TAX DEDUCTION & COLLECTION AT SOURCE

CA. DHRUV SETHDS@SETHSPRO.COM

WWW.SETHSPRO.COM

Coverage

Basic TDS provisions

Differentiating between the sections

Procedural aspects of TDS

Penal Consequences of TDS

Sec – 192 – TDS on Salary

Every person paying any income

chargeable under the head “Salaries”

exceeds

Rs. 2,00,000/- for Individual

Rs. 2,50,000/- in case of Senior Citizen

Rs. 5,00,000/- in case of Very Senior Citizen

Sec – 192 – TDS on Salary

Calculated at

Average Income Tax computed on the basis of rates in force.

Education Cess + SHE Cess to be applied

No Surcharge

The employee having income chargeable under any other head of income may inform such incomes and TDS to employer Form 12C

Sec 192(3) allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year.

Sec – 192 – TDS on Salary

Sec 194A – Interest

By any person (Not being Individual or HUF whose total turnover in previous year less than 40 Lacs) if Interest more than If payer is Bank - Rs 10,000/- or in Other Cases - Rs 5,000/-

At the time or Credit or payment which ever is earlier @10%

Sec 194C(1) – Contracts

Applies to -Central or State Government, Local AuthorityCorporation, Company or Co-op SocietyAuthority for housing accommodationSociety, Trust, University Partnership firmIndividual, HUF, AOP & BOI whose turnover in Immediately preceding year was more than 40 Lacs

Work contracts including:-Supply of labour for carrying out workAdvertisingBroadcasting & TelecastingCarriage of goods and passengers by any

mode of transport other than railways.Catering

Sec 194C(1) – Contracts

Exemption:- Rs 30,000/- per credit/payment and Rs 75,000/- per financial year Nil for transporter if PAN available.

On Invoice value, excluding value of material if value of material is mentioned separately.

At the time of payment or credit which ever is earlier

Sec 194C(1) – Contracts

Exemption Limit Rs 5,000/-

By all (Individual & HUF whose turnover in Immediately preceding year was more than 40 Lacs)

Deduction 10%

Sec 194H – Commission

Sec 194I – Rent

By all (Individual & HUF whose turnover in Immediately preceding year was more than 40 Lacs)

Deductible if More than Rs 1,80,000/- per year

Rent means any payment for the use of Building, Furniture or fittings - 10% Machinery or Plant or equipment's - 2%

Sec 194J – Professional & Technical

By all (Individual & HUF whose turnover in Immediately preceding year was more than 40 Lacs)

Exempt- Rs 20,000/- per year

Rate - 10% Fees for Professional Services Fees for Technical Services Royalty or non compete payments

Sec 195 - Payment to Non residents

Interest or other sums (Other than salary and dividend u/s 115-O) to Non residents or the foreign company

At the rate specified in Finance act or as per DTAA, which ever is beneficial to the assessee

From 1st July 2009 remittance can be made after filing form 15CA/15CB

Non Furnishing of PAN- Section 206AA

From 1st April 2010

Any person who is entitled to receive any sum on which tax is deductible shall furnish his PAN to the deductor then TDS is liable to be deducted

The Rate specified

Or 20%

Whichever is Higher

Tax Collection at Source- Sec 206C

Every person being a seller shall collect TCS

No Minimum Exemption limit

Alcoholic liquor for human consumption- 1%

Tendu Leaves 5%

Timber under forest lease, any other forest produce- 2.5%

Scrap 1%

Penal Consequences

Disallowance of expense U/s 40a(i)(a)

Interest @1.5% per month till default continues

Late filing of TDS return – Fees of Rs. 200 per day

Wrong filing of TDS return – Upto Rs. 1 lac

Prosecution for not depositing deducted TDS