TAX DEDUCTION AT TAX DEDUCTION AT SOURCESOURCE

1. Concept of TDS – ‘ PAYE’(with holding tax-levy and collection of tax)

by the payer at the source of income

2. TCS – ‘Collect as it is being earned’

by the seller of specific commodities on the presumption that buyer will have taxable income

Advantages or otherwise of Advance Tax/Self Assessment Tax/Regular Assessment Tax vis-à-vis TDS

What is TDS / TCS ?

2. OBJECTIVES of TDS

Regular flow of resource to Government

Easy & speedy method of collecting tax

Preventing tax evasion

Widening of tax base

Most convenient & cheapest mode

Bringing new deductors into the tax net

3 3 -- Why TDS?Why TDS?

Concept of Pay As You Earn (PAYE) Concept of Pay As You Earn (PAYE) from 1from 1stst April onwards April onwards

Easy and SpeedyEasy and SpeedyRegular inflow of cash resources to Regular inflow of cash resources to

GovernmentGovernmentPreventing tax evasionPreventing tax evasionBringing new Bringing new assesseesassessees to tax net.to tax net.

4. ROLE OF TDS/TCS IN TOTAL DIRECT TAXES COLLECTION

About 40% of budget collection of the department to thetune of Rs. 8.47lakh Crores in F.Y. 2016-17was out ofTDS. (3.30lakh crores)

For F.Y. 2017-18 out of the budget target of 9.63 lakhCrores, the contribution of TDS is likely to exceed 40%.

Out of the budget target of 52900 Crores for theTamilnadu for F.Y. 2016-17, the TDS collection wasabout 21000 Crs. (i.e. a contribution of 40% ).

Role of Deductors is vital.

5. Players in TDS mechanism & their role

Deductors

Deductees

Banks-as a deductor/facilitator

Intermediaries of NSDL -TINFCs

CAs/ ITPs/ TRPs

Professional & Trade organizations – ICAI/

ICWAI/ FICCI, CII, RBA, Chambers of

commerce, etc. and

Income Tax Department (Paradigm shift)

66-- TDS AdministrationTDS Administration

CBDTCBDTADG (TDS) ADG (TDS) CCIT(TDS) CCIT(TDS) -- 66

Commissioners of IT (TDS) Commissioners of IT (TDS) –– 2626CCIT (TDS), ChennaiCCIT (TDS), Chennai

CIT (TDS),Chennai/CoimbatoreCIT (TDS),Chennai/CoimbatoreRange Range –– 1,2&3 Coimbatore, 1,2&3 Coimbatore, TrichyTrichy & &

MaduraiMaduraiITOs (TDS)ITOs (TDS)

77-- Why increase in TDS collectionsWhy increase in TDS collections?? IntroductionIntroduction ofof sectionsection 4040(a)((a)(ii)) –– 4040(a)((a)(iaia)) ww..ee..ff.. AA..YY.. 20042004--0505 && 20052005--0606

respectivelyrespectively –– disallowancedisallowance onon accountaccount ofof nonnon compliancecompliance toto thethe provisionsprovisionsTDSTDS –– royalty,royalty, interest,interest, FTSFTS oror anyany otherother sumsum paidpaid toto aa nonnon residentsresidents andandpaymentspayments mademade toto residentsresidents –– ledled toto increaseincrease inin TDSTDS CollectionCollection fromfromaboutabout 1010--2020%% ofof thethe TotalTotal DirectDirect TaxesTaxes inin thethe earlyearly 9090ss toto aboutabout 4040%% ininthethe recentrecent yearsyears..

SignificanceSignificance ofof thesethese provisionsprovisions cancan bebe seenseen fromfrom thethe demanddemand raisedraised totothethe tunetune ofof RsRs.. 1111,,000000 crorescrores whichwhich hadhad beenbeen nullifiednullified byby thethe SupremeSupremeCourtCourt decisiondecision inin thethe casecase ofof VodafoneVodafone IndiaIndia LtdLtd.. duringduring DecemberDecember 20112011..(on(on thethe CapitalCapital GainGain earnedearned onon accountaccount ofof itsits acquiringacquiring stakestake inin HutchisonHutchisonEssarEssar LtdLtd.. throughthrough itsits subsidiariessubsidiaries inin variousvarious taxtax havenshavens –– CaymanCaymanIslands/BritishIslands/British VirginVirgin IslandsIslands –– ReviewReview petitionpetition filedfiled byby CBDTCBDT ––AmendmentsAmendments broughtbrought outout restrospectivelyrestrospectively inin thethe FinanceFinance ActAct 20122012 ––RecentRecent effortsefforts forfor reconciliationreconciliation byby thethe MinistryMinistry ofof FinanceFinance..

AmendmentsAmendments havehave beenbeen broughtbrought inin thethe FinanceFinance ActAct 20122012&&20152015 whereinwhereinthethe stringentstringent provisionsprovisions ofof 4040(a)(a) ((ii)) && 4040(a)((a)(iaia)) hashas beenbeen wateredwatereddowndown..wefwef AYAY 20152015--1616 DISALLOWANCEDISALLOWANCE U/SU/S..4040a(a(iaia)) isis restrictedrestricted toto 3030%% ofofthethe expenditureexpenditure onon whichwhich TDSTDS provisionsprovisions werewere notnot resortedresorted toto..

8 8 -- Fixed ResponsibilityFixed Responsibility

Responsibility is on the person Responsibility is on the person responsible to deductresponsible to deduct

He/she is liable for penal action in He/she is liable for penal action in case is defaultcase is default

9 9 -- Responsibilities of a Responsibilities of a deductordeductor

Obtain TAN (Form 49B)Obtain TAN (Form 49B)Deduct at applicable ratesDeduct at applicable ratesRemit TDS before the due datesRemit TDS before the due datesFile quarterly eFile quarterly e--TDS statementsTDS statements Issue TDS certificatesIssue TDS certificatesObtain and quote PANs of Obtain and quote PANs of deducteesdeductees

10 10 -- TDS on What?TDS on What? u/su/s 195195 –– RoyaltyRoyalty Fee,Fee, Interest,Interest, ProfessionalProfessional Fees,Fees,

TechnicalTechnical FeesFees payablepayable oror otherother sumsum payablepayable outsideoutsideIndiaIndia // inin IndiaIndia inin NonNon--ResidentResident..

PayablePayable toto ResidentsResidents –– TDSTDS underunder variousvarious sectionssections..(S(S..193193 toto ss..194194))

DefaultsDefaults –– 11.. NotNot deducteddeducted 22.. NotNot depositeddeposited afterafterdeductiondeduction 33.. depositeddeposited afterafter duedue datedate inin thethe samesame FF..YY.. 44..DepositedDeposited afterafter duedue datedate ofof filingfiling thethe R/IR/I inin thethe nextnext FF..YY..

4040a(a(iaia)) notnot applicableapplicable defaultdefault 33.. AmendmentAmendment inin FinanceFinance ActAct inin 20122012 –– reliefrelief givengiven inin

defaultdefault 11 providedprovided 44 conditionsconditions areare satisfiedsatisfied –– ii..AssesseeAssessee notnot treatedtreated asas AssesseeAssessee inin defaultdefault u/su/s 201201 ininlieulieu ofof SCSC decisiondecision inin thethe casecase ofof HindustanHindustan CococolaCococolaProductsProducts LtdLtd.. HoweverHowever interestinterest u/su/s 201201((11A)A) attractedattracted..

