Tax deducted at source..................

PRESENTATION ON TDS OTHER
THAN SALARIES UNDER INCOME
TAX ACT AND RELATED ISSUES
Presented by
CA Manoj D. Chandak
Malani Somani Chandak & Associates
Chartered Accountants

TDS – OVERVIEW
2
• Persons responsible for making payment of income
covered by the scheme of tax deduction are required to
deduct tax at source at the prescribed rate.
• Tax so deducted should be deposited within the
prescribed time.
• Moreover, return of tax deduction at source i.e.
quarterly statement should be submitted within the
specified time.
• Form No. 16A for Tax Deducted at Source should be
issued within prescribed time.
Prepared by CA Manoj D. Chandak

3
Consequences of Default
• Assessee deemed to be an assessee in default if any person
who is responsible to deduct and after deduction to pay tax,
failed to do so is deemed to be an assessee in default in
respect of the tax.
• Interest under section 201(1A):
• 1% per month or part of the month from the date on
which tax was deductible to the date of deduction.
• 1.5% per month or part of the month from the date of
deduction to the date of payment.
• Disallowance of certain expenditure under section 40(a)

• Penalty under section 221
– Up to the amount of TDS.
– Attachment and sale of Movable & Immovable
property.
– Arrest of the Assesses and his detention in prison.
• Penalty under section 272A(2)(k) (up to 30/06/2012) – Rs.100/- per
day or to the amount of TDS whichever is less.
• Penalty under section 271H (w.e.f. 01/07/2012) – Min. Rs.10000 or
Max. Rs.1,00,000/-if a person fails to submit quarterly TDS/TCS return
on or before the due date or if a person furnishes incorrect
information in these quarterly returns.
• Late Filling Fee u/s 234E (w.e.f. 01/07/2012) – Rs.200/- for every day
during which the failure continues or to the amount of TDS whichever
is less. This fees will be in addition to other consequences under the
Act. 4
Consequences of Default

TDS PROVISIONS IN BRIEF
Section of
I.T Act
Nature of expenditure / payment Rate of
TDS
192 Salaries Average
rate
193
194A
194D
Interest on Securities
Other Interest
Insurance Commission
10%
194DA Payment in respect of Life Insurance Policy 2%
194B Winning from Lottery / Crossword puzzle /
Card games / Other games
30%
5

Section of
I.T Act
TDS
194C Payments to contractors (including advance
payments)
a)Contractors who are individuals or HUF
b)Other Contractors
1%
2%
194H Commission or Brokerage 10%
194I Rent
a)Plant, Machinery or Equipment
b)Land, Building or Furniture
2%
10%
6

Section of
I.T Act
TDS
194J Fees for Professional / Technical services /
Royalty and other sums referred to in Sec.
28(v)(a)
10%
194LA Compensation for Compulsory Acquisition
of Immovable Property
10%
194IA TDS on Sale of Property 1%
7

8
194A - Interest other than interest on
securities
• If the interest in the financial year exceeds Rs.5,000/-
where the payer is any other person. If payer is Banking
Company or Co-operative Society or Post office and
interest is payable on time deposit/ notified deposit
scheme with post office, the said limit is Rs. 10,000/- for
TDS.
• 10% Income Tax to be deducted at the time of credit or
payment whichever is earlier.
• Form No. 16A to be issued within 15 days from the due
date of filling of TDS return.

9
194C - TDS on Contractors
Contract Includes Work Contracts
Where,
Work includes:
• Advertising
• Broadcasting and telecasting including production of
programmes for broadcasting and telecasting
• Carriage of goods and passengers by any mode other than
railways
• Catering
• Manufacturing or supplying a product according to the
requirement or specification of a customer, by using material
purchased from the customer (Job Work)

10
• Rates: If recipient is an Individual or HUF, 1%. In all other
cases, 2%
• If recipient is a transport contractor and he furnishes his PAN to
the payer, TDS rate is NIL other wise TDS is to be deducted @
20%, but Should File TDS Return. In Amount Column write
“Total Amount Paid” and in TDS Deducted Column write “TDS
Deducted Amount”(If Deducted) or Write “0.00” (if not
deducted, but please Select ‘T’ as Reason for Non-Deduction)
• Tax is not required to be deducted if any single sum credited or
paid does not exceed Rs. 30000/- or aggregate of such sums
does not exceed Rs. 75000/- in a year

11
Reimbursement of expenses:
• The term A “u refers to the Gross Amount paid
under the contract. Hence, reimbursement of expenses
would also attract TDS. If separate bill is given for
reimbursement of expenses then no TDS is applicable.
• Since section 194C refers to any sum paid, TDS will be
attracted on the service tax portion also.

12
Advertising contracts:
A person makes payment to an advertisement agency.
The agency makes payments to its artists and the media.
• Payment to agency – 1% u/s 194C
• Payment to artists – 10% u/s 194J
• Payment to Doordarshan is not liable to TDS as it is a
government agency.

