TDS filing for payments to medical professionals

Posted In | Finance | Accounting Software | India Accounting Tax

Tax Deducted at Source (TDS) is one of the modes of collecting income tax from the citizens of India by the central government. It ensures that tax is deducted from the income source itself, reducing the chances of tax evasion. This article will guide you through the process of TDS filing for payments made to medical professionals.

 

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Understanding TDS on Professional Services

As per the Income Tax Act, 1961, any person responsible for paying any income by way of professional services is liable to deduct TDS under section 194J. This includes payments made to medical professionals such as doctors, surgeons, nurses, and other healthcare practitioners. The current rate of TDS on professional services is 10% if the annual payment exceeds INR 30,000.

 

Procedure for TDS Filing

Here is a step-by-step procedure for TDS filing for payments made to medical professionals:
 

1. TDS Deduction

If the payment to the medical professional exceeds the threshold limit, the payer must deduct TDS at the rate of 10% at the time of credit of such sum or at the time of payment, whichever is earlier.
 

2. Deposit of TDS

The deducted TDS must be deposited to the credit of the central government within seven days from the end of the month in which the deduction is made. The payment can be made online on the Income Tax Department's website.
 

3. TDS Return Filing

After the TDS is deposited, a TDS return must be filed quarterly. This return should include details of the deductor, the deductees, and other necessary details of the transactions. The return can be filed online using the forms available on the IT Department's website.
 

4. Issue of TDS Certificate

After filing the TDS return, a TDS certificate must be issued to the deductee within 15 days from the due date of filing the TDS return. This certificate acts as a proof of the tax deducted and deposited to the government.
 

Penalty for Non-Deduction of TDS

If any individual fails to deduct or pay TDS, they may be liable to pay a penalty equal to the amount of TDS that was supposed to be deducted. Therefore, it is crucial for payers to understand and follow the guidelines for TDS deduction and filing.

 

TDS filing is a critical part of the taxation system in India. It ensures that tax is collected at the source, thus minimizing the chances of tax evasion. Individuals responsible for making payments to medical professionals should be aware of the rules and procedures for TDS deduction and filing to avoid any legal complications and penalties.