11 11 -- When TDS?When TDS?

On payment basis On payment basis –– 192 / 194B / 192 / 194B / 194BB / 194LA / 194 194BB / 194LA / 194 –– IAIA

On Accrual or payment which ever is On Accrual or payment which ever is earlier in respect of all other earlier in respect of all other payments.payments.

12 12 -- Who should resort to Who should resort to tdstds??

44AB entities in P.Y.44AB entities in P.Y. Business Business –– Gross receipts Gross receipts

2 2 crores crores –– w.e.fw.e.f. A.Y. 17. A.Y. 17--1818

Profession Profession –– 50 lakhs (50 lakhs (w.e.fw.e.f. A.Y. 17. A.Y. 17--18) 18)

S.44ABS.44AB--GROSS RECEIPTS FROM NON GROSS RECEIPTS FROM NON CASH BASISCASH BASIS--Rs.2 croresRs.2 crores--wefwef AY 17AY 17--18(6% ON TO u/s.44AD)18(6% ON TO u/s.44AD)

13. Duties/Responsibilities of Deductors – To obtain TAN (Tax Deduction and collection Account

Number) – Form 49B online application through www.tinnsdl.com.

Deduct tax on - Salaries of employees if thetotal income is above the – non-taxable limit.

- Other payments if exceed the prescribed limits.

Remittance - Within stipulated time limit.

File quarterly e-TDS/e-TCS returns within prescribed time limits.

Issue of certificates in Form 16/16A within stipulated time limits.

Obtain PANs from the deductees a quote the same in all returns / certificates.(If PAN not given to deduct at maximum of a) rate as per Act b) rate in force c) 20%.)

14 14 -- TDS remittanceTDS remittance

In the case of government In the case of government deductorsdeductors

On the same day of deductionOn the same day of deductionFor others before 7For others before 7thth of next month.of next month.For March payment For March payment –– before 30before 30thth

April of next year.April of next year.

15 15 -- TDS certificatesTDS certificates

Form 16Form 16 ---- For deduction from For deduction from salariessalaries

Form 16AForm 16A ---- For deduction from For deduction from other paymentsother payments

16 16 -- Time limits for issue of TDS Time limits for issue of TDS certificatescertificates

Within a period of one month from the end of the Within a period of one month from the end of the month in which credit has been given or sums month in which credit has been given or sums have been paid to the payee/have been paid to the payee/deducteedeductee..

in case, account of the payee is credited on the in case, account of the payee is credited on the last day of the Accounting Year, before 30last day of the Accounting Year, before 30thth of of May, of the following financial year.May, of the following financial year.

In case of deduction from salaries, before 30In case of deduction from salaries, before 30thth of of May, of the following financial year.May, of the following financial year.

17 17 -- Quarterly eQuarterly e-- TDS/TCS ReturnsTDS/TCS Returns

Form 24QForm 24Q ---- TDS on salariesTDS on salariesForm 26QForm 26Q ---- TDS on other TDS on other

paymentspaymentsForm 27QForm 27Q ---- TDS on NR paymentsTDS on NR paymentsForm 27EQ Form 27EQ ---- TCSTCSNoteNote:: ToTo furnishfurnish physicalphysical controlcontrol

chargecharge inin FormForm 2727A/A/2727BB alongalong withwithee--TDSTDS // ee--TCSTCS ReturnsReturns..

18 18 -- Due dates Due dates –– filing of efiling of e--TDS TDS returns/ issue of TDS certificatesreturns/ issue of TDS certificates

Govt. Govt. DeductorDeductor OthersOthers Q.E. 30/06 Q.E. 30/06 ---- 31/0731/07-- 15/815/8 15/0715/07 -- 30/0730/07 Q.E. 30/09 Q.E. 30/09 ---- 31/1031/10-- 15/11 15/11 15/1015/10 -- 31/1031/10 Q.E. 31/12Q.E. 31/12 ---- 31/01 31/01 –– 15/02 15/02 15/0115/01 –– 31/0131/01 Q.E. 31/03 Q.E. 31/03 ---- 30/05 30/05 –– 15/0615/06 15/0515/05 -- 30/0530/05

Following FY Following FY Notification F. No. DGIT(S)Notification F. No. DGIT(S)--ADG(S)ADG(S)--2e2e--filing filing otificaion.106/20162016 dt29/4/2016otificaion.106/20162016 dt29/4/2016Note: For salary payments TDS certificate in Form 16 issued Note: For salary payments TDS certificate in Form 16 issued annually by 31/05 of the following F.Y.annually by 31/05 of the following F.Y.Notification F. No. DGIT(S)Notification F. No. DGIT(S)--ADG(S)ADG(S)--2e2e--filing filing notificaion.106/2016 notificaion.106/2016 dtdt. 22.06.2016.(online Filing) . 22.06.2016.(online Filing)

19. Consequences of defaults. To be treated as Assesee in default if tax not

deducted / not remitted in whole or part.

INTEREST.

- @1% per month from the due date on which tax was deductible to the date of deduction.

- @1.5% from the date of deduction till the date of remittance

PENALTY.

1. 271C - Non deduction tax – sum equal to amount of tax which was failed to be total deducted.

2. 271H w.e.f. 01.07.2012

- Failure to file quarterly e-TDS/ TCS returns furnishing incorrect information (From Rs. 10,000 to Rs. 1,00,000).

3. 272A(2)(k) - Failure to file quarterly e-TDS returns (till 30.06.2012).

4. 272A(2)(g) - Failure to issue TDS certificates– Rs. 100 per day.

Late filing fee.

u/s. 234E – w.e.f. 01.07.2012 – for delay in filing quarterly TDS returns, late filing fee of Rs. 200/- per day is to be paid before filing the e-TDS returns (subject to the maximum of TDS payable)

Circular No. 7/2014 of CBDT Dt. 04.03.2014.

For govt. deductors mapped to a valid AIN, due date of filing TDS returns for.

F.Y. 2012-13 - 2nd to 4th Quarter.

F.Y. 2013-14 - 1st to 3rd Quarter.

extended to 31.03.2014.

w.e.f. 01.06.2015 fee u/s. 234E to be considered while processing the e-TDS returns u/s 200A.

20. Role of Govt. Deductors – problems of TDS mismatch.

Deductor .Pivotal link in the entire TDS mechanism to play a proactive role.

TDS mismatch.

Due to non/incorrect/inaccurate/incolmpete/delay in filing e-TDS returns – deductees not able to get TDS credit/ infructuous demands raised / refunds due to them denied – forced to run around from pillar to post for no fault of theirs – A MAJOR AREA of COCERN in entire TAX INDIA.

Arithmetical / clerical errors and inaccuracies viz. non PAN/wrong PANs of deductees / error in TAN/PAN AY / major & minor codes/ section codes etc – leading to TDS mismatch to be taken care

21. Challenges-Bottlenecks faced by Govt. Deductors

Lack of awareness of provisions of TDS and understanding their duties mainly with regard to filing TDS returns.

Lack of practical knowledge of technology/ infrastructure involved in filing e-TDS returns on NSDL portal/ through TINFCs, downloading Form 16/16A from TRACES.

Lack of trained manpower & infrastructure facilities in govt. depts.

Huge dependence on TINFCs and lack of willingness to share the responsibility as mandated – ignorantia juris non excusat.

22. Specific defaults in Govt. Departments in the context of remittance by Book Adjustment/ Transfer vouchers and not by challans -(Attention – PAOs/DTOs/CDDOs).

In order to confirm the of provisions of TDS made by DDOs through book adjustment, the PAOs/DTOs/ CDDOs have to obtain AIN (Accounts Officers Identification Numbers) & file statements in Form 24G electronically with in 10 days from the end of month. They have to intimate the BINs (Book Identification Numbers) generated in TIN in respect of each DDO who --- have to mention the same in the e-TDS returns filed quarterly.

Areas of concern. Non obtaining of AINs.

Non/delay in filing form 24G on monthly basis to deposit the tax deducted by DDOs.

Non issue of BINs to DDOs.

Mismatch of TDS collection (GAP) as per form 24G filed by AIN holders Vs. actual amount deposited by State AG with ZAO – To reconcile.

Reasons AIN holders may have reported wrong TDS against the

respective DDOs mapped to them – to file correction statements.

AG may have committed error in filing AY while remitting tax – to be corrected by the TDS AO.

23. Strategies undertaken to improve compliance of Govt. Deductors - Recent initiatives.

Sensitizing the Govt. deductors and other stake holders with regard to need to comply with the provisions of TDS.

Intensifying spot verification.

Action against non/late filers - penalty u/s. 271H & fee u/s. 234E.

Monitoring compliance in filing of Form 24G and timely receipt of TDS payments of State Govts. through AG –penalty u/s. 272A(2)(m) – for non compliance to provisions of sec. 200(2A) w.e.f. 01.06.2015 Rs. 100/- per day. (delay in filing Form 24G.

TDS on salaryTDS on salary

Section 192Section 192

What is salary?What is salary?

Remuneration received/accruedRemuneration received/accrued

For services renderedFor services rendered

Express or implied contractExpress or implied contract

EmployerEmployer-- employee relationship employee relationship necessarynecessary

DeductorDeductor

EMPLOYEREMPLOYER responsibleresponsible toto paypay salarysalarytoto anan employeeemployee..

DeductionDeduction ifif thethe incomeincome exceedsexceeds thethemaximummaximum incomeincome notnot liableliable toto taxtax..

DeductionDeduction atat thethe timetime ofof payment,payment,

Exemption limit /rate of TDS (F.Y. 2017-18).

(A) All resident Assessees ( Below 60 years )

Total Income Tax payable

upto Rs. 2.5 L. Nil

Rs. 2.5 L. to Rs. 5 L. 5% of Total Income less Rs. 2.5 L.

Rs. 5 L. to Rs. 10 L. 25,000 + 20% of TI less Rs. 5 L.

Rs. 10 L. & above 1,25,000 + 30% of TI less Rs. 10 L.

(B) All Senior citizens (who has attained the age of 60 years during PY and those less than 80 years.

Total Income Tax payable

upto Rs. 3 L. Nil

Rs. 3 L. to Rs. 5 L. 10% of Total Income less Rs. 3 L.

Rs. 5 L. to Rs. 10 L. 20,000 + 20% of TI less Rs. 5 L.

Rs. 10 L. & above Rs. 1.2 L + 30% of TI less Rs. 10 L.

(C) Very Senior citizens (80 years or more ----)

Total Income Tax payable

upto Rs. 5 L. Nil

Rs. 5 L. to Rs. 10 L. 20% of Total Income less Rs. 5 L.

Above Rs. 10 L. Rs. 1 L + 30% of TI less Rs. 10 L.

No Surcharge, Educational cess @ 2% and secondary & Higher education cess @ 1% on tax payable is applicable.

Rebate u/s. 87A – If total income does not exceed Rs. 5 lakhs, resident individuals get a rebate of Rs. 5000/- or 100% of tax payable whichever is lower (w.e.f. A.Y. 2017-18).

Rate of TDS Contd…Rate of TDS Contd…

InIn casecase wherewhere thethe employeremployer agreesagrees toto paypaythethe taxtax onon portionportion ofof perquisitesperquisites notnotprovidedprovided byby wayway ofof monetarymonetary payment,payment, taxtaxpayablepayable thereonthereon isis atat thethe raterate ofof averageaverageraterate ofof taxtax onon thethe wholewhole incomeincome includingincludingthethe nonnon--monetarymonetary perquisiteperquisite..

Rate of TDS Contd…Rate of TDS Contd…

TheThe averageaverage raterate ofof taxtax isis arrivedarrived atat bybydividingdividing thethe taxtax payablepayable onon thethe totaltotalincomeincome includingincluding nonnon--monetarymonetaryperquisiteperquisite byby suchsuch totaltotal incomeincome andandmultipliedmultiplied byby 100100..

SuchSuch taxtax paidpaid byby thethe employeremployer (on(on nonnon--monetarymonetary perquisite)perquisite) isis exemptexempt incomeincomeinin thethe handshands ofof thethe employeeemployee..

Components of Govt. SalaryComponents of Govt. Salary

Basic Pay, Grade Pay,Basic Pay, Grade Pay,BonusBonusDADATATAHRA, etc.HRA, etc.

PerquisitesPerquisites

Amount paid by an employer for an Amount paid by an employer for an obligationobligation

It is a benefit in addition to normal salaryIt is a benefit in addition to normal salary

This may be an amenity or benefitThis may be an amenity or benefit

It may be free or at concessional rateIt may be free or at concessional rate

AccommodationAccommodation

Provided by Central or State Provided by Central or State GovernmentGovernment

License fee minus HRA other License fee minus HRA other recoveries made.recoveries made.

Plus value of furniturePlus value of furniture––10% of cost if owned by employer10% of cost if owned by employer––Actual hire charges if hired by employer.Actual hire charges if hired by employer.Generally value will be “NIL”.Generally value will be “NIL”.

Other perquisitesOther perquisites

Generally there are no other Generally there are no other perquisitesperquisites

If there are any, actual cost minus If there are any, actual cost minus cost recovered.cost recovered.

Medical perquisitesMedical perquisites

Treatment provided only in govt Treatment provided only in govt hospitalshospitals

Govt. authorised hospitalsGovt. authorised hospitalsPayments restricted to the eligible Payments restricted to the eligible

limitslimitsNo perquisite value in this regard No perquisite value in this regard

also.also.

AllowanceAllowance

a fixed amount of money given a fixed amount of money given periodically in addition to the salary periodically in addition to the salary for the purpose of meeting some for the purpose of meeting some specific requirements.specific requirements.

Max. exemption limits for each Max. exemption limits for each allowance have been given in the Actallowance have been given in the Act

Only those allowances for which Only those allowances for which exemptions have been provided in exemptions have been provided in the Act are exempt to the extent the Act are exempt to the extent mentioned.mentioned.

HRAHRA

Least of the following:Least of the following: Actual HRA ReceivedActual HRA Received Rent paid in excess of 10% of salaryRent paid in excess of 10% of salary 50% of salary in case the accommodation is 50% of salary in case the accommodation is

situated in one of the four metropolitan cities, situated in one of the four metropolitan cities, otherwise 40% of salaryotherwise 40% of salary

‘Salary’ ‘Salary’ includes DA if terms of employment includes DA if terms of employment so provide but excludes all other allowances so provide but excludes all other allowances and perquisites.and perquisites.