13
194H- Commission or Brokerage
• At the time of credit or payment whichever is
earlier when aggregate sums credited / paid
during the financial year exceeds Rs.5000/-.
• At the rate of 10%

194 I - Rent
14
• At the time of credit or payment whichever is
earlier when the aggregate sums credited/paid
during the financial year exceeds Rs. 1,80,000/-
• Rate 10% for Land or Building
• Rate 2% for others
• As per circular no. 4/2008 dated 28th April 2008,
TDS is not required to be deducted on service
tax charged on Rent.

15
194 J - Fees for Professional or
Technical Services/ Royalty
• At the time of credit or payment whichever is earlier
when the aggregate sums credited/paid exceeds Rs.
30,000/-.
• At the rate of 10% as TDS
• As per circular no. 1/2014 dated 13th Jan 2014, TDS is
not required to be deducted on service tax charged on
Professional and Technical fees if .

Section 194 LA- Compensation for
acquisition of immovable property
Prepared by CA Manoj D. Chandak 16
Any person responsible for paying to a resident any sum,
being in the nature of compensation or the enhanced
compensation or the consideration or the enhanced
consideration on account of compulsory acquisition, under
any law for the time being in force, of any immovable
property (other than agricultural land), shall, at the time of
payment of such sum in cash or by issue of a cheque or draft
or by any other mode, whichever is earlier, deduct an amount
equal to ten per cent of such sum as income-tax thereon:

Provided that no deduction shall be made under this
section where the amount of such payment or, as the case may be, the
aggregate amount of such payments to a resident during the financial
year does not exceed Two hundred thousand rupees.
-If Aggregate amount of consideration exceeds Rs. 2,00,000/-
-TDS Rate 10%
Agricultural La d Means agricultural land in India including land situated in
any area referred to in items (a) and (b) of sub-clause (iii) of clause (14)
of section 2;
Section 2(14) (iii) : Agricultural land in India, not being land situate—
(a) in any area which is comprised within the jurisdiction of a municipality
(whether known as a municipality, municipal corporation, notified area
committee, town area committee, town committee, or by any other name) or
a cantonment board and which has a population of not less than ten thousand
or

(b) in any area within the distance, measured aerially,—
(I) not being more than two kilometres, from the local limits of any
municipality or cantonment board referred to in item (a) and which has
a population of more than ten thousand but not exceeding one lakh;
or
(II) not being more than six kilometres, from the local limits of any
a population of more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any
a population of more than ten lakh.

194IA - TDS on Sale of Property
• As per Finance Bill of 2013, TDS is applicable on sale of
immoveable property wherein the sale consideration of the
property exceeds or is equal to 50,00,000 (Rupees Fifty
Lakhs).
• Sec 194 IA of the Income Tax Act, 1961 states that
for all transactions with effect from June 1, 2013, Tax @ 1%
should be deducted by the purchaser of the property at the
time of making payment of sale consideration.

• TD“ a ou t as per For 26QB should e e tered i the field
Basic Tax I o e Ta o the Ba k s e -portal.
•TDS certificate (Form 16B) will be based on Basic Tax (I co e
Tax) only.
• Taxpayer/ Buyer are advised to save the Acknowledgement
Number for downloading the Form 16B from TRACES website.
•TDS certificate (Form 16B) will be available for download from
the TRACES website after at least 2 days of deposit of tax amount
at the respective Bank.
•Click on View Acknowledgment Number under TDS on Property
by providing the relevant details for retrieving the
Acknowledgment Number.

21
Deduction & Payment of TDS
Cases where tax is not deductible or deductible at lower
case
 Apply in Form No.13 for no deduction/collection of tax or
deduction/ collection of tax at a lower rate.
 Form No. 15G to be made by an individual or a person (not
being a company or a firm) claiming certain receipts without
deduction of tax.

22
Cases where tax is not deductible or deductible at
lower case
 Form No. 15H to be made by an individual who
is of the age of sixty years or more claiming
certain receipts without deduction of tax.

23
• In relation to Salary payments, TDS has to be done on
payment basis. In case of Other Payments, TDS has to be
done at the time of credit to the account of the payee or actual
payment, whichever is earlier.
• Where PAN of the deductee is not quoted or wrongly quoted,
TDS has to be made at 20% or applicable rate, whichever is
higher.
• TDS is to be paid on the date of deduction when Government
Officer pays through Book entry.
• TDS has to be paid by 7th of the following month (by 30th
April in case the amount is credited or paid in the month of
March).

Due Date for e-Return and
Form Number
24
• Quarterly e-TDS returns have to be filed as per due dates.
• For the quarter ended March, Returns can be filed upto
May 15th ,of the succeeding F.Y. For all other quarters,
returns have to be filed within 15 days from end of the
quarter.
• For Government deductor additional 15 days are given
from such due dates.
• In case of Salary - FORM 24Q,
• In case of Other Payments - FORM 26Q
• In case of TCS, FORM 27EQ has to be filed.

