Tds edited
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The document discusses the provisions for tax deducted at source (TDS) in India. It provides details on the types of payments that are covered under TDS, including salary, interest, dividends, rent, professional fees, etc. It explains the rate of tax deduction for different payments and the requirements for deductors to obtain a Tax Deduction Account Number (TAN) and file quarterly returns. The purpose of TDS is to collect tax on income at the time it accrues to avoid tax evasion.
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Tds edited
- 1. 1 TAX DEDUCTED AT SOURCE Dinesh Choudhari Sanjay Suthar 18 August 2012
- 2. INDEX Introduction Payments covered under the scheme of TDS. Provisions for filing Returns to the Income Tax Department. Effects of Tax Evasion
- 3. Introduction To avoid cases of tax evasion, the Income-Tax Act has made provisions to collect tax at source on accrual of income. Cases included in the scheme are, generally, those where income can be computed at the time of accrual of income. Under this scheme, persons responsible for making payment of income covered by the scheme are responsible to deduct tax at source and deposit the same to the Government’s treasury within the stipulated time. The recipient of income—though he gets only the net amount (after deduction of tax at source)—is liable to tax on the gross amount and the amount deducted at source is adjusted against his final tax liability. The details of the scheme of tax deduction and collection at source are briefly discussed in this presentation. To conclude one can say that the scheme of TDS is only payment of tax on adhoc basis by the payer of income on behalf of recipient.
- 5. TAN • Every deductor is required to obtain a unique identification number called TAN (Tax Deduction Account Number) which is a ten digit alpha numeric number. This number has to be quoted by the deductor in every correspondence related to TDS
- 6. Tax Deduction & Collection Account Number Every person deducting tax or collecting tax should obtain a tax deduction & collection number Such person should quote such number in every challan for payment u/s 200 or 206C(3), in every certificate furnished u/s 203 or u/s 206C(5) In all the TDS returns delivered In all other documents pertaining to such transaction as may be prescribed in the interest of revenue.
- 7. Payment covered under the scheme of TDS. Salary (Sec.192) Interest on Securities (Sec.193) Dividends (Sec.194) Interest other than Interest on Securities (Sec.194A) Winnings from Lotteries or crossword puzzles (Sec.194B) Winnings from Horse Races (Sec.194BB) Payments to Contractors and Sub-contractors (Sec.194C) Insurance Commission (Sec.194D) Payment to Non-resident sportsmen or sports association (Sec.194E) Payment in respect of NSC (Sec. 194EE) Contd…
- 8. Payment covered under the scheme of TDS. Payments in respect of Repurchase of units of Mutual Funds or UTI (Sec.194F) Commission on Sale of Lottery Tickets (Sec.194G) Commission or Brokerage (Sec.194H) Rent (Sec.194I) Fees for Professional or Technical Services (Sec.194J) Payment of Compensation on acquisition of certain immovable property (Sec.194LA) Other Sums (Sec.195) Long term capital gain (Sec.196B) Income or Long term capital gain from Foreign Currency bonds/Global Depository Receipts (Sec.196C) Income of Foreign Institutional Investors from Securities (Sec.196D)
- 9. Salary (Sec.192) Who is the payer Employer Who is the recipient Employee Payment Covered Taxable Salary of the employee At what time TDS to be deducted At the time of payment Maximum amount which can be paid without tax deduction The amount of exemption limit (i.e.,Rs.160000/190000/240000 for A.Y. 2011-12) Rate at which tax to be deducted. As per Calculation When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction The employee can make application in Form No.13 to the Assessing Officer to get the certificate of lower tax deduction or no tax deduction.
