Difference between Income Tax and TDS
What Is TDS?
The expansion of TDS is Tax Deducted at Source. According to the Schedules in the Income Tax Act, if the taxable income at a source exceeds the specified limits, the tax will be deducted at the source. The source that deducted tax from your income will then have to issue a certificate called TDS certificate within a given time specified by the Income Tax Act. There is a difference between TDS and Income Tax in that TDS is deducted at source while income tax is calculated and filed by the individuals.
Income tax refund can be claimed by attaching the TDS certificate when you file your income tax returns. Deduction of TDS is mandatory and its responsibility lies with the person in charge of the payment. If not deducted where needed, the relevant amount will be disallowed for expenditure according to the specifications of Income Tax Act. The deduction rates are specified by the income tax act and the deduction must be made accordingly before making payment to the payee and the same TDS must be deposited on or before 7th of the following month.
Difference between Income Tax and TDS
Income tax is usually the tax collected from citizens based on their total taxable income, and their assets at regular intervals of time. Its done in parts like quarterly or half yearly or done annually. It requires us to account for all our assets and all sources of income and compare it with the tax slabs for each category of income and calculate the total amount of tax payable. Since many people hide their various sources of income, the income tax department came up with the TDS. So that when the income from a source exceeds certain limit and becomes taxable, instead of making it a taxable income, an amount of tax is deducted at the source itself called TDS. This makes the income tax collection process more effective and reduces delay. Previously, when people had to assess their income, they had to assess their income from previous year and it gave them the chance to conceal some sources of income and also caused delay in tax payment. With TDS the tax payment is faster and effective.
The Hon'ble Bombay High Court
The Hon'ble Bombay High Court has decreed that No Income Tax on Transfer Fee collected from a transferor or a transferee of a co-operative society. The transfer fee received from the Members is merged with the common pool of funds and there is no commercial motive. The transfer fee is collected as per the provision of society's byelaws which is a contract between member and the society. The accumulated transfe fee is kept under fixed deposit scheme. The money is ultimately used for the development activities of the society and not for any commercial purposes. A co-operative housing society is run on no profit no loss basis.The TDS deducted by bank out of apparent ignorance of the H. C. judgment can be refunded. If so what is the procudure, secondly how to stop TDS deduction in future. I earnestly request for an early reply.
The Hon'ble Bombay High Court
The Hon'ble Bombay High Court has decreed that No Income Tax on Transfer Fee collected from a transferor or a transferee of a co-operative society. The transfer fee received from the Members is merged with the common pool of funds and there is no commercial motive. The transfer fee is collected as per the provision of society's byelaws which is a contract between member and the society. The accumulated transfe fee is kept under fixed deposit scheme. The money is ultimately used for the development activities of the society and not for any commercial purposes. A co-operative housing society is run on no profit no loss basis.The TDS deducted by bank out of apparent ignorance of the H. C. judgment can be refunded. If so what is the procudure, secondly how to stop TDS deduction in future. I earnestly request for an early reply.
The Hon'ble Bombay High Court
The Hon'ble Bombay High Court has decreed that No Income Tax on Transfer Fee collected from a transferor or a transferee of a co-operative society. The transfer fee received from the Members is merged with the common pool of funds and there is no commercial motive. The transfer fee is collected as per the provision of society's byelaws which is a contract between member and the society. The accumulated transfe fee is kept under fixed deposit scheme. The money is ultimately used for the development activities of the society and not for any commercial purposes. A co-operative housing society is run on no profit no loss basis.The TDS deducted by bank out of apparent ignorance of the H. C. judgment can be refunded. If so what is the procudure, secondly how to stop TDS deduction in future. I earnestly request for an early reply.
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