Issue of TDS Certificate
• For salary-Form No.16 to be issued annually on or before
May 31 of the financial year.
• For non salary-Form No.16A to be issued quarterly.
• Deductor issuing TDS certificates in form no. 16 or 16A
by downloading from the TIN-NSDL website, shall
authenticate these by either using digital signature or
manual signature.
25

CA Certificate
• CA certificates to be obtained by TDS Deductors in Form
26A for relief from consequences of Non / Short
deduction of TDS from payments to Residents / Non
Resident [first proviso to sec201(1)/ first proviso to sec
206(6A) inserted by Finance Act 2012 w.e.f.1-7-2012]

CA Certificate
• New Provision Exempts payers from consequences of
non/short deduction of TDS from payments to residents
if there is No loss to ‘e e ue due to Non/Short
deduction.
• No relief from Interest u/s 201(1A). Interest u/s 201(1A)
to be paid from date on which TDS deductible till date of
furnishing of Return.

No loss to Revenue ??
• Payee has included such payment in return of income
filed by him u/s 139.
• Payee has paid tax due on income declared in such
return.
• Payer furnishes a certificate from CA confirming above.

One Time Exemption to
Government Deductors
• CBDT has provided One Time Exemption to Government
Deductors via Circular No. 07/2014, Dated: March 04,
2014 by Extending the Due Date of filling return to
31/03/2014 for the following Quarter
* FY 2012-13 – 2nd to 4th Quarter
* FY 2013-14 – 1st to 3rd Quarter
However, any fee under section 234E of the Act already
paid shall not be refunded.

Form 24G
• Every Account Officer (AO) shall furnish consolidated
Form 24G every month having details of all type of
deduction / collection viz. within 10 days from the end
of month in respect tax deducted by deductor and
reported to him for month.
– TDS-Salary
– TDS-Non Salary
– TDS-Non Salary Non Residents
– TCS.
30

Book Identification Number
(BIN)
• The Accounts Office (AO) can register their AINs online.
After successful registration, AO can login with user ID and
password.
• On login, AO can View/Download Book Identification
Number (BIN) Details.
• BIN is necessary for filing TDS Statement by DDO.
31

What is BIN?
BIN consists of the following:
• Receipt Number: Seven digit unique number generated for
each Form 24G statement successfully accepted at the TIN
central system.
• DDO Serial Number: Five digit unique number generated for
each DDO record with valid TAN present in the Form 24G
statement successfully accepted at the TIN central system.
• Date: The last date of the month and year for which TDS/TCS
is reported in Form 24G. Date will be in DD/MM/YYYY format.
• AO has to communicate the BIN details to the respective
DDO.
32

Tax Collected at Source
33
• TCS is collected by the seller of specified goods from the
buyer.
• TCS to be collected at the time of receipt of payment
from the buyer or debiting the account of the buyer,
whichever is earlier.
• TCS to be deposited within 1 week from the end of the
week in which the tax is collected.
• The time limit is same even for TCS made on 31st March.

34
Specified Goods and
Rate of TCS
• Alcoholic liquor for human consumption – 1%
• Tendu Leaves – 5%
• Timber or any other forest produce – 2.5%
• Manufacturing Scrap which is not usable as such – 1%
• Parking Lot, Toll Plaza – 2%
• Minerals, being coal or lignite or iron ore – 1%

35
Meaning of Buyer under TCS
• Buyer does not include
– Central Government
– State Government
– Public sector company
– Embassy, High Commission etc.
• TCS is not applicable if the buyer purchases goods for his
personal consumption.

Capital Gain Chargeability
Any profits or Gains arising from the transfer of a Capital
Asset during the previous year is Chargeable to Tax under
this head of income.
Conditions
• There Should be a Capital Asset
• Capital Assets should be transferred during the previous
year.
• Profit/Gains should have arisen.
• Such Profit/Gains should be liable for tax
36

CAPITAL GAINS EXEMPT FROM TAX
• Section 54
• Section 54 B
• Transfer of a Long Term
Residential House Property and
Purchasing /Constructing a New
Residential House Property.
• Transfer of Agricultural Land and
acquires a new land for
agricultural purpose.
37

• Section 54 EC
• Section 54 F
• Transfer of Long Term Capital Asset
and investing in specified Long Term
Bonds.
(National Highway Authority of India
Bonds or Rural Electrification
Corporation Ltd. Bonds.)
• Transfer of a Long Term Capital Asset
other than a House Property and
investing in Residential House
Property.
38

39
Malani Somani Chandak & Associates
2, Dream Presidency,
1202/17E, Apte Road,
Shivajinagar,
Pune- 411 004.
E-mail- mscassociates@gmail.com
Phone-020/25538240 /1
Fax- 020/25538242

Tax deducted at source..................

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