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Difference Between Income Tax (ITR) Return And TDS?

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Income Tax: A levy imposed by the government on your taxable income earned in a financial year.

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TDS (Tax Deducted at Source): A part of your income tax deducted at source by the payer (e.g., employer, bank) before paying you. Acts as an advance payment towards your final tax liability.

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TDS Applicability: Applies to various income sources like salaries, interest, rent, professional fees, etc. Specific sections of the Income Tax Act govern the rate and applicability.

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Benefits of TDS: Streamlines tax collection, reduces tax evasion, and ensures timely payments. For taxpayers, it simplifies tax filing by pre-filling some information in your return.

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TDS Forms: Different TDS forms (e.g., 16, 192) are used for different income types. Understanding the relevant form helps with claiming deductions and ensuring correct tax credit.

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Claiming TDS Credit: When filing your income tax return, ensure you claim credit for all TDS deducted throughout the year to avoid double taxation.

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Non-Deduction of TDS: If TDS wasn't deducted or was deducted at an incorrect rate, you can rectify it by filing a revised return or claiming the difference during tax filing.

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Penalties for Non-Compliance: Both payers and deductees have specific responsibilities regarding TDS filing and payment. Non-compliance may attract penalties and interest charges.

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TDS Statement (Form 16/16A): Issued by the deductor (e.g., employer) summarizing the TDS deducted and deposited on your behalf. Crucial for claiming tax credit and filing your return.

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Stay Updated: Income tax laws and TDS rules are subject to change. Stay informed through government websites and reliable sources to ensure compliance and optimize your tax situation.