Income Tax: Most of the people do not know what TDS is and how it can be saved from being deducted. If you do not know about it, then let us know the details about it in the news below…
Every person wants to save maximum tax on his hard-earned money. But, there are many types of taxes, about which many people are not aware. Many times you come to know when money is deducted from your salary. One such tax is TDS (Tax Deducted at Source).
Let us know what TDS is, why it is deducted and how it can be saved.
What is TDS?
In the mechanism of TDS, if an organization is liable to make payment to someone else, then after deducting tax at source, it will transfer the remaining amount to him. For example, if you work in a company, then it will first deduct tax from your fixed salary and give it to the government and then the remaining amount will come to your account.
How much is TDS deducted?
TDS rate is fixed on many incomes, but this is not the case with salary. It is decided according to the annual salary of the employee and his income tax slab. It usually ranges between 10 to 30 percent. The company often asks its employees for proof of tax-saving investments between January and March.
The net salary of the employee is arrived at after removing deductions and exemptions from the total annual income. Tax liability is determined on this. For this, the company bases this on the total net income of the employee and the tax slab applicable accordingly. Generally, the entire TDS is deducted from the salary from January to March.
What to do to save TDS?
You can fill Form 15G or Form 15H. 15G is for people below 60 years of age and 15H is for people above 60 years of age. Both of these are self-declaration forms. In these, a person states that his income is less than the taxable limit. Therefore it should be kept out of the tax net. Through these forms you can avoid paying TDS on earnings like interest or rent.
But, if your earnings exceed the prescribed limit, do not fill these forms. In these, huge information about PAN card has to be given. In such a situation, the government may come to know about your earnings and you may also be accused of tax evasion.
How to save TDS on investment?
You can also save TDS by investing in multiple savings schemes. Such as Public Provident Fund (PPF), National Pension System (NPS), Unit-Linked Insurance Plan (ULIP) and Sukanya Samriddhi Yojana. Investing in Tax Saving Fixed Deposits (TSFD) and Equity-Linked Saving Scheme (ELSS) funds are also good options to save TDS.
