TAX DEDUCTION AT SOURCE [TDS]

1 TAXDEDUCTIONATSOURCE [TDS] By :CAAbhijit & EDUCATION CESS ON RATES OF 197: CERTIFICATE FOR DEDUCTION AT LOWER 197A: NO DEDUCTION TO BE MADE IN CERTAIN 197: SUMMARY 206AA: REQUIREMENT TO FURNISH PERMANENT ACCOUNT : DUTY OF PERSON DEDUCTING LIMIT FOR PAYMENT OF LIMIT FOR FURNISHING : ISSUANCE OF TDS PROCEDURAL ASPECT OF 201: CONSEQUENCES OF FAILURE TO DEDUCT OF PAY SUMMARY (WEF ) 192: TDS ON 193: TDS ON SECURITIES (PAID TO RESIDENTS) : TDS ON DIVIDENDS (PAID TO RESIDENTS) 194A: OTHER INTEREST : PAYMENTS TO QUESTIONS: : Assesseerequirestopaytaxonhisincomebyway of: DEDUCTION & Collection of Tax at SOURCE : Governed by Section 192 to 196D Direct Payment by assessee Advance tax or SelfAssessment tax: Section & EDUCATION CESS ON RATES OF 197: CERTIFICATE FOR DEDUCTION AT LOWER RATE IfAOsatisfiedthattotalIncomeofrecipientj ustifiesdeductionatlowerratesornodeducti onatthetimeofpaymentattheratesinforceund ertheprovisionsofsection192, 193, 194, 194A,194D,194-I,194K,194L 197A: NO DEDUCTION TO BE MADE IN CERTAIN CASES Notwithstandinganythingcontainedinsectio n194orsectionnodeductionoftaxshallbemade inTDSinthecaseofanindividual, whoisresidentinIndia, ifhisestimatedtotalincomeofthepreviousye arinwhichsuchincomeistobeincludedincompu tinghistotalincomewillbenil.

2 (SelfDeclarationhastobeMade). 197: SUMMARY CHARTS ectionIncomeCertificationDeduction197 Lower Income(All)AO CertificationLower DeductionORNo Deduction197 A(1A)Pervious YearTotal IncomeisNil / Below limit(Individual)Self DeclarationNo Deduction197 A(1B)Pervious YearTaxable Incomeis NIL(Individual)AO CertificationLower DeductionORNo 206AA: REQUIREMENT TO FURNISH PERMANENTACCOUNT NUMBER Notwithstandinganythingcontainedinanyoth erprovisionsofthisAct, anypersonentitledtoreceiveanysumorincome oramount,onwhichtaxisdeductibleshallfurn ishhisPANtodeductor, failingwhichtaxshallbedeductedatthehighe rofthefollowingrates,namely: Attheratespecifiedintherelevantprovision ofthisAct; or Attherateorratesinforce.

3 Or Attherateof20%. Nodeclarationundersection197A Pay 10 Lacs without PAN to ProfessionalFirm?2 PAN provided but of Associated firm/Invalid PAN?3 Individual gives declaration in197 Abut without PAN?4 Company make application to AO under section197but without PAN?5 Payment to NR & as per DTAA, TDS rate is 10%? 206AA Pay 10 Lacs without PAN to Professional Firm20%2 PAN provided but of Associated firm/Invalid PAN20%3 Individual gives declaration in197 Abut without PAN20%4 Company make application to AO under section 197 butwithout PANAO willignoreApplication5 Payment to NR & as per DTAA, TDS rate is 10%20%(Notwithstanding ) : DUTY OF PERSON DEDUCTING TAX Anypersondeductinganysuminaccordancewith theprovisionsofTDSsection,shallpaywithin theprescribedtime, thesumsodeductedtothecreditoftheCentralG overnment.

4 FileTDS returnwithinprescribed Limit For Deposit Of TaxWhen Tax isdeducted Personother thanGovernmentWhere income or amountis credited or Paid in theMonth of MarchOn or before 30thAprilIn any other CaseOn or before 7 days fromthe end of the month inwhich The DEDUCTION is made Income tax is due u/s 192(1A)13 TIME LIMIT FOR PAYMENT OF LIMIT FOR FURNISHING RETURNSQ uarterForm 24 QForm 26Q1stJuly 15thJuly 15th2ndOctober 15thOctober 15th3rdJanuary 15thJanuary 15th4thMay 15thMay 15th1424 Q Salary26Q Other than : ISSUANCE OF TDS CERTIFICATEP articularsTDS on SalaryTDS on Non SalaryFormForm No 16 Form No 16 APeriodicityAnnualQuarterlyDue Date upto whichTDS CertificatesShould be issued31stMay of Followingrelevant FY15 days from due date ofFurnishing Return.

5 30thJuly 30thOctober 30thJanuary PROCEDURAL ASPECT OF TDS: AOshouldgivecreditofTDSwithoutproduction ofTDScertificate. Form16A willbegeneratedthroughTINcentralsystem& uniqueTDScertificateisgeneratedwithUIN. CertificatecanbesignedusingDigitalSignat ureorManualSignature. Intimationu/s200 Aisnoticeundersection156.(FinanceAct2012 ) 201: CONSEQUENCES OF FAILURE TO DEDUCT OF PAY TDSP articularsDescriptionFailure to Deductor Failure to PayTDS(Section 201(1))Interest U/S 220 Uptoamount not deducted or U/S 221- 1% pm from date on which tax wasdeductible to order u/s 201(1)Late DEDUCTION OrLate Payment ofTDS(Section 201(1A)) 1% from date on which tax was deductible toactual date of DEDUCTION (Actual date of DEDUCTION Actual Date ofPayment ) InterestingAmendmentbyFAct2012 Deductorcannotbetreatedasassesseeindefau ltwheredeductorhasfailedtodeductTDSbutde ductee(R)haspaidthetaxdirectly.

