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WORKSHOP ON TDS

WORKSHOP ON TDS. For Government Deductors By Shital Shashwat Verma,IRS Deputy Commissioner of Income Tax. Agenda of the presentation-. What is TDS? Deductor’s Duty Rates and details 24G Penal provisions Do’s and Don'ts for the deductors. What is TDS?.

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WORKSHOP ON TDS

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  1. WORKSHOP ON TDS For Government Deductors By ShitalShashwatVerma,IRS Deputy Commissioner of Income Tax

  2. Agenda of the presentation- • What is TDS? • Deductor’s Duty • Rates and details • 24G • Penal provisions • Do’s and Don'ts for the deductors

  3. What is TDS? • Not a tax but amode of tax collection. • It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries. • Prevents evasion of tax against subsequent variations / manipulations of accounts • Maintains better cash-flow for the Govt.

  4. Tax deduction Account Number (TAN) • Unique identification number of a Deductor. Mandatory to quote TAN on challan &returns. • Non-obtaining / False TAN–Penalty Rs.10,000 • A ten character alpha-numeric number. • JBPC04371B

  5. Deductor’s Duty • To Deduct • To Deposit • To File Quarterly TDS Returns(F.24Q,26Q) • To Issue TDS Certificates to the Payee(F.16/A) • To check status online at TRACES.

  6. To Deduct • Obligation is of the Deductor to deduct Tax from any sum liable to TDS • At the prescribed rate - depending on thenature of payment and status of Deductee • On Credit or payment, whichever is earlier • Credit to “suspense a/c” also attracts TDS

  7. Section 192 – TDS on salary • At the time of payment (Estimated annual income) • Rates prescribed in the Finance Act. • To include all perks, allowances, reimbursements, voucher payments; Pension; Annuity; Gratuity; Perquisite; Commission; allowances, Encashment of leave, profits in lieu of salary, Advance salary and arrears of salary. • Amount of deduction of tax may vary from month to month. However, the correct tax liability has to be worked out in the month of February of the FY. • For details- see printed material.

  8. S. 194A-Interest other than interest on securities • TDS on Interest Payments • TDS on GROSS INTEREST • On interest exceeding Rs. 10000/- • @ 10%

  9. S.194C-TDS on contract payments • all types of contracts - transport of goods or passengers(except by railway), advertising, broadcasting, telecasting, labour contracts, material contracts , works contracts, catering, printing/ supplying any product according to your specification with your material, AMC, Security contracts. • Nil rate will be applicable if the transporter quotes his PAN. If PAN is not quoted the rate will be 20%.

  10. S.194C • The amount of any sum credited or paid exceeds Rs.30000 (or Rs. 75,000 during the fin. Year- then tax will be required to be deducted, even where individual transaction is less than the threshold of Rs. 30,000). • TDS @ 1% in case of payments to individual/ HUF. (check the 4th letter of PAN- it should be “P” or “H”) • In case of others, @2%.

  11. S.194I-TDS on rent payments • ‘(i) “rent” means any payment, by whatever name called, under any lease, sublease,tenancy or any other agreement or arrangement for the use of (either separately or together) any, — • (a) land; or • (b) building (including factory building); or • (c) land appurtenant to a building (including factory building); or • (d) machinery; or • (e) plant; or • (f) equipment; or • (g) furniture; or • (h) fittings, • whether or not any or all of the above are owned by the payee;’.

  12. S.194I • Payments exceeding Rs 1,80,000 per annum • Rent of plant, machinery or equipment @ 2% , and • for rent of land, building or furniture @ 10%

  13. TDS u/s 194J-Professional & Technical Services • TDS on fees for professional or technical services. • Professional- eg. Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, advertising, sportspersons, I.T.Ps, Film artistes, Company secretary, Information technology experts, event managers.

  14. S.194J • In case of any managerial, technical, consultancy services royalty, etc. On gross payments including reimbursements, taxes if any. • TDS is deductible if payment is in excess of Rs. 30,000/- per annum. • TDS @ 10%

  15. S.194H-Commission • on payment of commission or brokerage exceeding Rs 5000/- • @ 10% • commission or brokerage” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

  16. TDS at a Glance

  17. Tax Collected at Source (TCS) • The Seller who sells the goodsspecified u/s.206C(1) is liable to collect income-tax at the prescribed rate from the Buyer of such goods at the same time of debiting of the account of the buyer or at the time of receipt of such amount. • The TCS is to be collected apart from the sale value. TCS is to be deposited to Central Government A/C.

  18. Liability of TCS

  19. To Deposit- (section 200/Rule30) • Tax deducted or collected must be remitted to the Central Govt. Account through challan No.281. • before 7th of the following month(Even for March) • Govt DDOs- on Same day (Book Adjustment) CDDO/PAO/DTO - 7 days(Through Challan)

  20. To File TDS Returns &To Issue TDS Certificates to the Payee

  21. TDS Returns and Form 16/16A

  22. Due Date of TCS

  23. Form No. 24G wef 01.04.2010 In respect of Govt. DDOs crediting TDS through Book Adjustment : • Respective PAO / TO / CDDO to obtain AIN • Submit statement in Form 24G within 10 days from the end of the month • Intimate Book Identification No. (BIN) to DDOs

  24. Form 24G • *S.192(1A) r.w.Rule 30(4)An office of the Government, where tax has been paid to the credit of Central Government without the production of a challan is required to-a) file Form 24G within 10 days from the end of the month for that month.B) Intimate Book Identification Number(BIN) generated by System to each DDO.(Income – Tax Department Notification no. 41/2010 dtd 31.5.2010.)*To be filed by PAO / DTO / CDDO

  25. Failure to make TDS • Deductor – Deemed to be assessee in default – Recovery of amount of TDS • Liable to pay simple Interest: @1% p.m. for delay in deduction; and @1.5% p.m. for delay in deposit of tax • Creates charge on all the assets of Deductor for failure to deposit tax to Govt’s a/c

  26. PENALTY • Failure to : (i) issue TDS certificate, or (ii) deliver Form 15G /15H, withinduedate -Penalty @ Rs.100 per day of default • Penalty u/s.271C - 100% of tax in default • Failure to apply / quote PAN or TAN: - Penalty of Rs.10,000/-

  27. Late filing of Statement Penalty-Failure to file TDS statement- u/s 272A(2)(k) @ Rs. 100 per day of default • From Qtr-1 of FY 2012-13 U/s 271H- Rs. 10,000/- to Rs.1,00,000/-. Fee- Fee payable @Rs.200/- per day of default - Fee shall not exceed the amount of Tax The fee is mandatory. No provision for its waiver.

  28. PROSECUTION • Failure to deposit Tax to the credit of Central Government’s account : -Rigorous Imprisonment with Fine; -Period of imprisonment may vary from3 months to 7 years

  29. Dos and Don’ts Instances of Mistakes in Challan- • Mentioning of wrong Assessment Year. • Mentioning of wrong Section code. • Mentioning of wrong deductee code. • Mentioning of wrong payment code. • Mentioning of wrong TAN. • Mentioning of wrong PAN/PAN instead of TAN.

  30. Dos and Don’ts • TRACES is for TDS reconciliation Analysis and Correction Enabling System. • Log in to TDS CPC’s website-TRACES regularly. E-tutorials on the site for guidance. • Download default summary in case of demands w.r.t TDS statements filed by you-correction. • Use separate challans for different sections. • Forms-16/16A/ to the payee to be issued from TRACES compulsorily. Circular No. 03/2011

  31. Dos and Don’ts • TCS- purchase price includes any amount( by whatever name called) paid/payable by the buyer. It also includes excise duty. • Penal interest payments- attracts TDS • Deductions allowed to salaried employees, including LTC-it is obligatory to keep and preserve evidence. • No specific order from I.T. Deptt required for enforcing TDS u/s 192. CIT v. BK Chatterjee (1993) 202 ITR 785(Cal)

  32. Matching of Information • Matching of information in e-TDS return with payment details / PAN database • Matching of Challan details in e-TDS return with that of Bank data base (OLTAS) • Matching with respect to details available in Income Tax e-return of Deductee • Mismatch- correction Statements.

  33. Annual Tax Statement (26AS) • For Online view of ATS : - Registration of PAN for User ID & Password - No Fee payable at TIN-FC • Form 26AS contains : - TDS/TCS deposited on behalf of taxpayer - Advance/Self-assessmentTax paid - Regular Tax paid by the PAN holder

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