TDS PROVISIONSTDS PROVISIONS

KALYAN NATHKALYAN NATH

ASST. COMMISSIONER OF ASST. COMMISSIONER OF INCOME TAX,TDS,KOL.INCOME TAX,TDS,KOL.

OBJECTIVES OF TDSOBJECTIVES OF TDS

Regular inflow of Regular inflow of revenue for Governmentrevenue for Government

Checking of tax evasionChecking of tax evasion

Widening of tax baseWidening of tax base

IMPORTANT ISSUES - 1IMPORTANT ISSUES - 1

Nature of paymentNature of payment

Person responsible for paying Person responsible for paying

Specified payee Specified payee

Deduction of taxDeduction of tax Deposit of taxDeposit of tax

IMPORTANT ISSUES - 2IMPORTANT ISSUES - 2

TAN TAN

Issue of certificateIssue of certificate

Filing of returnFiling of return

Filing of statementsFiling of statements

Declaration u/s 197ADeclaration u/s 197A

Lower deduction certificate u/s Lower deduction certificate u/s 197197

NATURE OF PAYMENTS NATURE OF PAYMENTS

194K,194LAUnits/C.Acq

194JProf/Tec.

194IRent

194HCom/Brok

194GCom.Lot.

194FMF/UTI

194EENSS

194ENR Sports

194DIns. Com.

194CContract

194BBHorse rac.

194BLot/CW

S.194AOther Int.

S.194Dividend

S.193Int.-Sec.

S.192Salary

PERSONS RESPONSIBLE FOR PERSONS RESPONSIBLE FOR PAYING-1PAYING-1

ALL personsALL persons

(Except individuals (Except individuals & HUF in certain & HUF in certain

casescases))

PERSON RESPONSIBLE FOR PERSON RESPONSIBLE FOR PAYING-2PAYING-2

I AM A SMALL TIME I AM A SMALL TIME BUSINESSMAN/PROFESSIONAL?BUSINESSMAN/PROFESSIONAL?W.E.F. 01.06.2002, W.E.F. 01.06.2002, Individuals and Individuals and HUFsHUFs have to deduct tax at source if have to deduct tax at source if

turnover exceeds Rs.40 lacs turnover exceeds Rs.40 lacs (business), Rs.10 lacs (profession) for (business), Rs.10 lacs (profession) for

payments u/s.194A, 194C, 194H, payments u/s.194A, 194C, 194H, 194I & 194J. 194I & 194J.

SPECIFIED PAYEESPECIFIED PAYEE

All persons except – All persons except –

a) Quantum of payment is less than a) Quantum of payment is less than the prescribed limitthe prescribed limit

b) General exemption u/s.10 or b) General exemption u/s.10 or specific exemption in respective TDS specific exemption in respective TDS provisionprovision

c) Certificate issued by A.O. u/s.197 c) Certificate issued by A.O. u/s.197

d) Declaration in form 15G and 15Hd) Declaration in form 15G and 15H

DEDUCTION OF TAXDEDUCTION OF TAX Tax is to be deducted at the time of Tax is to be deducted at the time of credit or at the time of payment credit or at the time of payment whichever is earlier, at the whichever is earlier, at the prescribed rate prescribed rate In the case of salary, TDS is on In the case of salary, TDS is on estimated income. estimated income. In the case of payments other than In the case of payments other than salary, the TDS is on payments.salary, the TDS is on payments. Surcharge and Education Cess will Surcharge and Education Cess will be as applicablebe as applicable..

DEPOSIT OF TAX-1DEPOSIT OF TAX-1

In the case of salary –In the case of salary –

Within one week Within one week from the end of from the end of the month.the month.

DEPOSIT OF TAX-2DEPOSIT OF TAX-2In case of payments other than In case of payments other than salary-salary-

WWithin ithin ONE WEEKONE WEEK from the from the end of the month.end of the month.

Payments credited or paid on 31Payments credited or paid on 31stst March(last date of Accounting March(last date of Accounting Year), within two monthsYear), within two months. .

DEPOSIT OF TAX-3DEPOSIT OF TAX-3

Quarterly Payments in Quarterly Payments in Special CasesSpecial Cases

1515thth June, 15 June, 15thth Sept., 15 Sept., 15thth Dec., 15Dec., 15thth Mar. Mar.

Prior approval of JCIT. Prior approval of JCIT.

TANTANThe person responsible for deducting tax The person responsible for deducting tax at source has to apply for TAN in Form No. at source has to apply for TAN in Form No. 49B within one month from the end of the 49B within one month from the end of the month in which tax is deducted for the first month in which tax is deducted for the first time. time.

The TAN should be quoted in all challans, The TAN should be quoted in all challans, TDS Certificates, Quarterly Returns, TDS Certificates, Quarterly Returns, statements and correspondence. statements and correspondence.

Reformatted TAN.Reformatted TAN.

