K P R K And Associates

Chartered Accountants
T.D.S/T.C.S AT GLANCE FOR A.Y. 2011-2012
(08.05.2010)
Tax Deducted at Source (TDS) was introduced to facilitate the payment of Tax while receiving the income and
it follows the concept Pay as you Earn. The tax deducted at source is one way of collecting the taxes by the
department.

Liability of Tax Deduction:-

Persons liable to deduct TDS

a. Individual/HUF- If covered under Tax Audit u\s 44AB during the F.Y.2009-10
b. Partnership Firms
c. Limited Company
d. Local Authority
e. Association of Person
f. Body of Individual

The liability to deduct tax on salary income payable to the employee is also to Individual and HUF.
Rate of deduction is now based on the status of payee and not on the basis of type of payment.

Tax Deduction Account Number U/S 203 A:-

It is obligatory for all persons responsible for deducting tax at source to quote the T.D.S No. i.e. TAN in the
challans, TDS certificates with deductee’s PAN and address & Quarterly returns etc.

Rate of Deduction and Due Date of Filing Return

(As per Finance Bill passes for F.Y. 2010-11)

Nature of payment ( Important U/S When to deduct tax at Rate of Tax to be deducted at
and useful deductions only) Source source (Deductee must have pan)
IT Edu. SHEC Total
Cess
1. Salary 192

Exceeds Rs.1, 60,000/- p.a.

A. For Individual, every 0 to 1,60,000 Nil --- Nil
HUF/ AOP/ BOI/ 1,60,001 to 5,00,000 10% 2% 1% 10.30%
artificial juridical 5,00,001 to 8,00,000 20% 2% 1% 20.60%
person Above 8,00,001 30% 2% 1% 30.90%

B. For Resident Woman Exceeds Rs.1, 90,000/- p.a.

(who is below 65 years as 0 to 1,90,000 Nil --- Nil
on 31.03.2011) 1,90,001 to 5,00,000 10% 2% 1% 10.30%
5,00,001 to 8,00,000 20% 2% 1% 20.60%
Above 8,00,001 30% 2% 1% 30.90%

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 K P R K And Associates
Chartered Accountants

C. For Resident Senior Exceeds Rs.2, 40,000/- p.a.

Citizen 0 to 2,40,000 Nil --- Nil
(who is above 65 years as on 2,40,001 to 5,00,000 10% 3% 10.30%
31.03.2011) 5,00,001 to 8,00,000 20% 3% 20.60%
Above 8,00,001 30% 3% 30.90%

Nature of payment ( U/S When to deduct tax at Rate of Tax to

Important and useful Source be deducted at
deductions only) source(Deductee
must have pan)
2. Interest other than 194A Exceeds Rs. 10,000/- p.a
Interest on Securities

A. Payable by Banks, Post For Individual 10%

Office, Co-Op Banks For Firms/ AOP 10%
Individual / HUF Domestic Companies 20%
Exceeds Rs. 5,000/- p.a
B. Interest Payment by other 194A
than above For Individual 10%
For Firms/ AOP 10%
Domestic Companies 20%
3. Payment to contractors & 194C Contract value more than Rs. 20,000/-
Sub Contractors (Rs.30000/- from July 1, 2010) per contract
or Rs. 50,000/- (Rs. 75,000/- from July 1,
2010) during the year.

( payment to resident For individual /HUF 1%

contractor) For firms/ AOP 2%
Contractors / Domestic Companies 2%
Sub Contractors &
Advertisements
Transporter - deductee For individual /HUF --
has PAN For firms/ AOP --
(See Note 3 & 4) Domestic Companies --
4. RENT 194I Exceeds Rs.1, 20,000/- p.a. upto June 30,
2010 (Rs.1,80,000/- p.a. from July 1,2010)

For Individuals/ HUF 10%

i) Rent on Land, Premises, For Firms/ AOP 10%
Furniture etc. Domestic Companies 10%

For Individuals/ HUF 2%

ii) Rent on Plant , Machinery For Firms/ AOP 2%
& Equipment, vehicles Domestic Companies 2%

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 K P R K And Associates
Chartered Accountants

5. Fees for professional or 194J Exceeds Rs 20,000/- p.a. upto June 30,2010
technical services (resident) (Rs.30,000/- p.a. from July 1,2010)

For Individual/ HUF 10%

For Firms/ AOP 10%
Domestic Companies 10%
6. Brokerage & Commission 194H Exceeds Rs 2,500/- p.a. upto June 30,2010
(Rs.10,000/- p.a. from July 1,2010)
10%
For Individual 10%
For Firms/ AOP 10%
Domestic Companies

