93  Deduction and collection of tax at source; Advance payment of tax; E-filing of income-tax returns

93.1 Concept of Pre-Paid Taxes

Indian tax law follows the pay-as-you-earn principle through three pre-paid mechanisms — Tax Deducted at Source (TDS), Tax Collected at Source (TCS), and Advance Tax — so that the Government’s revenue inflow is steady and tax evasion is reduced. The returns are filed electronically via the income-tax portal, with TRACES (TDS-CPC) handling reconciliation. Final liability is computed at year-end and adjusted against pre-paid taxes; balance is paid as self-assessment tax (§ 140A) or refunded with interest (§ 244A).

93.2 Tax Deducted at Source (TDS)

93.2.1 Concept

The payer (deductor) deducts a prescribed percentage of tax from a specified payment to the payee (deductee) and remits it to the Government on behalf of the payee.

93.2.2 Important TDS Sections (Snapshot)

TipMajor TDS Sections
Section Nature Threshold Rate
192 Salary Basic exemption Avg rate
193 Interest on securities ₹5,000 / ₹10,000 10 %
194 Dividend ₹5,000 10 %
194A Interest other than securities ₹40,000 (₹50,000 senior) bank; ₹5,000 others 10 %
194B Lottery winnings ₹10,000 per transaction 30 %
194C Contractor payments ₹30,000 single / ₹1 L aggregate 1 % indiv/HUF; 2 % others
194D Insurance commission ₹15,000 5 % indiv; 10 % others
194H Commission/brokerage ₹15,000 5 %
194I Rent ₹2,40,000 p.a. 10 % land/building; 2 % P&M
194IA Sale of immovable property ₹50 L 1 %
194IB Rent by individual/HUF (no audit) ₹50,000/month 5 %
194J Professional / Technical fees ₹30,000 10 % (2 % technical)
194N Cash withdrawals from bank ₹1 cr (₹20 L non-filers) 2 % (5 % > ₹1 cr non-filers)
194O Payments by e-commerce operator ₹5 L 1 %
194Q Purchase of goods ₹50 L (TO ≥ ₹10 cr) 0.1 %
194R Benefits / perquisites (business / profession) ₹20,000 10 %
194S Transfer of VDA / crypto ₹50,000 / ₹10,000 1 %
194T Partner payments (from FY 2025-26) ₹20,000 10 %
195 Payments to non-residents NA Per DTAA / Act

93.2.3 TDS Compliance Calendar

TipTDS Compliance
  • Deposit — by 7th of following month (March — by 30 April).
  • TDS return: 24Q salary, 26Q non-salary, 27Q non-resident, 27EQ TCS — quarterly.
  • TDS certificate: Form 16 (salary), Form 16A (non-salary), Form 16B (property), Form 16C (rent by §194IB), Form 16D (§194M).
  • PAN-based; 20 % rate if PAN not furnished (§ 206AA).
  • Higher rate for non-filers — § 206AB (twice rate / 5 %).
  • Interest §201(1A): 1 %/month delay deduction; 1.5 %/month delay deposit.
  • Penalty: § 271C (equal to TDS amount).
  • Late filing fee § 234E — ₹200/day.

93.3 Tax Collected at Source (TCS) — § 206C

TipKey TCS Items
  • Alcoholic liquor, scrap, tendu leaves, timber, minerals, parking lots, mining lease — 1-5 %.
  • Motor vehicle > ₹10 L — 1 %.
  • LRS / overseas remittance — 5 % > ₹7 L; 20 % for overseas tour package & general LRS > ₹10 L (post Oct 2023).
  • Sale of goods > ₹50 L — 0.1 % (TO > ₹10 cr) [§ 206C(1H) — to be repealed from 1 Apr 2025].

93.4 Advance Tax (§§ 207-211)

93.4.1 Liability

Every assessee whose estimated tax liability ≥ ₹10,000 must pay advance tax (excluding senior citizens with no business income — § 207(2)).

93.4.2 Instalments

TipAdvance Tax Schedule
Due Date All assessees (other than §44AD/ADA) §44AD/ADA presumptive
15 June 15 % cumulative —
15 September 45 % cumulative —
15 December 75 % cumulative —
15 March 100 % cumulative 100 % (lump sum)

93.4.3 Interest for Default

TipInterest Sections
  • § 234A — delay in filing return — 1 %/month.
  • § 234B — non-payment/short payment of advance tax (< 90 %) — 1 %/month.
  • § 234C — deferment of instalments — 1 %/month for default.

93.5 Self-Assessment Tax (§ 140A)

Any tax remaining after TDS/TCS/Advance tax is paid as self-assessment tax with interest before filing return.