6 Has furnished his return of income under section 139; has taken into account such sum for computing income in such returnof income; and has paid the tax due on the income declared by him in such return ofincome, and furnishes a certificate to this effect from an accountant insuch form as may be prescribed then assessee will not be regarded asassessee-in -default. TDSnotdeductedButdeducteehastakenamounti nIncomeandFiledhisreturnandpaidtaxoninco meThennodisallowanceundersection40(a)(ia ) SUMMARY (WEF 01/07/2012) FeeforLateFiling: section234E DeductorwillbeliabletopaybywayoffeeofRs2 00perdaytillthefailuretofileTDSstatement continues. PenaltyforlatefilingorNonfilingorfurnish ingincorrectinformationofTDSstatementasp ersection271H.

7 PenaltyofminimumRs10,000toRs1,00,000is applicablefor: Not filing the TDS statement within one year from the specifieddate within which he was supposed to file the statement Furnishing incorrect information in quarterly return of 192: TDS ON SALARY DeductatAveragerateofIncomeTaxcomputeont hebasisofrateinforce TDShastobedeductedatthetimeofPayment(Not onduebasis) Employeemayfurnishdetailsofotherincometo employerstodeducthighertax. (Losseswillnotbeadjustedotherthanlossfro mHouseproperty) Twoemployerormoreemployer detailsofpreviousemployermaybecollectedi nprescribedformat. 80G DEDUCTION to be ignored while calculating avg. 193: TDS ON SECURITIES (PAID TO RESIDENTS) Resident 10% Exception: NonListed- AmountofInterest<Rs5000&paymentthroughac countpayeecheque ListedCo.

8 Securityindematform SG& CGSecurity : TDS ON DIVIDENDS (PAID TO RESIDENTS) Dividends are exempt u/s 115-O. No TDS Dividendotherthan115-OdividendTDShastobe deducted. PrincipleofficerofIndianco. isrequiredtodeducttaxondeemeddividendu/s 2(22)(e) at10%. 194A: OTHER INTEREST- RESIDENT(OTHER THAN ON SECURITIES) 10% Limit Rs. 10,000/- for Bank, Co-Op Soc., PostOffice Limit Rs. 5,000/- for any other case : PAYMENTS TO CONTRACTORSTax is to bededucted at SOURCE : On the invoice value excluding the value of material, ifsuch value is mentionedseparately in the invoice; or On the whole of the invoice value, if the value of thematerial is not mentionedseparately in the rate: 1% where payment/credit is to an individual/HUF 2 % where recipient is any other person.

9 ,000/-, nodeductionhastobemadeatsource. However, iftheaggregateofallamountspaid/creditedo rlikelytobepaid/creditedexceedsinF. Y. Rs. 75,000/- : shallinclude: Advertising; Broadcastingandtelecastingincludingprodu ctionofprogrammesforsuchbroadcastingorte lecasting; carriageofgoodsorpassengersbyanymodeoftr ansportotherthanbyrailways; (NoTDSoftransportoperatorsif PANisprovided) catering; manufacturingorsupplyinga productaccordingtotherequirementorspecif icationofacustomerbyusingmaterialpurchas edfromsuchcustomer, but doesnotincludemanufacturingorsupplyinga productaccordingtotherequirementorspecif icationofacustomerbyusingmaterialpurchas edfroma person, of PaymentTax (%)194 BLottery/Crossword Puzzle > ,00030194 BBWinnings from Horse Race > Rs.

10 5,00030194D(Resident)Insurance Commission > ,00010194E(NR)Sportsmen, Sport Association, Entertainer20194G(R/ NR)Commission on Sale of Lottery Tickets > ,00010194H(Resident)Commission or Brokerage > ,000 Directors commission will cover u/s 19210194I(Resident) Rent > ,80,000 p. of Plant & Machinery Rent of Land, Building, Furniture, etc Accrual Basis21026 Quiz:Whether ST to be included while deducting TDS on Rent or Professional fees? of PaymentTax (%)194J(Resident)ProfessionalorTechnical FessRoyalty> ,00010 Anyremunerationorcommissionpaidtodirecto rofthecompany(Effectivefrom1 July2012). Otherthanthosecoveredundersection1921019 4LA(Resident)CompensationonCompulsoryAcq uisitionofimmovableproperty> ,00,000duringthefinancialyearuptoJuly1st 2012 From1stJuly2012thresholdlimitwillbe2,00, 00010194LB(NR)Interest on Infrastructure debt Fund5194LC(NR)Interest from Indian company Under loan agreement Infrastructure of PaymentTax (%)195(NR /Foreign Co)Interest, royaltyoranysumchargeableunderprovisiono fact(ExceptSalary)Rate 195A Whenanyamountispaidnetoftax,theTDShastob ecalculatedbygrossinguptheamount,sinceth etaxitself(Bornebythepayer)representinco meofassessee.