If HRA exceeds Rs. 3,000/If HRA exceeds Rs. 3,000/-- p.m., copies of rent p.m., copies of rent receipts to be obtained.receipts to be obtained.

Some of the other allowances and Some of the other allowances and exemption limitsexemption limits

Traveling allowanceTraveling allowance

Conveyance Conveyance allowanceallowance

Uniform allowance Uniform allowance Children Education Children Education

Allowance Allowance Hostel expenditure of Hostel expenditure of

childrenchildren

fullyfully exemptexempt subjectsubject toto thetheconditioncondition thatthat thethe samesame isisfullyfully incurredincurred forfor officialofficialpurposepurpose..

-- dodo –– -- dodo –– RsRs.. 100100//-- perper monthmonth perper

childchild uptoupto aa maximummaximum ofof twotwochildrenchildren

RsRs.. 300300//-- perper monthmonth perperchildchild uptoupto aa maximummaximum ofof twotwochildrenchildren

Some of the other allowances and exemption Some of the other allowances and exemption limits Contdlimits Contd ….….

Transport allowance Transport allowance to meet the expenses to meet the expenses for commuting from for commuting from residence to officeresidence to office TransportTransport allowanceallowanceforfor blindblind ororhandicapped,handicapped, etcetc..WefWef AYAY 20162016--1717

Rs. 1600/- per month

Rs. 3200/-per month

Other benefitsOther benefits

LeaveLeave TravelTravel ConcessionConcession:: SS..1010((55))

ForFor governmentgovernment servantsservants generallygenerallyfacilitiesfacilities areare asas perper thethe eligibleeligible limitslimits..

VRSVRS

Section 10(10C)Section 10(10C)Upto Rs. 5 lakhs.Upto Rs. 5 lakhs.No relief if exemption allowed under No relief if exemption allowed under

this section or vice versa.this section or vice versa.

DeathDeath--cumcum--retirement gratuityretirement gratuity

GratuityGratuity receivedreceived byby thethe GovernmentGovernmentemployeesemployees –– fullyfully exemptexempt

SectionSection 1010((1010))

Leave encashmentLeave encashment

amountamount ofof cashcash equivalentequivalent ofof leaveleavesalarysalary (Earned(Earned Leave)Leave) receivedreceived byby thethegovernmentgovernment servantsservants atat thethe timetime ofofretirementretirement onon superannuationsuperannuation ororotherwiseotherwise isis fullyfully exemptexempt..

SS.. 1010((1010AA)AA)

Commutation of pensionCommutation of pension

Received by government servants Received by government servants ––fully exempt.fully exempt.

s. 10(10A)s. 10(10A)

CHAPTER VI A DEDUCTIONSCHAPTER VI A DEDUCTIONSSectionSection 8080CC (deduction(deduction inin respectrespect ofof specifiedspecifiedinvestments)investments)-- investmentsinvestments notnot necessarilynecessarily fromfrom

incomeincome chargeablechargeable toto taxtax--onon paymentpayment basisbasisForFor example,example, LifeLife InsuranceInsurance Premium,Premium,-- limitedlimited toto 1010%% ofof thethe sumsum assuredassured ((ww..ee..ff.. AA..YY..

20132013--1414))1515%% forfor personspersons coveredcovered u/su/s..8080U/U/8080DDB(DDB(wefwef AYAY 20142014--1515)) ContributionsContributions toto GPF,GPF, RPF,RPF, PPF,PPF, EPF,EPF, etcetc.. DepositsDeposits inin PostPost OfficeOffice SavingsSavings BankBank ContributionsContributions toto ApprovedApproved superannuationsuperannuation fundsfunds NSSNSS--9292,, NSCNSC--VIIIVIII TuitionTuition feesfees fulltimefulltime educationeducation inin IndiaIndia -- feesfees forfor 22 childrenchildren only,only,

excludingexcluding donationsdonations andand developmentdevelopment fees/capitationfees/capitation feesfees.. HousingHousing LoanLoan repaymentsrepayments--costcost ofof purchase/constructionpurchase/construction ofof aa newnew

residentialresidential propertyproperty (except(except deductiondeduction claimedclaimed U/SU/S..2424)etc)etc.. –– restrictedrestricted totoRsRs 11,,5050,,000000//--EvidenceEvidence hashas toto bebe obtainedobtained byby thethe deductordeductor (employer)(employer) fromfrom thethededucteedeductee (employee)(employee) forfor allowingallowing thethe deductiondeduction beforebefore computingcomputing thethetaxtax toto bebe deducteddeducted atat sourcesource.. OnlyOnly principalprincipal amountsamounts andand notnot interestinterestcancan bebe claimedclaimed underunder thisthis sectionsection.. TheThe loanloan mustmust bebe forfor purchasepurchase andandconstructionconstruction andand notnot forfor repairsrepairs andand alterationalteration.. TheThe saidsaid propertyproperty shouldshouldnotnot bebe sold/transferredsold/transferred withinwithin 55 yearsyears

CHAPTER VI A DEDUCTIONS ContdCHAPTER VI A DEDUCTIONS Contd……

ContributionsContributions toto annuityannuity plansplans ofof LICLIC ororanyany

otherother insurerinsurer u/su/s 8080CCCCCC UptoUpto RsRs.. 11,,5050,,000000-- depositeddeposited outout ofof

incomeincome chargeablechargeable toto taxtax..EvidenceEvidence hashas toto bebe obtainedobtained forfor allowingallowing

deductiondeduction..

CHAPTER VI A DEDUCTIONS Contd…CHAPTER VI A DEDUCTIONS Contd…

Contributions to contributory pension Contributions to contributory pension schemescheme

of the Central Government u/s. 80CCD:of the Central Government u/s. 80CCD:

Employee’s contributions and employer’s Employee’s contributions and employer’s contributions enjoy deduction contributions enjoy deduction uptoupto 10% of salary 10% of salary each.Noweach.Now applicable to employees of other applicable to employees of other employers including private employers also.employers including private employers also.For contribution by individuals other than For contribution by individuals other than ‘employees’ ‘employees’ –– deduction restricted to 20% of Gross deduction restricted to 20% of Gross Total Income.wef AY2018Total Income.wef AY2018--19.19.WEF AY 2016WEF AY 2016--17 17 AddlAddl deduction of Rs.50000 deduction of Rs.50000 for employee contribution to NPS for employee contribution to NPS U/S.80CCD(1B)U/S.80CCD(1B)

The aggregate of deductions u/s.80C, 80CCC and The aggregate of deductions u/s.80C, 80CCC and 80CCD shall not exceed Rs. 1,50,000/80CCD shall not exceed Rs. 1,50,000/--(sec. 80CCE) (sec. 80CCE) –– does not include additional does not include additional deduction of Rs. 50,000 u/s. 80CCD(1B)deduction of Rs. 50,000 u/s. 80CCD(1B)

Sec.80CCG: Deduction for investment Sec.80CCG: Deduction for investment under equity savings scheme (Rajiv under equity savings scheme (Rajiv Gandhi equity saving scheme). Gandhi equity saving scheme). W.e.fW.e.f. A.Y. . A.Y. 20132013--14 14 –– Deduction 50% of amount Deduction 50% of amount invested or maximum Rs. 25,000/invested or maximum Rs. 25,000/--. . (provided GTI < 10 (provided GTI < 10 lakhslakhs) )