93.6 E-Filing of Returns

93.6.1 Forms of ITR

TipITR Forms (current)
Form Applicability
ITR-1 (Sahaj) Resident individual with income ≤ ₹50 L (salary, 1 HP, other sources)
ITR-2 Individuals/HUF without business income
ITR-3 Individuals/HUF with business/profession income
ITR-4 (Sugam) Presumptive — § 44AD/ADA/AE (≤ ₹50 L)
ITR-5 Firms, LLPs, AOPs, BOIs
ITR-6 Companies (other than § 11 cos)
ITR-7 Trusts, political parties, § 139(4A/B/C/D) cos

93.6.2 Modes of Filing

Online (e-filing portal) with DSC for cos/firms required to audit; Aadhaar e-Verify for individuals; ITR-V signed and sent (legacy); now e-verification.

93.6.3 Due Dates (§ 139(1))

TipDue Dates
  • 31 July — non-audit individuals/HUF.
  • 31 October — audit cases.
  • 30 November — TP cases (§ 92E).
  • Belated return §139(4): 31 December of AY.
  • Updated return §139(8A): within 2 years from end of AY (with additional tax).
  • Revised return §139(5): 31 December of AY.
  • Defective return §139(9).

93.6.4 E-filing Process

  1. Register on incometax.gov.in (PAN-Aadhaar linked).
  2. Choose appropriate ITR form.
  3. Pre-filled data (AIS / TIS / Form 26AS).
  4. Compute tax; pay self-assessment (challan 280).
  5. Submit & e-Verify (Aadhaar OTP, EVC, DSC, net-banking, or send signed ITR-V to CPC Bengaluru within 30 days).

93.6.5 Verification & Refund

ITR-V → CPC Bengaluru; processing under § 143(1) — intimation; refund via direct credit; interest § 244A — 0.5 %/month.

93.7 Faceless Assessment & Appeals

TipFaceless Schemes
  • Faceless Assessment Scheme 2020 (§ 144B) — National Faceless Assessment Centre (NFAC).
  • Faceless Appeal Scheme 2020/2021 — CIT(A) faceless.
  • Faceless Penalty Scheme.
  • Dispute Resolution Committee (§ 245MA).

93.8 Important Pre-Paid Tax Concepts

TipImportant Concepts
  • Form 26AS — consolidated annual tax statement (TDS/TCS, advance tax, refund).
  • Annual Information Statement (AIS) and Taxpayer Information Summary (TIS).
  • PAN-Aadhaar linking — mandatory; non-link → PAN inoperative.
  • Tax Audit § 44AB — turnover thresholds.
  • Refund of excess TDS — § 240.
  • Compounding of offences — § 279(2).

flowchart TB
  PT[Pre-paid Taxes] --> TD[TDS §§192-195]
  PT --> TC[TCS §206C]
  PT --> AT[Advance Tax §§207-211<br/>15/45/75/100 %]
  PT --> SA[Self-Assessment §140A]
  PT --> EF[E-filing<br/>ITR 1-7 · 31 July/31 Oct]
    classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;

NoteDistractor warning

PYQ trap: Advance tax due if liability ≥ ₹10,000; instalments 15/45/75/100 % by 15 Jun/Sep/Dec/Mar. §194A bank interest threshold ₹40,000 / ₹50,000 senior. §194IA property TDS 1 % > ₹50 L. Belated/Revised return — 31 Dec of AY.

93.9 Practice Questions

Q 01AdvanceEasy

Advance tax is payable if estimated tax exceeds:

  • A₹5,000
  • B₹10,000
  • C₹50,000
  • D₹1,00,000
View solution
Correct Option: B
**₹10,000** under § 208.
Q 02First instalmentMedium

First advance-tax instalment due on:

  • A15 March
  • B15 June
  • C15 September
  • D15 December
View solution
Correct Option: B
**15 June (15 % cumulative)**.
Q 03192Easy

TDS on salary is under:

  • A§ 192
  • B§ 193
  • C§ 194A
  • D§ 195
View solution
Correct Option: A
**§ 192** — salary.
Q 04194IAMedium

TDS on sale of immovable property (> ₹50 L):

  • A0.5 %
  • B1 %
  • C2 %
  • D10 %
View solution
Correct Option: B
**1 %** (§194IA).
Q 05194JMedium

TDS rate on professional fees § 194J:

  • A5 %
  • B10 %
  • C15 %
  • D20 %
View solution
Correct Option: B
**10 %** (2 % technical/royalty since 2020).
Q 06194NHard

TDS on cash withdrawal beyond ₹1 cr is under:

  • A§ 194N
  • B§ 194Q
  • C§ 194O
  • D§ 194I
View solution
Correct Option: A
**§ 194N — 2 %**.
Q 07VDAHard