Any payment made to NRI or Foreign Company section 195 is applicable for rate schedule separately.
Section Nature of Payment Status Tax (%)
194E Payment to nonresident sportsmen or sports association 10
195(a) Income from foreign exchange assets payable to an 20
Indian citizen
195(b) Income by way of long-term capital gain referred to in 10
sec. 115E
195(c) Income by way of Short-term capital gains u/s. 111A 15
195(d) Income from other long-term capital gains 20
195(e) Income by way of interest payable by 20
Government/Indian concern on money borrowed or
debt incurred by Government or Indian concern in
foreign currency
195(f) Royalty payable by Government or an Indian concern
in pursuance of an agreement made by non-resident
with the Government or the Indian concern after March
31, 1976, where such royalty is in consideration for the
transfer of all or any rights (including the granting of a
licence) in respect of copyright in any book on a subject
referred to in the first proviso to section 115A(1A) to
the Indian concern or in respect of computer software
referred to in the second proviso to section 115(1A), to
a person resident in India -
1.Where the agreement is made before June 1, 1997 30
2.Where the agreement is made after May 31, 1997 but 20
before June 1, 2005
3.Where the agreement is made on or after June 1, 10
2005
195(g) Royalty (not being royalty of the nature referred to in
(e) sub para) payable by Government or an Indian
concern in pursuance of an agreement made by non-
resident with the Government or the Indian concern and
where such agreement is with an Indian concern, the
agreement is approved by the Central Government or
where it relates to matter included in the industrial
policy, the agreement is in accordance with that policy

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 K P R K And Associates
Chartered Accountants
1.Where the agreement is made after March 31, 1961 COMPANY 50
but before April 1, 1976 OTHERS 30
2.Where the agreement is made after March 31, 1976 30
but before June 1, 1997
3.Where the agreement is made after May 31, 1997 but 20
before June 1, 1997
4.Where the agreement is made on or after June 1, 10
2005
195(h) Fee for technical services payable by Government or an
Indian concern in pursuance of an agreement made by
non-resident with the Government or the Indian
concern and where such agreement is with an Indian
concern, the agreement is approved by the Central
Government or where it relates to matter included in
the industrial policy, the agreement is in accordance
with the policy -
1.Where the agreement is made after February 29, 1964 COMPANY 50
but before April 1, 1976 OTHERS 30
2.Where the agreement is made after March 31, 1976 30
but before June 1, 1997
3.Where the agreement is made after May 31, 1997 but 20
before June 1, 2005
4.Where the agreement is made on or after June 1, 10
2005
195(i) Any other income COMPANY 40
OTHERS 30
196A Income in respect of Units of Non-residents 20
196B Income and Long-term Capital gain from units of an 10
Off shore fund
196C Income and Long-term Capital Gain from Foreign 10
Currency Bonds or shares of indian companies
196D Income of Foreign Institutional Investors for Securities 20

Notes:

**** Most Important *****

1. With effect from 01.04.2010 Deductees are required to furnish the PAN Sec206AA: If deductee
fails to furnish PAN to deductor, the deductor shall apply highest of the following rates for
deducting TDS:-

At the rate specified in the relevant provision of this act, or

At the rate or rates in force,

Or at the rate of 20%

2. No Education cess and Higher Secondary Education Cess are applicable for TDS purpose except in
case of payment of salary to resident & non- residents and any other payment to non resident or
Foreign Company. Only the specified TDS rates should be considered for deduction. (AS PER NEW
AMENDMENT W.E.F 01.10.2009)

3. Persons carrying business of plying, hiring or leasing goods carriages.

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 K P R K And Associates
Chartered Accountants

Need not deduct TDS if contractor furnishes PAN.

Will have to furnish information as may be prescribed.

4. The NIL Rates will be applicable if TRANSPORTER quotes/ gives his PAN

5. Tax is not deductible under section 193,194,194A, or 194 EE if the recipient makes a declaration in
Form 15G/15H under the provisions of 197A.
• Form 15G is for senior citizen
• Form 15H is for any other person

Surcharge on Income Tax:-

** Surcharge: For payment to residents and domestic companies, there will be no surcharge and cess on
the basic rate of TDS (AS PER NEW AMEMDMENT)
The amount of income tax deducted shall be increased by a surcharge as under:-
a) In case of Domestic Company if net Income Exceeds Rs.1 Crore than payer has to apply surcharge
of 10% on TDS amount. (Only in case of the TDS of Salaried Persons)
b) In case of Foreign Company (Payee), if net Income exceeds than payer has to apply surcharge of
2.5% on TDS amount not 10% as in case of Domestic company.