W.e.fW.e.f. A.Y. 2014. A.Y. 2014--15 deduction extended to 15 deduction extended to investment in units of equity oriented investment in units of equity oriented mutual funds. (GTI< 12 mutual funds. (GTI< 12 lakhslakhs))

CHAPTER VI A DEDUCTIONS CHAPTER VI A DEDUCTIONS ContdContd……

MedicalMedical InsuranceInsurance PremiaPremia (Section(Section 8080D)D) Deposits paid by Deposits paid by chequecheque, out of income chargeable to income tax, out of income chargeable to income tax Deduction Deduction uptoupto Rs. 25,000/Rs. 25,000/-- (Rs. 30,000/(Rs. 30,000/-- in the case of in the case of

senior citizens)senior citizens)-- w.e.fw.e.f. A.Y. 2016. A.Y. 2016--17. 17. Sums paid to effect or Sums paid to effect or to keep in force an insurance on the health of the to keep in force an insurance on the health of the assesseeassessee or his or his family members, meaning the spouse or dependent children.family members, meaning the spouse or dependent children.Sums paid in respect of insurance on the health of parents enjoy Sums paid in respect of insurance on the health of parents enjoy SEPARATE deductionSEPARATE deduction

Contribution to CGHS Contribution to CGHS –– Deduction available Deduction available w.e.fw.e.f. A.Y. 2011. A.Y. 2011--12 12 for for AssesseeAssessee/spouse and dependent children. (/spouse and dependent children. (w.e.fw.e.f. A.Y. 2014. A.Y. 2014--15 15 –– contribution to notified schemes of State and Central contribution to notified schemes of State and Central Government Government -- deduction available.)deduction available.)

Payment on account of preventive health checkup Payment on account of preventive health checkup –– deduction to deduction to the tune of Rs. 5,000/the tune of Rs. 5,000/-- (within the overall limit) to family and (within the overall limit) to family and parents. parents. –– w.e.fw.e.f. A.Y. 2013. A.Y. 2013--14.14.

Medical exp paid by Medical exp paid by chequecheque of very senior citizens if no of very senior citizens if no mediclaimmediclaim policy takenpolicy taken--aggregate deduction Rs.30000/ aggregate deduction Rs.30000/ WEF AY2016WEF AY2016--1717

CHAPTER VI A DEDUCTIONS Contd…CHAPTER VI A DEDUCTIONS Contd…

MedicalMedical treatmenttreatment ofof aa dependantdependant whowho isis aapersonperson withwith disabilitydisability (Section(Section 8080DD)DD) ShouldShould havehave incurredincurred anyany expenditureexpenditure andand proofproof

ofof suchsuch expenditureexpenditure hashas toto bebe obtainedobtained..--BLINDNESS,MENTALBLINDNESS,MENTALRETARDATION,AUTISM,CEREBRALRETARDATION,AUTISM,CEREBRALPALSY,MULTIPLEPALSY,MULTIPLE DISABILITYDISABILITY

ShouldShould furnishfurnish aa physicalphysical disabilitydisability certificatecertificateobtainedobtained fromfrom anan appropriateappropriate authorityauthority asasnotifiednotified underunder PersonsPersons withwith DisabilitiesDisabilities (Equal(EqualOpportunities,Opportunities, ProtectionProtection ofof RightsRights andand FullFullParticipation)Participation) Act,Act, 19951995..

ThisThis certificatecertificate shouldshould bebe inin FormForm NoNo..1010--IAIA DeductionDeduction ofof RsRs.. 7500075000//-- isis allowedallowed..(FIXED)(FIXED)

CHAPTER VI A DEDUCTIONS CHAPTER VI A DEDUCTIONS ContdContd……

Deduction for medical treatment Deduction for medical treatment (u/s. 80DDB):(u/s. 80DDB):

MedicalMedical treatmenttreatment forfor specifiedspecified diseasesdiseases forfor selfself

andand dependentsdependents..--AIDS,CANCER,CHRONICAIDS,CANCER,CHRONIC RENALRENAL

FAILURE,PARKINSONSFAILURE,PARKINSONS DISEASEDISEASE.. ThisThis deductiondeduction

isis notnot allowableallowable byby thethe employeremployer.. ThisThis isis toto bebe

claimedclaimed onlyonly byby filingfiling returnreturn ofof incomeincome

DeductionDeduction--RsRs..4000040000 (Rs(Rs..6000060000 forfor seniorsenior

citizenscitizens && veryvery seniorsenior citizenscitizens--RsRs..8000080000

wefAYwefAY1616--1717..

CHAPTER VI A DEDUCTIONS ContdCHAPTER VI A DEDUCTIONS Contd……

DeductionDeduction u/su/s 8080EE –– interestinterest onon loanloan takentaken forforhigherhigher educationeducation

AnyAny amountamount paidpaid asas interestinterest onon loanloan borrowedborrowed fromfromfinancialfinancial institutioninstitution oror approvedapproved charitablecharitable institutioninstitutionforfor pursuingpursuing thethe assesseeassessee oror his/herhis/her relative’srelative’s higherhighereducationeducation outout ofof incomeincome chargeablechargeable toto taxtax

AnyAny coursecourse ofof studystudy afterafter ++22 ofof state,state, centralcentralgovernmentsgovernments oror ofof bodiesbodies approvedapproved byby thethestate/centralstate/central governmentgovernment..

OnlyOnly forfor fullfull timetime coursecourse.. RelativeRelative meansmeans spousespouse andand childrenchildren.. IncludesIncludes studentstudent forfor whomwhom thethe assesseeassessee isis thethe legallegal

guardianguardian..

DeductionDeduction willwill bebe allowedallowed fromfrom thethe initialinitialassessmentassessment yearyear (the(the yearyear inin whichwhich thetheassesseeassessee startsstarts payingpaying interestinterest onon loan)loan)andand sevenseven succeedingsucceeding assessmentassessment yearsyearsoror untiluntil thethe interestinterest isis completelycompletely paidpaidwhicheverwhichever isis earlierearlier..EvidenceEvidence forfor interestinterest paymentpayment hashas toto bebe obtainedobtainedforfor grantinggranting deductiondeduction..

Deduction in respect of donations u/s 80GDeduction in respect of donations u/s 80G DeductionDeduction cancan bebe allowedallowed byby thethe

employeremployer onlyonly inin respectrespect ofof donationsdonationsmademade toto PrimePrime MinisterMinister ReliefRelief Fund,Fund,ChiefChief MinistersMinisters ReliefRelief Fund,Fund, EarthquakeEarthquakeFund,Fund, etcetc.. wherewhere 100100%% deductionsdeductions areareallowed,allowed, afterafter obtainingobtaining proofproof forfordonationsdonations..