ISSUE OF TDS CERTIFICATES- 1ISSUE OF TDS CERTIFICATES- 1 (S 203 / R 31) (S 203 / R 31)

The person responsible for deducting tax The person responsible for deducting tax at source has to issue TDS certificates at source has to issue TDS certificates before the prescribed date-before the prescribed date-a) Normally, within one month from the a) Normally, within one month from the end of the month in which the tax was end of the month in which the tax was deducted at source.deducted at source.b) If the non-salary payment is credited or b) If the non-salary payment is credited or paid on 31paid on 31stst March then the TDS will be March then the TDS will be deposited by 31deposited by 31stst May – in such cases May – in such cases certificate should be issued by 7certificate should be issued by 7thth of June. of June. c) In case of consolidated certificate, c) In case of consolidated certificate, within one month from the end of the within one month from the end of the Financial Year.Financial Year.

ISSUE OF TDS CERTIFICATES- 2ISSUE OF TDS CERTIFICATES- 2 (S 203 / R 31) (S 203 / R 31)

Salary-cum-Return of income(Gross salary <=1,50,000)

16AA

Non-Salary16A

SalaryPerquisites (Gross salary =>1,50,000)

1612BA

PARTICULARSFORM NO.

ISSUE OF TDS CERTIFICATES - ISSUE OF TDS CERTIFICATES - 22

Deductors will not issue TDS Deductors will not issue TDS certificate in respect of tds made certificate in respect of tds made on or after 01.04.2008on or after 01.04.2008A statement of TDS will be issued A statement of TDS will be issued either by Income Tax either by Income Tax Department or an Agency Department or an Agency prescribed.(203AA & 206C(5)/ prescribed.(203AA & 206C(5)/ Rule 31AB) Rule 31AB)

FILING OF RETURNFILING OF RETURN

All TDS returns have to be All TDS returns have to be filed before due dates filed before due dates prescribed.prescribed.

+ In case of companies and + In case of companies and Government deductors, e-Government deductors, e-TDS returns are compulsory. TDS returns are compulsory.

FILING OF QUARTERLY FILING OF QUARTERLY STATEMENTS - 1STATEMENTS - 1

W.E.F. 01.04.2005W.E.F. 01.04.2005, the , the person responsible for person responsible for paying tax at source, shall paying tax at source, shall after depositing the TDS, after depositing the TDS, prepare and file Quarterly prepare and file Quarterly Statement with the TINFCs Statement with the TINFCs appointed by NSDLappointed by NSDL

FILING OF QUARTERLY FILING OF QUARTERLY STATEMENTS - 2STATEMENTS - 2

Non-salary26Q

Salary24Q

ParticularsForm No.

FILING OF QUARTERLY FILING OF QUARTERLY STATEMENTS - 3STATEMENTS - 3

When to file When to file the the

Quarterly Quarterly StatementsStatements

15th June

31st March

15th January

31st Decembe

r

15th Oct.30th Sept.

15th July30th June

Due DateQ.E.

FILING OF QUARTERLY RETURN FILING OF QUARTERLY RETURN BY BANKS (206A/RULE 31 BY BANKS (206A/RULE 31

AC/FORM 26QA)AC/FORM 26QA)

Banks are required to Banks are required to file Quarterly Returns file Quarterly Returns

in respect of the in respect of the payment of interest to payment of interest to the deposit holders the deposit holders

without TDS without TDS

DECLARATION U/S.197ADECLARATION U/S.197AForm No. 15HForm No. 15HBy any person who attains the age of 65 By any person who attains the age of 65 during the F. Y. in respect of the following during the F. Y. in respect of the following receiptsreceipts

+Interest on securities +Interest on securities +Dividend +Dividend +Interest other than interest on securities+Interest other than interest on securities+Payment in respect of deposit under NSS+Payment in respect of deposit under NSS+Income in respect of units+Income in respect of units

Provided tax payable by such person is Provided tax payable by such person is NIL.NIL.

LOWER DEDUCTION LOWER DEDUCTION CERTIFICATE U/S 197CERTIFICATE U/S 197

.Can be filed by any person..Can be filed by any person.

Application to be made in Application to be made in Form No.13Form No.13 to the to the

TDSAO.TDSAO.

Certificate will be issued Certificate will be issued by the TDSAOby the TDSAO

CONSEQUENCES OF FAILURE CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TO DEDUCT OR DEPOSIT THE

TAX AT SOURCE-1TAX AT SOURCE-1

The person responsible for deducting The person responsible for deducting tax at source will be held as assessee tax at source will be held as assessee in default and the in default and the taxtax he ought to he ought to have deducted at source or he ought have deducted at source or he ought to have deposited will be collected to have deposited will be collected from such personfrom such person. .

