TDS shifts part of the tax collection burden onto the payer — if your business pays salaries, rent, professional fees, or contractor invoices, you're very likely required to deduct and deposit TDS.
Common TDS-Triggering Payments
- Salaries — deducted progressively per the applicable income tax slab
- Rent payments to landlords
- Professional and consultancy fees
- Contractor and sub-contractor payments
- Interest payments on loans and deposits
Filing Deadline
TDS deducted in a given month must be deposited with the IRD within 25 days of that month's end — a rolling monthly obligation, not an annual one.
Freelancers & Foreign Currency Income
Freelancers receiving payment in foreign currency from overseas clients are generally subject to a flat 5% final withholding tax, simplifying their compliance compared to standard progressive TDS.
Consequences of Missing TDS
Late TDS deposits attract interest and penalties, and unremitted TDS can complicate your own audit and annual return, since the IRD cross-checks TDS deducted against what counterparties report as received.
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