- 10. Interest on Securities (Sec. 193) Who is the payer Payer of interest on securities Who is the recipient A resident person holding securities Payment covered Interest on securities At what time TDS to be deducted. At the time of payment or at the time of credit, whichever is earlier Maximum amount which can be paid without tax deduction Rs. 2500 Rate at which TDS to be deducted 10% When the provisions are not applicable Interest on Central/State Government securities Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make application to the Assessing Officer in Form No. 13 or declaration to the payer in Form 15G or 15H as applicable
- 11. Dividends (Sec. 194) Who is the payer Domestic company Who is the recipient Resident shareholder Payment Covered Deemed dividend under section 2(22)(e) At what time TDS to be deducted At the time of payment Maximum amount which can be paid without tax deduction Rs.2500 Rate at which TDS to be deducted 20% When the provisions are not applicable Dividend covered by section 115-O Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make application to the Assessing Officer in Form No. 13 or declaration to the payer in Form 15G or 15H as applicable
- 12. INTEREST OTHER THAN INTEREST ON SECURITIES (Sec 194A) Who is the payer Any person paying interest other than interest on securities Who is the recipient A Resident person Payment covered Interest other than interest on securities At what time TDS to be deducted. At the time of payment or at the time of credit, whichever is earlier Maximum amount which can be paid without tax deduction If payer is banking company, co-operative engaged in banking business or Rs 10000/- if Payer is any other person Rs 5000/- Rate at which TDS to be deducted 10% if the recipient is resident non-corporate assessee and 20% if the recipient is resident corporate assessee When the provisions are not applicable If the payee are Insurance companies or financial institutions including co-operative societies etc. Is it possible to get the payment without tax deduction or with lower tax deduction Declaration to the payer in Form 15G or 15H as applicable
- 13. Winnings from Lotteries or Crossword Puzzles (Sec. 194B) Who is the payer Any person paying winnings from lotteries/crossword puzzles/card games/other games Who is the recipient Any Person Payment covered Winnings from lotteries/crossword puzzles/card games/other games At what time TDS to be deducted. At the time of Payment Maximum amount which can be paid without tax deduction If the amount payment is Rs. 10000/- or less than Rs. 10000/- Rate at which TDS to be deducted 30% When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction Not Possible
- 14. Winnings From Horse Races (Sec. 194BB) Who is the payer Any person paying winnings from horse races Who is the recipient Any person Payment covered Winnings from Horse Races At what time TDS to be deducted. At the time of payment Maximum amount which can be paid without tax deduction If the amount of payment is Rs. 5000/- or less than Rs. 5000/- Rate at which TDS to be deducted 30% When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction Not Possible
- 15. Payments to Contractors And Sub-contractors (Sec.194C) Who is the payer Specified person Who is the recipient A resident person Rate of TDS 2% Payment Covered Consideration for any Work Contract At what time TDS has to be deducted At the time of payment or at the time of credit Maximum amount which can be paid without tax deduction The tax is required to be deducted if a single payment exceeds Rs. 30000/- or if the aggregate payments exceed Rs. 75000/- per annum Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make application to the Assessing Officer in Form No. 13
- 16. Insurance Commission (Sec.194D) Who is the payer Any person paying insurance commission. Who is the recipient A resident person Payment covered Insurance Commission At what time TDS to be deducted. At the time of payment or at the time of credit whichever is earlier Maximum amount which can be paid without tax deduction If the amount of payment is Rs. 20000/- or less than Rs. 20000/- Rate at which TDS to be deducted 10% if the recipient is resident non-corporate assessee and 20% if the recipient is resident corporate assessee When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make an application in Form No. 13 to the Assessing Officer to get the certificate of lower tax deduction or no tax deduction.
- 17. Payment to Non-resident sportsmen or sports association (Sec.194E) Who is the payer Any person making payment to non-resident sportsman/sports association Who is the recipient Non-resident sportsman/sports association Payment covered Payment to non-resident sportsman/sports association At what time TDS to be deducted. At the time of payment or at the time of credit whichever is earlier Maximum amount which can be paid without tax deduction Nil Rate at which TDS to be deducted 10%+ Education cess etc and Surcharge as applicable When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction No Provision
- 18. Payments in respect of NSC (Sec.194EE) Who is the payer Post Office Who is the recipient Any Person Payment covered Payment (Principal+Interest) out of National Saving Scheme, 1987. At what time TDS to be deducted. At the time of payment Maximum amount which can be paid without tax deduction If the amount of payment is Rs.2500 or less than Rs.2500 Rate at which TDS to be deducted 20% When the provisions are not applicable The payment is made to legal heirs of the deceased depositor
- 19. Payments on account of repurchase of units of Mutual Funds or UTI (Sec. 194F) Who is the payer Mutual Fund or UTI Who is the recipient Unit holder under section 80CCB Payment covered Payment on account of repurchase of units referred to in section 80CCB At what time TDS to be deducted. At the time of payment Maximum amount which can be paid without tax deduction -- Rate at which TDS to be deducted 20% When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction No Provision