InIn respectrespect ofof donationsdonations toto charitablecharitableinstitutions,institutions, deductionsdeductions cannotcannot bebeallowedallowed byby thethe employeremployer.. TheThe samesamehashas toto bebe claimedclaimed beforebefore thethe AssessingAssessingOfficerOfficer.. ((ww..ee..ff.. AA..YY.. 20132013--1414 nonodeductiondeduction ifif donationdonation moremore thanthan RsRs..1010,,000000 byby cash)cash)

Deduction in respect of rent paid by Deduction in respect of rent paid by individual not in receipt of HRA/self individual not in receipt of HRA/self

employed u/s 80GGemployed u/s 80GG NoNo residenceresidence inin placeplace ofof employmentemployment byby

indind/spouse/children/spouse/children.. PropertyProperty atat otherother placeplace notnot claimedclaimed asas

selfself occupiedoccupied.. SelfSelf declarationdeclaration inin formform 1010BABA.. DeductionDeduction –– leastleast ofof RsRs.. 50005000//-- perper

monthmonth // excessexcess ofof rentrent paidpaid overover 1010%% ofof TITI // 2525%% ofof TITI -- w.e.f. A.Y. 2017-18

DeductionDeduction ofof interestinterest onon depositsdeposits ininSBSB A/CA/C--SS..8080TTATTA ––uptoupto RsRs..1000010000//wefwef AYAY20132013--1414

DeductionDeduction inin casecase ofof personperson withwith disabilitydisability(Sec(Sec..8080U)U):: DeductionDeduction cancan bebe allowedallowed onon productionproduction ofof

physicalphysical disabilitydisability certificatecertificate obtainedobtained fromfrom ananappropriateappropriate authorityauthority asas notifiednotified underunderPersonsPersons withwith DisabilitiesDisabilities (Equal(Equal Opportunities,Opportunities,ProtectionProtection ofof RightsRights andand FullFull Participation)Participation) Act,Act,19951995..

ThisThis certificatecertificate shouldshould bebe inin FormForm NoNo..1010--IAIA DeductionDeduction ofof RsRs.. 7575,,000000//-- isis allowedallowed.. InIn casecase ofof severesevere disability,disability, RsRs.. 11,,2525,,000000//-- isis

allowedallowed ww..ee..ff.. AA..YY.. 20162016--1717..

Relief u/s.89(1)Relief u/s.89(1) ReliefRelief isis availableavailable whenwhen salarysalary isis receivedreceived inin

arrears,arrears, advance,advance, gratuitygratuity forfor pastpast servicesservicesspreadspread overover 55 yearsyears oror more,more, VoluntaryVoluntaryRetirementRetirement Compensation,Compensation, commutationcommutation ofofpension,pension, leaveleave encashmentencashment inin service,service, isisreceivedreceived..

TheThe reliefrelief isis allowedallowed soso thatthat thethe assesseeassessee doesdoesnotnot suffersuffer excessexcess taxtax thanthan withwith whichwhich thetheincomeincome wouldwould havehave beenbeen taxabletaxable ifif thethe samesamehadhad beenbeen taxedtaxed inin thethe relevantrelevant previousprevious yearsyears..

ApplicationApplication inin FormForm--1010EE hashas toto bebe obtainedobtainedfromfrom thethe employeeemployee..

Deduction Deduction –– How?How?

AddAdd.. TaxableTaxable portionsportions ofof salarysalary SalarySalary fromfrom otherother employersemployers ifif anyany (Form(Form

1212B)B)–– GenerallyGenerally doesdoes notnot arisearise.. LessLess PTPT andand EntertainmentEntertainment AllowanceAllowance

((11//55thth ofof salarysalary oror RsRs.. 55,, 000000//-- whicheverwhicheverisis less)less)

Add/LessAdd/Less:: OtherOther incomeincome (loss(loss onlyonlyunderunder HP)HP)

LessLess:: ChapterChapter VIAVIA DeductionsDeductions ComputeCompute taxtax

Deduction Deduction –– How?How?

TaxTax divideddivided byby 1212 DeductedDeducted proportionatelyproportionately overover aa periodperiod ofof

1212 monthsmonths.. CanCan increase/decreaseincrease/decrease duringduring thethe yearyear toto

adjustadjust forfor excess/deficitexcess/deficit inin deductiondeduction..

SECTION .194ISECTION .194I--Rent paymentsRent payments

TDS attracted u/s 194 ITDS attracted u/s 194 IPlant and machinery, equipments, Plant and machinery, equipments,

furniturefurnitureBuildings on payment/Buildings on payment/accuralaccural

whichever is earlierwhichever is earlierTDS on net rental payments TDS on net rental payments

excluding service tax.excluding service tax.New Section.194IBNew Section.194IB--wef 1/6/17wef 1/6/17--Tds Tds

on rent by on rent by indind//HufHuf not under not under S.44ABS.44AB--To deduct@5% if monthly To deduct@5% if monthly

Plant & Machnery hiredPlant & Machnery hired

VehiclesVehiclesComputers, laptopsComputers, laptopsXerox machinesXerox machinesAir conditioners,Air conditioners,Earth movers, Earth movers, Any other machineries, furniture, Any other machineries, furniture,

etc.etc.

Buildings on rentBuildings on rent

Occupied as office buildings, guest Occupied as office buildings, guest houses.houses.

Even hotel accommodations hired on Even hotel accommodations hired on regular basis.regular basis.

Threshold limit requiring no TDSThreshold limit requiring no TDS

Rs. 1,80,000/Rs. 1,80,000/--Paid or credited during Paid or credited during the year (the year (w.e.fw.e.f. 01.07.2010). 01.07.2010)

Rates of TDSRates of TDS

For Plant & MachineryFor Plant & Machinery@ 2%@ 2%For BuildingsFor Buildings@ 10% (@ 10% (w.e.fw.e.f. 01.10.2009). 01.10.2009)Recipients eligible to file self Recipients eligible to file self

declaration in Form15G/15Hdeclaration in Form15G/15H--U/S.197AU/S.197A--wef1/6/16wef1/6/16

TDS attracted onTDS attracted on

Advance rentAdvance rentArrears of rent Arrears of rent Lease deposit/premium Lease deposit/premium –– non non

refundable paid in advance on Long refundable paid in advance on Long Term lease transactions Term lease transactions –– 99 years 99 years egeg: SIPCOT Ltd./TATA REALITY LTD: SIPCOT Ltd./TATA REALITY LTD--516 CRS/FOXCONN INDIA 516 CRS/FOXCONN INDIA DEVELOPERS (P)LTD/MMRDADEVELOPERS (P)LTD/MMRDA

SECTION 194CSECTION 194C--Contract Contract paymentspayments

TDS u/s 194CTDS u/s 194C

New section 194C substituted New section 194C substituted w.e.fw.e.f. . 1.10.20091.10.2009

Types of contractsTypes of contracts

Printing of registers, forms, etc.Printing of registers, forms, etc. Works contractsWorks contracts Payment to electriciansPayment to electricians AMCsAMCs Advertisements in papers, TV channels other Advertisements in papers, TV channels other

than Doordharshanthan Doordharshan Transport contract for transport of goods and Transport contract for transport of goods and

passengerspassengers

Rates of deductionRates of deduction

1% on payments made to individuals 1% on payments made to individuals and HUFsand HUFs

2% on payments made to others2% on payments made to others

No contractor and subNo contractor and sub--contractor contractor differentiationdifferentiation

Threshold limitsThreshold limits

No TDSNo TDS If the value of single contract is Rs. If the value of single contract is Rs.

