Tds Provisions India

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Tds Provisions India

  1. 1. TDS PROVISIONS <ul><li>KALYAN NATH </li></ul><ul><li>ASST. COMMISSIONER OF INCOME TAX,TDS,KOL. </li></ul>
  2. 2. OBJECTIVES OF TDS <ul><li>Regular inflow of revenue for Government </li></ul><ul><li>Checking of tax evasion </li></ul><ul><li>Widening of tax base </li></ul>
  3. 3. IMPORTANT ISSUES - 1 <ul><li>Nature of payment </li></ul><ul><li>Person responsible for paying </li></ul><ul><li>Specified payee </li></ul><ul><li>Deduction of tax </li></ul><ul><li>Deposit of tax </li></ul>
  4. 4. IMPORTANT ISSUES - 2 <ul><li>TAN </li></ul><ul><li>Issue of certificate </li></ul><ul><li>Filing of return </li></ul><ul><li>Filing of statements </li></ul><ul><li>Declaration u/s 197A </li></ul><ul><li>Lower deduction certificate u/s 197 </li></ul>
  5. 5. NATURE OF PAYMENTS 194K,194LA Units/C.Acq 194J Prof/Tec . 194I Rent 194H Com/Brok 194G Com.Lot. 194F MF/UTI 194EE NSS 194E NR Sports 194D Ins. Com. 194C Contract 194BB Horse rac. 194B Lot/CW S.194A Other Int. S.194 Dividend S.193 Int.-Sec. S.192 Salary
  6. 6. PERSONS RESPONSIBLE FOR PAYING-1 <ul><li>ALL persons </li></ul><ul><li>(Except individuals & HUF in certain cases )‏ </li></ul>
  7. 7. PERSON RESPONSIBLE FOR PAYING-2 <ul><li>I AM A SMALL TIME BUSINESSMAN/PROFESSIONAL? </li></ul><ul><li>W.E.F. 01.06.2002, Individuals and HUFs have to deduct tax at source if turnover exceeds Rs.40 lacs (business), Rs.10 lacs (profession) for payments u/s.194A, 194C, 194H, 194I & 194J. </li></ul>
  8. 8. SPECIFIED PAYEE <ul><li>All persons except – </li></ul><ul><li>a) Quantum of payment is less than the prescribed limit </li></ul><ul><li>b) General exemption u/s.10 or specific exemption in respective TDS provision </li></ul><ul><li>c) Certificate issued by A.O. u/s.197 </li></ul><ul><li>d) Declaration in form 15G and 15H </li></ul>
  9. 9. DEDUCTION OF TAX <ul><li>Tax is to be deducted at the time of credit or at the time of payment whichever is earlier, at the prescribed rate </li></ul><ul><li>In the case of salary, TDS is on estimated income. </li></ul><ul><li>In the case of payments other than salary, the TDS is on payments. </li></ul><ul><li>Surcharge and Education Cess will be as applicable . </li></ul>
  10. 10. DEPOSIT OF TAX-1 <ul><li>In the case of salary – </li></ul><ul><li>Within one week from the end of the month. </li></ul>
  11. 11. DEPOSIT OF TAX-2 <ul><li>In case of payments other than salary- </li></ul><ul><li>W ithin ONE WEEK from the end of the month. </li></ul><ul><li>Payments credited or paid on 31 st March(last date of Accounting Year), within two months . </li></ul>
  12. 12. DEPOSIT OF TAX-3 <ul><li>Quarterly Payments in Special Cases </li></ul><ul><li>15 th June, 15 th Sept., 15 th Dec., 15 th Mar. </li></ul><ul><li>Prior approval of JCIT. </li></ul>
  13. 13. TAN <ul><li>The person responsible for deducting tax at source has to apply for TAN in Form No. 49B within one month from the end of the month in which tax is deducted for the first time. </li></ul><ul><li>The TAN should be quoted in all challans, TDS Certificates, Quarterly Returns, statements and correspondence. </li></ul><ul><li>Reformatted TAN. </li></ul>
  14. 14. ISSUE OF TDS CERTIFICATES- 1 (S 203 / R 31)‏ <ul><li>The person responsible for deducting tax at source has to issue TDS certificates before the prescribed date- </li></ul><ul><li>a) Normally, within one month from the end of the month in which the tax was deducted at source. </li></ul><ul><li>b) If the non-salary payment is credited or paid on 31 st March then the TDS will be deposited by 31 st May – in such cases certificate should be issued by 7 th of June. </li></ul><ul><li>c) In case of consolidated certificate, within one month from the end of the Financial Year. </li></ul>
  15. 15. ISSUE OF TDS CERTIFICATES- 2 (S 203 / R 31)‏ Salary-cum-Return of income (Gross salary <=1,50,000)‏ 16AA Non-Salary 16A Salary Perquisites (Gross salary =>1,50,000)‏ 16 12BA PARTICULARS FORM NO.
  16. 16. ISSUE OF TDS CERTIFICATES - 2 <ul><li>Deductors will not issue TDS certificate in respect of tds made on or after 01.04.2008 </li></ul><ul><li>A statement of TDS will be issued either by Income Tax Department or an Agency prescribed.(203AA & 206C(5)/ Rule 31AB) </li></ul>
  17. 17. FILING OF RETURN <ul><li>All TDS returns have to be filed before due dates prescribed. </li></ul><ul><li>+ In case of companies and Government deductors, e-TDS returns are compulsory. </li></ul>
  18. 18. FILING OF QUARTERLY STATEMENTS - 1 <ul><li>W.E.F. 01.04.2005 , the person responsible for paying tax at source, shall after depositing the TDS, prepare and file Quarterly Statement with the TINFCs appointed by NSDL </li></ul>
