project on tds

TAX
DEDUCTION
AT
SOURCE (TDS)

Information to help you with TDS

Department of Revenue & Customs (HQ)
Ministry of Finance
Thimphu: Bhutan

Table of Contents
INTRODUCTION

4

PART I
1.
1.1
1.2
1.3
1.4

OVERVIEW
Definition of TDS
Scope of TDS
Objective
Legal Authority

5
5
5
5
5

2.
2.1
2.1.1
2.1.2
2.1.3

CORPORATE INCOME TAX
Full Tax Liability
Entities liable for TDS under Full Tax Liability
Incomes liable for TDS under Full Tax Liability
Rate of TDS under Full Tax Liability

6
6
6
6
6

2.2
2.2.1
2.2.2
2.2.3

Limited Tax Liability
Entities liable for TDS under Limited Tax Liability
Incomes liable for TDS under Limited Tax Liability
Rate of TDS under Limited Tax Liability

7
7
7
8

2.3

Income not liable for TDS

8

2.4

Companies under Tax Holidays

9

3.
3.1
3.1.1
3.1.2
3.1.3

BUSINESS INCOME TAX
Full Tax Liability
Entities liable for TDS under Full Tax Liability
Incomes liable for TDS under Full Tax Liability
Rate of TDS under Full Tax Liability

10
10
10
10
10

3.2
3.2.1
3.2.2
3.2.3

Limited Tax Liability
Entities liable for TDS under Limited Tax Liability
Incomes liable for TDS under Limited Tax Liability
Rate of TDS under Limited Tax Liability

11
11
11
12

3.3

Income not liable for TDS

12

3.4

Business Houses under Tax Holidays

13

4.

EXEMPT ORGANIZATION

13

5.
5.1

PERSONAL INCOME TAX
Persons or Individuals liable for TDS under PIT

14
14

5.2
5.2.1
5.2.2

Sources of Income liable for TDS
Income from Salary
Rental Income

14
14
15

5.2.3
5.2.4
5.2.5

Dividend Income
Interest Income
Income from Other Sources

15
16
16

PART II
6.

DEDUCTION, TDS CHEQUES, DEPOSIT,
ADJUSTMENT OF TDS, FINES & PENALTIES

ACCOUNTING

&
17

6.1
6.1.1
6.1.2
6.1.3
6.1.4

Deduction
Agencies responsible for deducting TDS
When should TDS be deducted?
TDS Cheques
TDS Certificate

17
17
17
17