Is there a minimum amount up to which tax is not deducted?

Income Tax Act
1

Is there a minimum amount up to which tax is not deducted? And what are the consequences a deductor would face if he fails to deduct TDS?

2

Hi Pooja,

The Income-tax Act has prescribed a different threshold limit for deduction of tax at source under various sections. If the expenditure incurred/payment made during the year is below the threshold limit, then there is no requirement to deduct tax at source.

And about your second question, a deductor would face the following consequences if he fails to deduct TDS or fails to deposit it to the credit of Central Government’s account:

  • Disallowance of expenditure
  • Levy of interest

If you would like more details on this, visit PATTIC FAQ.

3

Thanks Robin and Pooja for sharing warmly and freely. This will be very helpful to the community