The provision of tax at source (TDS) under Income Tax Act is given in chapter XVII. If the conditions given in various sections of this Chapter under I.T.Act – 194A to 194K are fulfilled, the tax has to be deducted by all persons including specified Individuals and HUF. Further to strengthen the compliance, the provision under section 40(a)(ia) provides that the expenditure on which tax was required to be deducted is not allowed to be deducted from business income if the tax was either not deducted or not deposited .
Therefore, it is extremely important to deduct the tax wherever it is required. But equally important is to know that there is one exception under which individuals and HUF are not at all responsible for deduction of tax at source even if their turnover is very high ( more than a crore or more than 25 Lakhs if carrying out profession).