As per the Income Tax Act, any individual or registered firm making the payment must deduct a certain percentage of the amount as tax at the source, provided that amount is more than the pre-fixed threshold limits. TDS can only be deducted according to the relevant rates issued by the Income Tax Department. The first party(Individual or firm making the deduction after payment) is the deductor and the second party( The Individual or firm receiving the amount post the deduction) is the deductee. TDS will be deducted regardless of the mode of payment.
Payments which require TDS:–
The deductor(Second Party) is required to submit the TDS return to the Income Tax Department on Time in the form of a quarterly statement. The requirements are as follows: