Hello friends, how are you? Welcome to a new lecture on a
new topic.
First tell me, how are you?
Great fun outside, everyone is happy at home.
Friends, a new day, a new morning brings hope that
something new will happen today.
And today we really have a new lecture.
Before I start this lecture, I want to tell you that we
have covered five major heads so far.
PGVP, House Profitability, Capital Gain, Other Source,
Salary.
We have covered these five major heads of income so far.
Today we are going to start a very new, great topic.
And the name of the topic is TDS, Tax Deducted at Source.
Today's topic is TDS.
T-D-S I am sure you must have heard this word before from
someone or the other.
It is said that if you are reducing payment, are you
deducting TDS?
I will buy you from top to bottom without deducting TDS.
These are some things that you must have heard before.
Now what is TDS?
First let us try to understand its meaning.
What is TDS?
What is its full form?
When does it work and when does it not?
Let me open my notepad.
And take it towards the white screen.
Look friends, we have become so high tech these days.
Once upon a time, the teacher used to tell us to look at
the black board.
I am telling you to look at the white board.
It is the same. Everything is turning black and white.
Come here.
Sir, you are wasting a lot of time.
Nobody is wasting time. Come here.
Tax Deducted at Source
This is the name of our topic.
VAT Tax
Which you deducted on your source.
What does deducting on source mean?
For example, if I am paying you and you have given me some
services and if I am paying you for something then the
income tax that you should be paying which you will be
deducting from the government
I am deducting it on your behalf.
Did you understand?
For example, this is a person.
His name is Amar.
And he is paying someone else.
His name is Anthony.
Okay? He is paying someone for something.
For example, he is paying Rs. 1 lakh.
Now, the Rs.
1 lakh that he is paying
First, we will see what is he paying for?
Is he paying for salary?
Is there a contract to do something?
Is he paying under that contract?
Is he paying for rent?
Is there a transaction to buy or sell a property for which
he is paying?
Have such things happened?
First, we have to classify which transaction is taking
place.
What is the transaction?
This has to be classified.
After that, the person who is paying because taxable will
be in whose hands?
In Anthony's hands.
Payment is going to Anthony.
Will Anthony pay his income tax on this Rs.
1 lakh?
In this case,
Anthony's income tax will be deposited by Amar.
How will he deposit?
He will deduct some percentage from it.
For example, he has deducted Rs. 10,000 from it.
How much will he pay him?
Rs. 90,000.
Rs. 90,000 will go to Anthony.
Where will the remaining Rs.
10,000 go?
Will Amar keep that money in his pocket?
No, sir.
The Rs.
10,000 that Amar has will be deposited by the government.
Rs. 10,000.
On whose behalf?
On Anthony's behalf.
If a person is paying for something, first, we have to
classify what he is paying for.
Because every transaction has a different rate.
Whatever payment I am making to that person, his income
tax, the income tax of that payment which will be deposited
on that income, will not be deposited by the other party.
I will go and on behalf of the other party,
I will deposit it.
The Rs.
1 lakh that Anthony is getting, whose source is it?
Who is giving it?
Whose source is it?
Who is getting the money from?
Whose source is it?
Amar.
What is Amar doing?
He is deducting the tax.
Tax deducted at source.
I am starting from the basics.
I am not doing anything technical.
Tax deducted.
Who? Amar.
Whose? Anthony's.
Who is Amar?
The source who is giving the payment.
Where will it be deposited?
It will be deposited by the government.
Anthony's tax.
Sir, why is Amar being so kind to him?
Anthony can himself go and deposit his tax.
Why is Amar being so kind, generous to him?
What is the purpose?
Sir, if you want to know the purpose, please understand
this with me.
What is the purpose?
Why did TDS come?
What is the logic behind it?
If you earn income today, when will you deposit your income
tax on it?
Next year?
If you earn Rs.
1 lakh today, when will you deposit your tax on it?
Next year?
When will the government get the money?
Next year.
Right now, this year, the government has no money left.
Whatever money the government gets, it will come next year.
What did the government say?
Payment will come after a year.
Why don't we do this?
If after a year, this person's income tax is 30%, why don't
we collect 5%, 10%, 2% from him today?
The balance that is left, when he files his return next
year, we will take it from him.
If this thing didn't exist,
I am saying, for example, it is 2020.
Here, a person earned an income of Rs.
1 lakh.
On this, for example, there was a tax on it
of Rs. 30,000.
Let's assume that there was a tax of Rs.
30,000 on this.
So, this tax of Rs.
30,000, will it be deposited in 2021?
Will it be deposited here?
The government will get Rs.
30,000 after a year.
My development activities can stop.
If I am the government, if I have to allocate funds, my
development activities will stop for a year.
Why don't I do this?
I will bring a provision that I have to deposit Rs.
30,000 here.
He will say, yes.
So, do one thing.
When you are earning here, give us Rs.
10,000 today.
And deposit the remaining Rs. 20,000 here.
What will that do?
There will be an accountability.
The money you have earned, now you have to deliberately
show it in your records, in your books of accounts, in your
books.
You will have to show the income of No.
1 because you have already deducted a tax of Rs.
10,000 on it.
And it was not your intention to deduct it.
It was the responsibility of the person who is paying you.
We have not placed any responsibility on you.
We know that if we place any responsibility on you, you
will do anything.
That is why we have placed the responsibility of the person
who will pay you.
Who is he? He is the source.
What will he do?
He will deduct your tax and pay you.