EDUCATION CESS:-
For Others:-
For F.Y. 20010-11 there is no surcharge, education cess (As Per new Amendment w.e.f 01.10.2009)
For Salaried Persons:-
Edu. Cess shall be calculated @ 3% p.a. on the amount of income tax deducted .
Education Cess @ 2 % plus Secondary and Higher Secondary Edu. Cess 1%

Time of Deposit of TAX

Sr. No. Nature of Payment U/s Time Of Deposit of Tax

1. Salary
2. Interest other than
Interest on Securities
Payable by persons other than
Individual / HUF
3 Payment to contractors &
Sub Contractors
4 Rent
5 Fees for professional or
technical services
6 Brokerage & Commission
192 Within one week from the last date of the month in which
the deduction is made.
194A In any other case: - within one week from the last date of
the month in which deduction is made.
Quarterly payment is permitted by the Assessing Officer
(with the approval of the deputy commissioner)in special
cases on July 15, Oct 15, Jan 15, & April 15
194C In any other case: - within one week from the last date of
the month in which deduction is made.
194I In any other case: - within one week from the last date of
the month in which deduction is made.
194J In any other case: - within one week from the last date of
the month in which deduction is made.
194H In any other case: - within one week from the last date of
the month in which deduction is made.

Quarterly payment is permitted by the Assessing Officer

(with the approval of the deputy commissioner)in special
cases on July 15, Oct 15, Jan 15, & April 15

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 K P R K And Associates
Chartered Accountants

Notes:-

a) Where amount is credited to the payee’s Account on the last day of accounting year, the tax amount
there on is to be deposited within two months from the end of the month in which credit is made.
b) TDS certificate need not to be furnished in respect of tax deducted and paid.
c) Every person deducting of collecting tax shall be required to furnish Quarterly Statements to the
prescribed Income Tax Authority who will in term furnish as annual statement of the tax deducted or
collected to the assesses.
d) Where tax is deducted on behalf of the government, tax should be deposited on the same day, without
any challan form.
e) With effect from July 01 ,2010 (NEW AMENDMENT ), if a person fails to deduct tax at source or
after deduction fails to deposit TDS, He is liable to pay interest u\s 201(1A) as follows:-

Rate of Interest Period for which Interest is Payable

(Per Month or
Part)
1% From the date on which tax was deductible to the date on which tax is actually
deducted.
1.5% From the date on which tax was actually deducted to the date on which tax is
actually paid

Return of TDS:-
Every person, deducting tax at source, is required to submit return of tax deducted as follows:-

Different payments In case the person In case the person deducting

deducting tax is a tax is other than company or
company or government government
Salary Form No.24 in electronic Form No. 24Q
format & Form No 27A
Payment (other than Form No.26 in electronic Form No. 26Q
Salary) to a resident format & Form No. 27A
Payment (other than Form No.27 in electronic Form No. 27Q
Salary) to a non resident format & Form No. 27A

If the return is submitted in computer media it should be accompanied by Form No. 27A

Date of Filing the Returns:-

Different payments Form No. Particulars Due Date

Salary 24Q Quarter ending 30th June, 2010 15th July, 2010
Quarter ending 30th September, 2010 15th October, 2010
Quarter ending 31st December, 2010 15th January, 2011
Quarter ending 31st March, 2011 15th June, 2011
Payment other than 26Q Quarter ending 30th June, 2010 15th July, 2010
salary to a resident Quarter ending 30th September, 2010 15th October, 2010
Quarter ending 31st December, 2010 15th January, 2011
Quarter ending 31st March, 2011 15th June, 2011
Payment other than 27Q Quarter ending 30th June, 2010 15th July, 2010
salary to a non Quarter ending 30th September, 2010 15th October, 2010
resident Quarter ending 31st December, 2010 15th January, 2011
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 K P R K And Associates
Chartered Accountants
Quarter ending 31st March, 2011 15th June, 2011

Consequence of Failure to Deduct or pay (Penal Provisions):-

1) Failure to deduct the whole or any part of tax at source u/s 271 C is liable to penalty of sum equal to
the amount of tax which he failed to deduct.
2) Failure to pay the TDS u/s 276 B is punishable with rigorous imprisonment for a term which shall
not be less than 3 months but which may extent to 7 years and with fine.
3) If a person is held to delivery in due time a copy of Quarterly statement of tax payment he shall
pay, by way of penalty, a sum of Rs 100 per day for the delay during which default continues.
4) In case of failure in respect of furnishing Annual Return in due time, assesses should be liable to
pay penalty u/s 272 (A)(2)(C) @ Rs. 100 per day for the delay during which the default continues
or amount of TDS whichever is less.
5) Failure to deduct/ pay tax at source u/s 220, person is liable to pay interest @ 13% p.a. or the
amount of such tax from the date on which such tax was deductible to the date on which tax is
actually paid. However such interest is required to be paid on or before due date for filing the
quarterly returns (w.e.f. 1st June, 2006).
6) In case of failure to apply for allotment of TAN and failure to quote TAN in challans, certificates
and statements, person is liable to pay penalty u/s 272 BB to the extend of Rs. 10,000/- of failure to
deduct or pay.

Other Informations:

1. Payment of TDS is required to be made electronically only.

2. Form 15G/ 15H declaration for no deduction of tax will become invalid if PAN is not mentioned
therein.
3. PAN will have to be mentioned in bills, vouchers and other documents communicated between
deductor and deductee.
4. If deductee furnishes invalid PAN or submits PAN belonging to someone else, it will amount to non
furnishing of PAN
5. No TDS on zero coupon bonds issued by scheduled banks: Section 194A. (w.e.f. 01-04-2009)
6. No TDS for payments from New Pension Scheme: Section 197A. (w.e.f. 01-04-2009)

 If an assessee fails to deduct TDS on the above following payment then the amount of expenditure will be
disallowed u\s 40(a )(ia) of Income Tax ACT,1961.

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 K P R K And Associates
Chartered Accountants

TAX COLLECTION AT SOURCE U/S 206C

(A.Y. 2011-12)

Under section 206 C in some cases tax has to be collected at source.

Person responsible to collect tax at source:-

Every person being a seller shall collect tax from the buyer of goods specified in sec 206C (1)

Meaning of Seller: Seller means

1. The Central Government
2. A State Government or
3. any local authority or corporation or authority established by or under Central Govt. or Provincial Act,
4. Any Company, or
5. Firm, or
6. Co-operative Society
7. Individuals/ HUF (if books are audited u/s 44AB

Meaning of Buyer: - “Buyer” means a person who obtains in any sales by way of auction, tender or any
other mode, goods of the nature specified in the table or the right to receive any such goods. It however
does not include the following:
• A Public Sector Company, the Central Government, a State Government, And an Embassy, a
High Commission, Legation, Commission, Consulate and the trade representation, of Foreign
State & a Club; or
• A buyer in retail sale of such goods purchased by him for personal consumption.

Note: If income of buyer is exempt u/s 10(26), then tax collected be collected at source.

Tax Collection Account Number U/S 20C A:-

It is obligatory for all persons responsible for collecting tax at source to quote the T.C.S No. i.e. TAN in the
challans, TCS certificates & periodical returns etc.

How to compute Tax Collected at Source:-

SI. Nature of Goods % rate of tax collection at source

No. (TCS) applicable on purchase
price
1. Tendu Leaves 5%
2. Timber obtain under a forest lease 2.50%
3. Timber obtain by any mode under a forest lease 2.50%
4. Any other forest produce other than timber & tendu leaves 2.50%
5. Scrap 1%
6. Parking Lot, Toll plaza, (Note 1 & 2) 2%
7. Alchoholic Liquor for human consumption 1%

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 K P R K And Associates
Chartered Accountants
Notes:-

1. The above scheme of tax collection has been extended to cover parking auctions, toll auctions or mining
leases with effect from Oct 1, 2004
2. Tax Collection at Source in respect of mining and quarrying of mineral oil- No TCS w.e.f. June 1,
2007
3. Surcharge- For the F.Y. 2009-10, surcharge at the rate of 2.5% is applicable only if payer is a Foreign
the above rates are subject to surcharge @10%
4. There is no education cess for the F.Y.2010-11 if the payer is resident, However if, payer is a non-
resident or a Foreign Co. then Education Cess is applicable.

Scrap: - ‘Scrap’ has been defined as waste and scrap from manufacturing or mechanical working of materials
which is definitely not usable as such. Accordingly it will not include any waste or scrap-
a. Which dose not arise from manufacture or mechanical working of materials; or
b. Which is usable as such.

Thus, the following are not covered:-

a. Waste or scrape arising from packing materials, newspapers, old machinery scrapped, etc., which
cannot be said to arise from manufacture; or
b. By products generated from the manufacturing process as the same could be used as such.

It can be inferred that, in case of sale of scrap, the provision would apply to only those sellers who are engaged
in the business of manufacturing or mechanical working of materials.

Deposit of Tax: - Tax collected u/s 206C shall be deposited within 7 days from the last day of the month in
which tax is collected to the credit of Central Government. For non payment or late payment, interest is
payable @ 1% per month or part thereof.

Quarterly Statement of TCS:-

Quarterly TCS return should be submitted (w.e.f. 1st April, 2005) after the end of each quarter in Form 27EQ
within 15 days from the end of each quarter. (76 days in the case of last quarter) Quarterly TCS cannot be
submitted unless interest for late deposit of TCS is paid.

Issue of Certificate:-

Within the period of one month from the end of the month in which tax is collected, the person collecting tax
should issue a certificate of tax collected to the buyer in Form 27D.
Where more than one certificate is required to be furnished to the buyer for TCS in respect of period ending
September 30 and March 31in each financial year, the person collecting tax may (on request of buyer), issue
within end of such period, a consolidated certificate in Form 27D for collected during whole of such period.

Note:- The details given is for just knowledge and working facility for you.

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