TDS on Payment Made to Government

TDS on Payment Made to Government

-Dr. Lalit Kumar Setia

Whether TDS is deducted on payment made to Government or not?

Whenever any person pays any amount to Government in form of interest or dividend or any income, there is no need to deduct TDS on such payments. Because the TDS deducted is also paid to the Income Tax department, which is a part of Government, therefore, in case of any sum payable to the Government, the Reserve Bank of India, or to any corporation which is exempt from income tax, or to a mutual fund specified under clause 23D of section 10 of the income tax act.

TDS may be required to be deducted:

It there is any Government organization which carries its PAN number and is taxable in Income Tax Act, then TDS may be deducted as per norms whenever making any payment to it. For example, if a person is paying any amount to any individual/firm/company which has its PAN number whether that is with the stake of Government or not, but is subject to the filing of Income Tax Return, then the TDS will be deducted from the amount payable to such individual/firm/company. 

The persons who are required to deduct TDS should firstly take TAN Number and be registered for deduction of TDS. After deducting TDS it is required to deposit the same within the prescribed time limit.

*Copyright © 2021 Dr. Lalit Kumar. All rights reserved.

This article is written by Dr. Lalit Kumar Setia; a renowned author and trainer. The article was published on 8th August, 2021 and last updated on 4^th September, 2021. The writer can be contacted on lalitkumarsetia@gmail.com 

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