DEPARTMENT OF INCOME TAX

TDS PROVISIONS

OBJECTIVES OF TDS
Regular inflow of revenue for Government Checking of tax evasion Widening of tax base

IMPORTANT ISSUES - 1
Nature of payment Person responsible for paying Specified payee Deduction of tax Deposit of tax

IMPORTANT ISSUES - 2
TAN Issue of certificate Filing of return Filing of statements Declaration u/s 197A Lower deduction certificate u/s 197

NATURE OF PAYMENTS
S.192 Salary 194B Lot/CW S.193 Int.-Sec. S.194 S.194A Dividend Other Int.

194BB 194C 194D Horse rac. Contract Ins. Com. 194F MF/UTI 194G Com.Lot.

194E 194EE NR Sports NSS 194H 194I Com/Brok Rent

194K,194LA 194J Prof/Tec. Units/C.Acq

PERSONS RESPONSIBLE FOR PAYING-1

ALL persons
(Except individuals & HUF in certain cases)

PERSON RESPONSIBLE FOR PAYING-2

I AM A SMALL TIME BUSINESSMAN/PROFESSIONAL?
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.

SPECIFIED PAYEE
All persons except a) Quantum of payment is less than the prescribed limit b) General exemption u/s.10 or specific exemption in respective TDS provision c) Certificate issued by A.O. u/s.197 d) Declaration in form 15G and 15H

DEDUCTION OF TAX
Tax is to be deducted at the time of credit or at the time of payment whichever is earlier, at the prescribed rate In the case of salary, TDS is on estimated income. In the case of payments other than salary, the TDS is on payments. Surcharge and Education Cess will be as applicable.

DEPOSIT OF TAX-1
In the case of salary

Within one week from the end of the month.

DEPOSIT OF TAX-2
In case of payments other than salaryWithin

end of the month. Payments credited or paid on 31st March(last date of Accounting Year), within two months.

ONE WEEK

from the

DEPOSIT OF TAX-3

Quarterly Payments in Special Cases th th th 15 June, 15 Sept., 15 Dec., 15th Mar. Prior approval of JCIT.

TAN
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. The TAN should be quoted in all challans, TDS Certificates, Quarterly Returns, statements and correspondence. Reformatted TAN.

ISSUE OF TDS CERTIFICATES- 1 (S 203 / R 31)

The person responsible for deducting tax at source has to issue TDS certificates before the prescribed datea) Normally, within one month from the end of the month in which the tax was deducted at source. b) If the non-salary payment is credited or paid on 31st March then the TDS will be deposited by 31st May in such cases certificate should be issued by 7th of June. c) In case of consolidated certificate, within one month from the end of the Financial Year.

ISSUE OF TDS CERTIFICATES- 2 (S 203 / R 31)

FORM NO. 16 12BA 16A 16AA PARTICULARS Salary Perquisites (Gross salary =>1,50,000) Non-Salary Salary-cum-Return of income (Gross salary <=1,50,000)

ISSUE OF TDS CERTIFICATES 2

Deductors will not issue TDS certificate in respect of tds made on or after 01.04.2008 A statement of TDS will be issued either by Income Tax Department or an Agency prescribed.(203AA & 206C(5)/ Rule 31AB)

FILING OF RETURN
All TDS returns have to be filed before due dates prescribed. + In case of companies and Government deductors, eTDS returns are compulsory.

FILING OF QUARTERLY STATEMENTS - 1

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

FILING OF QUARTERLY STATEMENTS - 2

Form No. 24Q 26Q Particulars Salary Non-salary

FILING OF QUARTERLY STATEMENTS - 3

When to file the Quarterly Statements

Q.E. 30th June 30th Sept. 31st December 31st March

Due Date 15th July 15th Oct. 15th January 15th June

FILING OF QUARTERLY RETURN BY BANKS (206A/RULE 31 AC/FORM 26QA)

Banks are required to file Quarterly Returns in respect of the payment of interest to the deposit holders without TDS

DECLARATION U/S.197A
Form No. 15H By any person who attains the age of 65 during the F. Y. in respect of the following receipts +Interest on securities +Dividend +Interest other than interest on securities +Payment in respect of deposit under NSS +Income in respect of units Provided tax payable by such person is NIL.

LOWER DEDUCTION CERTIFICATE U/S 197 .Can be filed by any person. Application to be made in Form No.13 to the TDSAO. Certificate will be issued by the TDSAO

CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE-1

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.

CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE-2

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.

CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE-3

The tax along with interest shall be a charge upon all the assets of the person / company, responsible for deducting tax at source.

CONSEQUENCES OF FAILURE TO DEDUCT OR DEPOSIT THE TAX AT SOURCE- 4 (S. 40(ia))

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

PENALTY U/S 271C

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.

FAILURE TO FURNISH THE TDS RETURN 272A(2)

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.

FAILURE TO FURNISH A COPY OF CERTIFICATE - 272A(2)(g)

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.

FAILURE TO APPLY FOR TAN272BB

If the deductor fails to apply TAN within the prescribed time, shall be liable for penalty Rs.10000/-. for he of

PROSECUTION U/S.276B
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.

ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-1

All India Data base of tax paid by the tax payers. It has a facility to check any payment made by the tax payer in the Government Account. Important resource in giving credit to the tax payers while processing IT/TDS return.

ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-2

Important features1. Only 2 challans 2. Only 1 copy with detachable counterfoil 3. For Advance tax and SA tax Challan No.280 4. For TDS Challan No.281

ON LINE TAX ACCOUNTING SYSTEM (OLTAS)-3

5. The counterfoil has name of the branch 7 digit BSR Code date of deposit Sl. No. of challan (5 digits) 6. No need to attach copy of challan with the tax return 7. Mention CIN combination of 7 digit BSR Code date of deposit Sl. No. of challan (5 digits) 8. PAN/TAN must be mentioned correctly