30,000/30,000/-- or lessor lessOr the aggregate value of Or the aggregate value of

payments made in a year does payments made in a year does not exceed Rs.1,00,000/not exceed Rs.1,00,000/-- ((w.e.fw.e.f. . 01.06.2016)01.06.2016)

Work Redefined Work Redefined w.e.fw.e.f. . 01.10.200901.10.2009

includesincludes manufacturingmanufacturing andand supplyingsupplying aaproductproduct asas perper thethe specificationspecification ofof thethecustomercustomer byby usingusing thethe materialsmaterialspurchasedpurchased fromfrom suchsuch aa customercustomer

DoesDoes notnot includeinclude manufacturingmanufacturing andandsupplyingsupplying aa productproduct asas perper thethespecificationspecification ofof thethe customercustomer byby usingusingmaterialsmaterials purchasedpurchased fromfrom personspersons otherotherthanthan thethe customercustomer

Transport ContractorsTransport Contractors W.e.fW.e.f. 1.10.2009. 1.10.2009

Contractors engaged in the business of Contractors engaged in the business of plying, hiring leasing goods carriages If plying, hiring leasing goods carriages If they furnish their PANs they furnish their PANs -- No TDS on No TDS on payments made to them. payments made to them. DeductorDeductor to to furnish statement of such payments made furnish statement of such payments made in Form15J to the department.in Form15J to the department.

WEF 1/6/15,contractor should own 10 WEF 1/6/15,contractor should own 10 or less goods carriages at any time or less goods carriages at any time during the PY.during the PY.

NoteNote

DeductionDeduction onon grossgross paymentspayments IfIf valuevalue ofof materialsmaterials shownshown separatelyseparately inin thethe invoice,invoice,

nono TDSTDS ww..rr..tt.. materialmaterial valuevalue –– AmendmentAmendment broughtbrought ininthethe FinanceFinance ActAct 20092009 –– InIn thethe aftermathaftermath ofof hugehugedemanddemand raisedraised inin thethe casecase ofof BajajBajaj AutoAuto LimitedLimited andandHyundaiHyundai IndiaIndia LtdLtd.. (all(all outsourcingoutsourcing contractscontracts asas perperspecificationspecification ofof thethe principalprincipal whereinwherein rawraw materialsmaterialssuppliedsupplied byby thethe principalprincipal andand rawraw materialmaterial purchasedpurchasedfromfrom outsideoutside andand bothboth shownshown separatelyseparately inin thethe invoiceinvoiceraisedraised byby thethe manufacturermanufacturer –– fallsfalls outsideoutside thethe netnetofof contractcontract u/su/s 194194C)WORKSC)WORKS CONTRACTCONTRACT VSVSCONTRACTCONTRACT OFOF SALESALE

OnOn advanceadvance paymentspayments alsoalso..

Survey Cases Survey Cases

Wheeling charges Wheeling charges –– Paid by owners Paid by owners of WTGs who are not captive users of WTGs who are not captive users for logging of power to the GRID.egfor logging of power to the GRID.eg--TANGEDCO to POWER GRID CORP TANGEDCO to POWER GRID CORP OF INDIA LTDOF INDIA LTD

Composite contracts Composite contracts –– Wind mills / Wind mills / ATMsATMs--SUZLON ENERGY SUZLON ENERGY LTD/DIEBOLD SYSTEMS LTDLTD/DIEBOLD SYSTEMS LTD

Acquisitions of Eggs in noon meals Acquisitions of Eggs in noon meals scheme.scheme.

SECTION.194JSECTION.194J--Fees for Fees for professional or technical servicesprofessional or technical services TDSTDS u/su/s 194194JJ ww..ee..ff.. 0101//0707//20122012 –– RemunerationRemuneration forfor

sittingsitting feesfees paidpaid toto DirectorsDirectors otherthanotherthan SalarySalary..InterInter connectivityconnectivity // PortPort // BandwidthBandwidth // LeaseLease linelinechargescharges –– NoNo humanhuman elementelement –– NoNo TDSTDS u/su/s 194194JJ ––HutchisonHutchison EssarEssar TelecomTelecom LimitedLimited –– SCSC..

No TDS on subsequent transfer of software without No TDS on subsequent transfer of software without any modification any modification w.e.fw.e.f. 01/04/2012 .. 01/04/2012 .

Applicability of s. 194J on payment by TPAs to Applicability of s. 194J on payment by TPAs to Hospitals on behalf of Insurance companies for Hospitals on behalf of Insurance companies for services rendered to the insured services rendered to the insured –– finality reached finality reached ––CBDT circular No. 8/2009.(Star health insurance CBDT circular No. 8/2009.(Star health insurance company/family health plan/in house TPAs. company/family health plan/in house TPAs.

RatesRates

@ 10%@ 10%Acquisition of software Acquisition of software –– it is a right it is a right

or license to use or license to use –– amounts to amounts to royalty royalty -- s. 194J/195.(s. 194J/195.(egeg-- Renault, Renault, Nissan Ltd/SIEMENS INDIA LTD.).Nissan Ltd/SIEMENS INDIA LTD.).

Payment to doctors who are on the Payment to doctors who are on the rolls of the company to be treated as rolls of the company to be treated as professional fees instead of salary.professional fees instead of salary.--EGEG

Threshold limit Threshold limit

No TDS No TDS uptFouptFo Rs. 30,000/Rs. 30,000/-- in a year. in a year. ((w.e.fw.e.f. 01.07.2010). 01.07.2010)

If If ReciepientReciepient is only in the call is only in the call centrecentrebusiness,TDSbusiness,TDS @2% @2% wefwef 1/6/171/6/17

Type of servicesType of services Retainer fees paid to advocates, etc.Retainer fees paid to advocates, etc. Interior decorators,Interior decorators, Technicians Technicians Payments to agencies to whom any work is Payments to agencies to whom any work is

outsourced.outsourced. Manpower agencies for recruitment Manpower agencies for recruitment Professionals engaged for training staffProfessionals engaged for training staff Payments to hospitals, doctors, etc.Payments to hospitals, doctors, etc. TPAs TPAs

S.194LAS.194LA

Compensation paid for acquisition of Compensation paid for acquisition of immovable property other than immovable property other than agricultural landsagricultural lands

Agricultural lands situated in cities Agricultural lands situated in cities are also exempt are also exempt

TDS @ 10% Liability if the TDS @ 10% Liability if the compensation exceeds Rs. compensation exceeds Rs. 2,00,000/2,00,000/-- in the year. in the year. (Rs. 2.5 (Rs. 2.5 lakhslakhs w.e.fw.e.f. 1/6/2016). 1/6/2016)

No TDS on No TDS on AWARD/AWARD/agreementwhichagreementwhich is is

S.193 S.193 --Interest on SecuritiesInterest on Securities -- CentralCentral -- StateState Government/Government/ LocalLocal

AuthoritiesAuthorities // CompaniesCompanies establishedestablishedbyby GovernmentGovernment –– TDSTDS @@ 1010%% --InterestInterest onon DebenturesDebentures (listed(listed ––unlisted)unlisted) –– exceedingexceeding RsRs.. 55,,000000//--ww..ee..ff.. 0101//0707//20122012..

SS..194194--DIVIDENDSDIVIDENDS--IndiancompanyIndiancompany payingpaying dividenddividendonon equity/u/sequity/u/s..22((2222)(e))(e)--TdsTds@@1010%% ifif exceedsexceeds RsRs.. 25002500//--..