  19. 19. FILING OF QUARTERLY STATEMENTS - 2 Non-salary 26Q Salary 24Q Particulars Form No.
  20. 20. FILING OF QUARTERLY STATEMENTS - 3 <ul><li>When to file the Quarterly Statements </li></ul>15 th June 31 st March 15 th January 31st December 15 th Oct. 30 th Sept. 15 th July 30 th June Due Date Q.E.
  21. 21. FILING OF QUARTERLY RETURN BY BANKS (206A/RULE 31 AC/FORM 26QA)‏ <ul><li>Banks are required to file Quarterly Returns in respect of the payment of interest to the deposit holders without TDS </li></ul>
  22. 22. DECLARATION U/S.197A <ul><li>Form No. 15H </li></ul><ul><li>By any person who attains the age of 65 during the F. Y. in respect of the following receipts </li></ul><ul><li>+Interest on securities </li></ul><ul><li>+Dividend </li></ul><ul><li>+Interest other than interest on securities </li></ul><ul><li>+Payment in respect of deposit under NSS </li></ul><ul><li>+Income in respect of units </li></ul><ul><li>Provided tax payable by such person is NIL. </li></ul>
  23. 23. LOWER DEDUCTION CERTIFICATE U/S 197 <ul><li>.Can be filed by any person. </li></ul><ul><li>Application to be made in Form No.13 to the </li></ul><ul><li>TDSAO. </li></ul><ul><li>Certificate will be issued by the TDSAO </li></ul>
  24. 24. CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE-1 <ul><li>The person responsible for deducting tax at source will be held as assessee in default and the tax he ought to have deducted at source or he ought to have deposited will be collected from such person . </li></ul>
  25. 25. CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE-2 <ul><li>If the person responsible for deducting or depositing the tax at source, does not pay or deposit the TDS then Interest u/s.201(1A) @ 12% p.a. from the date on which the tax was deductible to the date on which such tax is actually paid will be levied on the amount of such tax. </li></ul>
  26. 26. CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE-3 <ul><li>The tax along with interest shall be a charge upon all the assets of the person / company, responsible for deducting tax at source. </li></ul>
  27. 27. CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE- 4 (S. 40(ia))‏ <ul><li>W.E.F. 01.04.2004 ( AY 2005-06), if the deductor does not deduct or deposit the tax at source, he shall not be allowed deduction while computing his own total income- interest, commission & brokerage, fee for professional & technical services and contract </li></ul>
  28. 28. PENAL PROVISIONS
  29. 29. PENALTY U/S 271C <ul><li>Penalty u/s.271C is leviable if the assessee fails to deduct the tax at source within the prescribed time. The penalty leviable is equal to the amount of tax the deductor failed to deduct. </li></ul>
  30. 30. FAILURE TO FURNISH THE TDS RETURN – 272A(2)© <ul><li>If the deductor fails to furnish the TDS return within due date, he shall be liable for penalty of Rs.100/- per day for the period of default. </li></ul>
  31. 31. FAILURE TO FURNISH A COPY OF CERTIFICATE - 272A(2)(g)‏ <ul><li>If the deductor fails to furnish a certificate to the payee within the prescribed time, he shall be liable for penalty of Rs.100/- per day for the period of default. </li></ul>
  32. 32. FAILURE TO APPLY FOR TAN-272BB <ul><li>If the deductor fails to apply for TAN within the prescribed time, he shall be liable for penalty of Rs.10000/-. </li></ul>
  33. 33. PROSECUTION
  34. 34. PROSECUTION U/S.276B <ul><li>If the deductor fails to deposit the tax deducted by him at source, he shall be punishable with rigorous imprisonment for a term from three months to seven years along with fine. </li></ul>
  35. 35. ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-1 <ul><li>All India Data base of tax paid by the tax payers. </li></ul><ul><li>It has a facility to check any payment made by the tax payer in the Government Account. </li></ul><ul><li>Important resource in giving credit to the tax payers while processing IT/TDS return. </li></ul>
  36. 36. ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-2 <ul><li>Important features- </li></ul><ul><li>Only 2 challans </li></ul><ul><li>Only 1 copy with detachable counterfoil </li></ul><ul><li>For Advance tax and SA tax – Challan No.280 </li></ul><ul><li>For TDS Challan No.281 </li></ul>
  37. 37. ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-3 <ul><li>5. The counterfoil has name of the branch – 7 digit BSR Code – date of deposit – Sl. No. of challan (5 digits)‏ </li></ul><ul><li>6. No need to attach copy of challan with the tax return </li></ul><ul><li>7. Mention CIN – combination of 7 digit BSR Code – date of deposit – Sl. No. of challan (5 digits)‏ </li></ul><ul><li>8. PAN/TAN must be mentioned correctly </li></ul>
  38. 38. THANK YOU

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