TDS on transfer of crypto/virtual digital asset is under:

  • A§ 194O
  • B§ 194Q
  • C§ 194R
  • D§ 194S
View solution
Correct Option: D
**§ 194S — 1 %** (since 1 July 2022).
Q 08PANHard

No-PAN higher rate under § 206AA:

  • A10 %
  • B15 %
  • C20 %
  • D30 %
View solution
Correct Option: C
**20 %** if PAN not furnished.
Q 09ITR-1Medium

Salaried individual with income ≤ ₹50 L files:

  • AITR-1 (Sahaj)
  • BITR-2
  • CITR-3
  • DITR-4
View solution
Correct Option: A
**Sahaj**.
Q 10BelatedMedium

Belated return must be filed by:

  • A31 July of AY
  • B31 December of AY
  • C31 March of next AY
  • DNo limit
View solution
Correct Option: B
**31 Dec of AY** (§ 139(4)).
Q 1126ASMedium

Consolidated tax statement is:

  • AForm 16
  • BForm 26AS
  • CAIS
  • DForm 16A
View solution
Correct Option: B
**Form 26AS** — annual tax statement.
Q 12234BHard

Interest for non-payment of advance tax:

  • A§ 234A
  • B§ 234B
  • C§ 234C
  • D§ 234D
View solution
Correct Option: B
**§ 234B — 1 %/month** for shortfall < 90 %.
Q 13Q4Medium

Last advance-tax instalment is due on:

  • A15 December
  • B15 March
  • C31 March
  • D15 April
View solution
Correct Option: B
**15 March (100 %)**.
Q 1416AMedium

TDS certificate for non-salary payments:

  • AForm 16
  • BForm 16A
  • CForm 16B
  • DForm 27D
View solution
Correct Option: B
**Form 16A** — non-salary; Form 16 — salary.
Q 15RefundHard

Interest on income-tax refund:

  • A§ 244A — 0.5 %/month
  • B§ 234A
  • C§ 201(1A)
  • D§ 220
View solution
Correct Option: A
**§ 244A — 0.5 %/month**.
Q 16Tax auditMedium

Due date for return in audit cases:

  • A31 July
  • B31 October
  • C30 November
  • D31 December
View solution
Correct Option: B
**31 October** (TP — 30 Nov).
Q 17FacelessMedium

Faceless Assessment Scheme is under:

  • A§ 143(1)
  • B§ 144B
  • C§ 263
  • D§ 271
View solution
Correct Option: B
**§ 144B** — Faceless Assessment 2020.
Q 18UpdatedHard

Updated return can be filed within:

  • A12 months
  • B2 years from end of AY
  • C5 years
  • DIndefinitely
View solution
Correct Option: B
**§ 139(8A)** — 2 years from end of AY (with additional tax).
Q 19Tax depositMedium

TDS deducted in any month must be deposited by:

  • ASame day
  • B7th of next month (March → 30 Apr)
  • C15th of next month
  • DEnd of quarter
View solution
Correct Option: B
**7th of next month** (March: 30 Apr).
Q 20MatchMedium

Match section with provision:

Section Provision
(i) § 192 (a) Advance tax interest
(ii) § 194IA (b) Salary TDS
(iii) § 234B (c) Property TDS
(iv) § 244A (d) Refund interest
  • A(i)-(b), (ii)-(c), (iii)-(a), (iv)-(d)
  • B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
  • C(i)-(c), (ii)-(d), (iii)-(b), (iv)-(a)
  • D(i)-(d), (ii)-(a), (iii)-(c), (iv)-(b)
View solution
Correct Option: A
Direct mapping.

93.10 Quick Recall

ImportantQuick recall
  • Pre-paid taxes: TDS + TCS + Advance tax; balance via §140A SAT.
  • TDS: §192 salary, §194A interest, §194C contract (1/2 %), §194I rent, §194IA property (1 %), §194J professional 10 %, §194N cash withdrawal, §194Q purchase of goods 0.1 %, §194R benefits, §194S VDA 1 %, §195 non-resident, §206AA 20 % no-PAN.
  • Returns: 24Q salary, 26Q non-salary, 27Q non-resident.
  • Forms: 16, 16A, 16B (property), 16C, 16D.
  • Advance tax §208 ≥ ₹10,000; instalments 15/45/75/100 % by 15-Jun/Sep/Dec/Mar; §234A/B/C interest 1 %/month; refund §244A 0.5 %.
  • ITR forms 1-7 — Sahaj/Sugam etc.; due dates 31 Jul / 31 Oct / 30 Nov; belated/revised §139(4)/(5) by 31 Dec; §139(8A) updated within 2 yrs.
  • Faceless §144B, AIS, TIS, Form 26AS; PAN-Aadhaar mandatory.