- 20. Commission on Sale of Lottery Tickets (Sec.194G) Who is the payer Any person paying commission of sale of lottery tickets Who is the recipient Any person Payment covered Commission on sale of lottery tickets At what time TDS to be deducted. At the time of payment or at the time of credit, whichever is earlier Maximum amount which can be paid without tax deduction If the amount of payment is Rs. 1000 or less than Rs. 1000 Rate at which TDS to be deducted 10% When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make an application in Form No. 13 to the Assessing Officer to get a certificate of lower tax deduction or no tax deduction
- 21. Commission or Brokerage (Sec.194H) Who is the payer Any person paying commission or brokerage Who is the recipient Any resident person Payment covered Commission or brokerage (not being insurance commission) At what time TDS to be deducted. At the time of payment or at the time of credit, whichever is earlier Maximum amount which can be paid without tax deduction If the amount of payment is Rs. 5000 or less than Rs. 5000 Rate at which TDS to be deducted 10% (up to may 31, 2007 : 5%) When the provisions are not applicable -- Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make an application in Form No.13 to the Assessing Officer to get a certificate of lower tax deduction or no tax deduction
- 22. Rent (Sec.194-I) Who is the payer Any person paying rent (not being an individual or HUF whose books of account are not required to be audited under section 44AB in the immediately preceding financial year) Who is the recipient A Resident Person Payment covered Rent At what time TDS to be deducted. At the time of payment or at the time of credit, whichever is earlier Maximum amount which can be paid without tax deduction Rs. 180000/- Rate at which TDS to be deducted For Plant and Machinary Rent 2% and for For Use of and Land or Building including Furniture etc. Individual Huf 10% For any other 20% Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make application in Form No. 13
- 23. Fees for Professional or Technical Services (Sec.194J) Who is the payer Any person paying professional charges (not being an individual or HUF whose books of account are not required to be audited under section 44AB in the immediately preceding financial year) Who is the recipient Any Person Payment covered Professional services, technical services, Royalty, At what time TDS to be deducted. At the time of payment or at the time of credit, whichever is earlier Maximum amount which can be paid without tax deduction If the amount of payment during the financial year is Rs. 30000 or less than Rs. 30000 Rate at which TDS to be deducted 10% Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make application in Form No. 13
- 24. Provisions for Filing Returns Different Payments In case the person deducting tax is a company or a Government department or a person whose books are required to be audited u/s. 44AB in the immediately preceding year or in whose case number of deductees in any of the quarterly statements in the immediately year is 20 or more In case the person deducting tax is any other person Time-limit for submission of return by the person deducting tax Salary Form No. 24Q in Electronic format and Form No. 27A Form No. 24Q Within 15 days from the end of each quarter (31st May in case of last quarter) Payment (other than salary) to a resident Form No. 26Q in Electronic format and Form No. 27A Form No. 26Q Within 15 days from the end of each quarter (31st May in case of last quarter) Payment (other than salary) to a non-resident Form No. 27Q in Electronic format and Form No. 27A (quarterly) Form No. 27Q (quarterly) Within 15 days from the end of each quarter (31st May in case of last quarter)
- 25. Issue TDS Certificates Sec. 203 Sr. No. Form no Periodicity Cut off Date 1 16 For Salary Annual 31st May of following financial year 2 16A Other than salary Quarterly Within 15 days from due date of furnishing the TDS statement under rule 31A
- 26. Dates for Payment of TDS Deductor For MARCH For April to February Government On or before 7th of next month for salary On the same day for other than salary & on or before 7th of next month for salary Other than Government On or before 30th April On or before 7th of next month Special Cases 30th April Quarterly payment on or before 7th of the month succeeding quarter
- 27. Furnishing of quarterly returns for payment of interest to residents without Deducting Tax (Sec. 206A) • Banking company, Cooperative societies, & Public Companies shall furnish quarterly return to department in respect of payments of Interest (other than Interest on Securities) in any computer readable media.
- 28. Collection of Tax Who is the payer Seller Who is the recipient Buyer Payment covered As per Details in next slide At what time TDS to be Collected. At the time of receipt or at the time of debiting the account, whichever is earlier Maximum amount which can be paid without tax collection Nil Rate at which TDS to be deducted As per Details in next slide Is it possible to get the payment without tax deduction or with lower tax deduction The recipient can make an application in Form No. 13 to the Assessing Officer to get a certificate of lower tax deduction or no tax deduction
- 29. Rates for Collection of TAX
- 30. 30 Thank You!
- 31. Effects of Evasion of TDS (Sec 201) Sr. No. Reasons Effects 1. Non deduction of TDS The expenditure for which TDS to be deducted gets DISALLOWED & penal interest @1% for every month or part of month from the date on which such tax was deductible to the date of deduction 2. Non payment of TDS The expenditure for which TDS deducted but not paid gets disallowed 3. Less deduction of TDS. The amount less deducted is required to be paid by the deduct or along with penalty 4. Late Payment of TDS The deductor should have to pay penal interest @1.5% for every month or part of month from date of deduction to the date of payment.
- 32. Penal Provisions