The government will get Rs. 10,000 today.
The government's development activities will be completed.
And the remaining Rs.
20,000, when you file your return, deposit it.
This is the point.
Sir, isn't this harming the taxpayer?
If I am working for Rs.
1,00,000 today,
I am getting less money.
I am getting Rs. 90,000.
Yes, absolutely. It is a loss.
The government sees its own benefit in many things.
It is a loss.
For example, you have earned Rs.
100 crores this year.
If you had earned 100 crores this year, and on top of that,
let's say, your income tax was 30 crores.
Now, when would you have deposited 30 crores?
If you had earned this year, would you have deposited it
the next year?
Would you have deposited it the next year?
In 2020, if you had earned 100 crores, your tax would have
been 30 crores.
Let's say, when it was your turn to deposit the tax, when
it was your turn to file the return, at that time, you were
reading the biography of Vijay Mallya or Nirav Modi, and
you were so inspired by them, that when it was your turn to
deposit the tax of 30 crores, you ran away.
The government's tax was 30 crores.
The 30 crores that the government should have received,
they couldn't.
So, what would the government say?
We could have done something better than this.
When this person was receiving 100 crores, when he was
receiving the money, we would have deducted his tax there.
Now, even if he had to go abroad, at least, the government
would have received 10 crores or 5 crores.
Now, nothing is coming.
Sir, there were a lot of such problems in practical life.
That's why the government said, let's do one thing.
So that after a year, our money doesn't go down.
The SAC is earning income today, the tax will be paid on it
next year.
If my money doesn't go down for a year, if his intention
doesn't change,
I will recover some percentage of it today.
I am the government, I will recover some percentage of it
today.
If I catch this person directly, he will do something or
the other.
If I catch him directly, he might not even show up.
He might just run away.
That's why I put a responsibility on him.
The person who is paying him, who is he?
His name is Source.
Now, the same Source, who is paying him, he will cut the
tax and pay it.
And the rest of the tax, will be deposited in the
government's account.
Sir, this is the concept of TDS.
Just understand the concept.
You are earning money, you won't get all the money.
Some money will be deducted.
Why will it be deducted?
Your income tax, your income tax, is being deposited by
someone else.
Who is depositing it?
Source.
With whom you are receiving it.
On your behalf, you are depositing your tax to the
government.
Sir, this is the concept.
On different types of payments, there are different types
of TDS.
There are different rates.
When and how to cut the TDS?
We will discuss this in detail.
First, did you understand the basic concept?
Did you understand the basic concept?
Now, when does the TDS get deducted?
When does it get deducted?
Either when the payment is being received.
When the payment is coming, either deduct it then.
Sir, it is also possible that the other party does not pay
me.
I am giving services to them.
I am giving my services to them.
I am depositing my bills.
But whenever I call them, to get my payment done, they say,
yes, we are getting it done.
We are seeing it, we are understanding it.
The bank's server is not working.
The cheque book is over.
The pen's ink is over.
We will get your payment done.
The payment did not come.
The whole year is over.
The payment did not come.
It was due, but...
If I have worked for 100 crores, the payment, although I
did not receive it, but it was due.
If I...
We say, accrual basis of accounting.
If you have studied in 11th standard, mercantile basis.
Accordingly, in my profit and loss account,
I will show my sales, my revenue.
Whether I have received it or not.
It has become my income.
Now, when it has become my income, my income tax will also
be imposed on it.
So, the simple thing is, when the income tax will be
imposed, the government will become active again.
If its income tax has to be imposed, it is an income of 100
crores, a tax of 30 crores has to be imposed, then why
don't you receive some money from it today itself?
Sir, payment is there, but when in your books, the person
who is giving, has credited your account,
he has not paid you, but he has passed his general entry.
He has credited your account.
He has not paid yet.
Even then,
the liability of TDS will be imposed on that person.
Whose liability is it?
The one who is paying you.
It is not your liability.
You are already worried.
You have already given services.
After giving services, you are getting some money deducted.
It is not your responsibility.
It is the responsibility of the payer, the source,
to deduct your tax and deposit it with the government.
He has deducted your tax,
but he is still doing the work.
He has deducted your tax, but he is not depositing it with
the government.
It is not your responsibility, sir.
It is not your responsibility.
Who will be caught?
He will be caught.
He has deducted your tax, but he has kept you in this
darkness that your tax has been deducted.
You are happy that the income tax of 30 crores had to be
paid next year.
10 crores has gone.
I will pay 20 crores next year.
Is this your delusion?
Is that delusion giving you that I have deducted your tax?
But, what is Jhol Japata doing?
He is not depositing it with the government.
All the responsibilities that will come, the interest
penalty that will come, that person will pay.
You will not have any problem.
What if that person forgets to deduct it?
If he forgets to deduct it, then it can be a genuine case.
You will get 100% in your hands.
If that person does not deduct it, then in that case, it
will become your responsibility that you file your return
and deposit the tax that is being paid.
These are some basic points.
I will continue to cover them in the future.
Did you understand the basics?
What is the purpose of TDS?
When is TDS generally deducted?
Either when you receive the payment or when you are not
receiving the money.
The other party has passed a general entry in their books.
Even then, the responsibility of deducting TDS will fall on
that person.
Absorb it up to this point.
I am stopping this lecture here.
Absorb it once.
In the next lecture,
I will start with new sections about the rates on which
payments
TDS is deducted.
I will stop here.
Thank you very much.