites to businesses, broadening the trail of reported transactions. Deductors must deposit the tax, file returns and issue certificates, while deductees claim the credit in their returns.
Related terms
- Annual Information Statement (AIS)The AIS is a comprehensive statement of a taxpayer's financial transactions reported to the tax department, used to help file accurate returns.
- TCS on LRS RemittanceTCS on LRS is tax collected at source on money sent abroad under the Liberalised Remittance Scheme, such as for foreign travel, investment or education.
- Faceless AssessmentFaceless assessment is a system in which income-tax scrutiny and assessment are conducted electronically without physical interface between the taxpayer and a specific officer.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.