194A 194A –– Interest other than Interest other than interest on Securitiesinterest on Securities

-- To a resident To a resident No TDS No TDS uptoupto Rs. 10,000/Rs. 10,000/-- -- in the case of in the case of

bank. For others Rs. 5,000/bank. For others Rs. 5,000/--@ 10% @ 10% w.e.fw.e.f. . 01/10/2009.01/10/2009.

NoNo TDSTDS ww..ee..ff.. 0101//0101//20132013 –– onon BB..GG..Commission,Commission, clearingclearing charges,charges, DepositoryDepositorychargescharges etcetc..

NoNo TDSTDS onon interestinterest onon depositsdeposits inin SBSBAccount,Account, CurrentCurrent A/cA/c.. NoNo TDSTDS ononprovisioningprovisioning onon interestinterest onon depositsdeposits onon dailydailybasisbasis usingusing CBSCBS –– forfor macromacro monitoringmonitoring..

TDSTDS onon interestinterest onon depositdeposit asas directeddirected bybyCourtCourt –– inin casescases ofof litigationlitigation andand depositdeposit ininthethe namename ofof RegistrarRegistrar –– TDSTDS CertificateCertificateshouldshould bebe inin thethe namename ofof depositordepositor..

NoNo TDSTDS onon incomeincome creditedcredited byby wayway ofofCompensationCompensation AwardedAwarded byby MotorMotor AccidentAccidentTribunalTribunal

LandLand compensationcompensation –– TDSTDS onon TimeTimeDepositDeposit inin thethe namename ofof AuthorityAuthority makingmakingthethe depositdeposit (if(if GovernmentGovernment nono TDS)TDS)

Pendency of proceedings in a Financial dispute, Pendency of proceedings in a Financial dispute, if deposit is made TDS on interest accruing in if deposit is made TDS on interest accruing in the name of the depositor. the name of the depositor.

No TDS for New Pension System Trust No TDS for New Pension System Trust ––Income Exempt u/s 10(44)Income Exempt u/s 10(44)

w.e.fw.e.f 01.06.201501.06.2015 Interest of time deposit includes RD interest.Interest of time deposit includes RD interest. Banks adopting CBS Banks adopting CBS –– interest to be computed interest to be computed

with reference to bank as a whole with reference to bank as a whole –– to check to check splitting of deposits.splitting of deposits.

Cooperative banks under the purview of TDS Cooperative banks under the purview of TDS u/s 194A(Interest paid by cooperative society u/s 194A(Interest paid by cooperative society not subject to TDS).not subject to TDS).

IssuesIssues –– Factoring charges.Factoring charges. Transactions among firms / companies in a Transactions among firms / companies in a

group group –– adopting cash / mercantile system of adopting cash / mercantile system of

Banks / NBFCs not resorting to TDS on accrual Banks / NBFCs not resorting to TDS on accrual basis on interest on cumulative deposit.basis on interest on cumulative deposit.

TDS not resorted to relying on certificate u/s. TDS not resorted to relying on certificate u/s. 197.197.

No TDS u/s. 194A by the borrowers of NBFCs No TDS u/s. 194A by the borrowers of NBFCs ––treating as hire transaction treating as hire transaction –– practical difficulty.practical difficulty.

Payment of upfront charges / service charges / Payment of upfront charges / service charges / processing charges / syndication fees.processing charges / syndication fees.

Capitalized expenditure.Capitalized expenditure. Form 13 Form 13 –– effective from date of issue effective from date of issue ––

specified amount specified amount -- often misused. often misused. ––egeg. . Misuse of Form 15G/15HMisuse of Form 15G/15H--Simplification Simplification

Procedure & Submission of declarationProcedure & Submission of declaration--Notifn.7 Notifn.7 &9/2016 &9/2016 dtdt 4/5/16 &9/6/16.4/5/16 &9/6/16.

Section 194BSection 194B

Winnings from Lottery Winnings from Lottery –– No TDS No TDS uptoupto10,000/10,000/-- (30%)(30%)

TDS on price money in kind. TDS on price money in kind.

Section 194BBSection 194BBWinnings from Horse Races Winnings from Horse Races –– 30%, 30%,

No TDS No TDS uptoupto Rs. 10,000/Rs. 10,000/-- ((wefwef1/6/16)1/6/16)

S.194HS.194H Commission or Brokerage Commission or Brokerage –– No TDS No TDS uptoupto

Rs. 15,000/Rs. 15,000/-- @ 5% @ 5% w.e.fw.e.f. 01/06/2016. 01/06/2016 Discount given by Cellular operator to Discount given by Cellular operator to

distributors distributors –– PrincipalPrincipal--Agency Relationship Agency Relationship ––Vodafone Cellular Ltd./Vodafone Cellular Ltd./BhartiBharti AirtelAirtel Ltd..Ltd..

Commission paid for credit card usageCommission paid for credit card usage Referral Fees Referral Fees

S.194DS.194DInsurance commission limit Insurance commission limit

15,000/15,000/-- w.e.fw.e.f. 01/06/2016 @ . 01/06/2016 @ 10%10%

Filing of 15G/15H is applicable Filing of 15G/15H is applicable wefwef

Section194Section194--IAIA

TDSTDS onon transfertransfer ofof immovableimmovable propertyproperty otherother thanthanagriculturalagricultural landland..

NoNo TDSTDS uptoupto RsRs.. 5050 lakhs,lakhs, 11%% TDSTDS onon salesaleconsiderationconsideration exceedingexceeding RsRs.. 5050 lakhslakhs byby thethepurchaserpurchaser // transfereetransferee ww..ee..ff.. 0101//0606//20132013 –– atatthethe timetime ofof paymentpayment byby anyany modemode whichwhich everever isisearlierearlier –– asas perper SS.. 203203..BuyerBuyer liableliable toto deductdeduct taxtaxu/su/s 194194IAIA.. NNeedeed notnot taketake TANTAN.. ToTo paypay taxtax -- inin2626QB(QB(challanchallan cumcum returnreturn withinwithin 3030daysdays fromfrom thetheendend ofof thethe monthmonth inin whichwhich deductiondeduction isismademade..(Notin(Notin..3030//20162016dtdt2929//44//1616))

Major defaults and consequencesMajor defaults and consequences NonNon--deduction/nondeduction/non--remittance remittance ––

Will be deemed to Will be deemed to assesseeassessee in defaultin defaultPenalty u/s 221(1)Penalty u/s 221(1)Penalty u/s 271C equal to amount of Penalty u/s 271C equal to amount of TDSTDS

For failure to remit TDS For failure to remit TDS ––Prosecution u/s 276BProsecution u/s 276B

Amendment in Finance ActAmendment in Finance Act, 2012/2015, 2012/2015Section 234E Section 234E –– Fees for default in furnishing quarterly Fees for default in furnishing quarterly

returns returns –– Rs. 200/Rs. 200/-- for every day defaultfor every day defaultSection 271H Section 271H –– Penalty for failure to furnish quarter Penalty for failure to furnish quarter

returns. returns. –– Rs. 10,000 to Rs. 1 Rs. 10,000 to Rs. 1 lakhlakh in addition to Fees in addition to Fees u/s 234E (not only for failure to furnish quarterly u/s 234E (not only for failure to furnish quarterly returns but also for furnishing incorrect information in returns but also for furnishing incorrect information in the returns)the returns)

THANK YOUTHANK YOU