CONSEQUENCES OF FAILURE CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TO DEDUCT OR DEPOSIT THE

TAX AT SOURCE-2TAX AT SOURCE-2If the person responsible for If the person responsible for deducting or depositing the tax at deducting or depositing the tax at source, does not pay or deposit the source, does not pay or deposit the TDS then TDS then Interest Interest u/s.201(1A) @ 12% u/s.201(1A) @ 12% p.a. from the date on which the tax p.a. from the date on which the tax was deductible to the date on which was deductible to the date on which such tax is actually paid will be such tax is actually paid will be levied on the amount of such tax.levied on the amount of such tax.

CONSEQUENCES OF FAILURE CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TO DEDUCT OR DEPOSIT THE

TAX AT SOURCE-3TAX AT SOURCE-3

The tax along with interest shall be a The tax along with interest shall be a chargecharge upon all the assets of the upon all the assets of the person / company, responsible for person / company, responsible for deducting tax at source. deducting tax at source.

CONSEQUENCES OF FAILURE CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE- 4 (S. 40(ia))TAX AT SOURCE- 4 (S. 40(ia))

W.E.F. 01.04.2004 ( AY 2005-06), if the W.E.F. 01.04.2004 ( AY 2005-06), if the deductor does not deduct or deposit the deductor does not deduct or deposit the tax at source, he shall not be allowed tax at source, he shall not be allowed deduction while computing his own total deduction while computing his own total income- income- interest, commission & brokerage, interest, commission & brokerage, fee for professional & technical services fee for professional & technical services and contract and contract

PENALTY U/S 271CPENALTY U/S 271C

Penalty u/s.271C is leviable if the Penalty u/s.271C is leviable if the assessee fails to deduct the tax at assessee fails to deduct the tax at source within the prescribed time. source within the prescribed time. The penalty leviable is equal to the The penalty leviable is equal to the amount of tax the deductor failed to amount of tax the deductor failed to deduct.deduct.

FAILURE TO FURNISH THE TDS FAILURE TO FURNISH THE TDS RETURN – 272A(2)© RETURN – 272A(2)©

If the deductor fails to furnish the If the deductor fails to furnish the TDS returnTDS return within due date, he shall within due date, he shall be liable for penalty of Rs.100/- per be liable for penalty of Rs.100/- per day for the period of default.day for the period of default.

FAILURE TO FURNISH A COPY FAILURE TO FURNISH A COPY OF CERTIFICATE - 272A(2)(g)OF CERTIFICATE - 272A(2)(g)

If the deductor fails to furnish a If the deductor fails to furnish a certificatecertificate to the payee within the to the payee within the prescribed time, he shall be liable prescribed time, he shall be liable for penalty of Rs.100/- per day for for penalty of Rs.100/- per day for the period of default.the period of default.

FAILURE TO APPLY FOR TAN-FAILURE TO APPLY FOR TAN-272BB272BB

If the deductor fails to apply for If the deductor fails to apply for TAN TAN within the prescribed time, he shall within the prescribed time, he shall be liable for penalty of Rs.10000/-.be liable for penalty of Rs.10000/-.

PROSECUTION U/S.276BPROSECUTION U/S.276B

If the deductor If the deductor fails to depositfails to deposit the the tax deducted by him at source, he tax deducted by him at source, he shall be punishable with rigorous shall be punishable with rigorous imprisonment for a term from three imprisonment for a term from three months to seven years along with months to seven years along with fine. fine.

ON LINE TAX ACCOUNTING ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-1SYSTEM (OLTAS)-1

All India Data base of tax paid by the All India Data base of tax paid by the tax payers. tax payers.

It has a facility to check any payment It has a facility to check any payment made by the tax payer in the made by the tax payer in the Government Account.Government Account.

Important resource in giving credit to Important resource in giving credit to the tax payers while processing the tax payers while processing IT/TDS return. IT/TDS return.

ON LINE TAX ACCOUNTING ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-2SYSTEM (OLTAS)-2

Important features-Important features-

Only 2 challansOnly 2 challans

Only 1 copy with detachable Only 1 copy with detachable counterfoil counterfoil

For Advance tax and SA tax – For Advance tax and SA tax – Challan No.280Challan No.280

For TDS Challan No.281For TDS Challan No.281

ON LINE TAX ACCOUNTING ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-3SYSTEM (OLTAS)-3

5. The counterfoil has name of the branch – 5. The counterfoil has name of the branch – 7 digit BSR Code – date of deposit – Sl. 7 digit BSR Code – date of deposit – Sl. No. of challan (5 digits)No. of challan (5 digits)

6. No need to attach copy of challan with 6. No need to attach copy of challan with the tax returnthe tax return

7. Mention CIN – combination of 7 digit BSR 7. Mention CIN – combination of 7 digit BSR Code – date of deposit – Sl. No. of challan Code – date of deposit – Sl. No. of challan (5 digits)(5 digits)

8. PAN/TAN must be mentioned correctly 8. PAN/TAN must be mentioned correctly