Saturday, July 5, 2008

TDS PROVISIONS IN BRIEF

TDS PROVISIONS
AT A
GLANCE
UPDATED FINANCE ACT 2008
OBJECTIVES OF TDS
· Regular revenue for Government
· Checking of tax evasion
· Widening of tax base
· Easy collection
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


TDS SECTION & OUR RESOURCES
SEC 192 :SALARY (DOWNLOAD FREE CALCULATOR FOR TDS BY Y NITYA FOR AY 2009-10)SEC 194-I:TDS ON RENT ,WHETHER SERVICE TAX TO BE INCLUDED TO DEDUCT TAX ON RENT.(DETAILS)SEC 194-C:TDS ON COLD STORAGE COVERED UNDER 194C OR 194-I??DOWNLOAD TDS RATE & CALCULATOR FREE FOR AY 2007-08 AND AY2008-09 (SAME FOR BOTH YEAR FROM HERE)
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
· Is Tds required to be deposited online or whether epayment of tds is mandatory from 01.04.08(read from here)
· TDS is to be deposited of itns 281 challan (to download challan 281 ytds challan& to know how to fill it (click the link)
· the case of salary –
o Within one week from the end of the month in which tax has been deducted.
DEPOSIT OF TAX-2
· In case of payments other than salary-
o Within ONE WEEK from the end of the month.
o Payments credited or paid on 31st March(last date of Accounting Year), within two months.

DEPOSIT OF TAX-3
· Quarterly Payments in Special Cases
· 15th June, 15th Sept., 15th Dec., 15th Mar.
· Prior approval of JCIT.
TAN
KNOW FAQ ON TAN(CLICK)
· 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 date-
· a) 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
ISSUE OF TDS CERTIFICATES- 2(Download form16/16A excel)
16AA
Non-Salary
16A
Salary
Perquisites
(Gross salary =>1,50,000)
16
12BA
PARTICULARS
ISSUE OF TDS CERTIFICATES - 2
· Deductors will not issue TDS certificate in respect of tds made on or after 01.04.2010
· A statement of TDS will be issued either by Income Tax Department or an Agency prescribed.(203AA & 206C(5)/ Rule 31AB)on click here to know Details Form 26AS
FILING OF RETURN
· All TDS returns have to be filed before due dates prescribed.
+ In most of the cases etds return are mandatory(given in next slide)
FILING OF MANDATORY ETDS RETURN
1. All Government department/office or2. All companies.or3. All person required to get his accounts audited under section 44AB in the immediately preceding financial year; or4 The number of deductees’ records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty
NOTIFICATION No. 238/2007, dated 30-8-2007
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 NSDLFILING OF QUARTERLY STATEMENTS - 2
Non-salary
26Q
Salary
24Q
Particulars
Form No.
FILING OF QUARTERLY STATEMENTS - 3
When to file the Quarterly Statements
(FREE SOFTWARE FOR ETDS RETURNS)
15th
June
31st March
15th January
31st December

15th Oct.
30th Sept.
15th July
30th June
Due Date
Q.E.
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
1. Can be filed by any person.
2. Application to be made in Form No.13 to the TDSAO.
3. 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 . However tax deducted upto feb if deposited upto march and march tax upto last date to file Income tax rteurn than allowed In same previous year .(amendment in FINANCE ACT 2008)

CLICK HERE TO CHECK DETAILS
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 TAN-272BB
If the deductor fails to apply for TAN within the prescribed time, he shall be liable for penalty of Rs.10000/-.

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 features-
· Only 2 challans
· Only 1 copy with detachable counterfoil
· For Advance tax and SA tax – Challan No.280
· 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
·

1 comment:

RAJ KUMARI said...

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http://simpletaxindia.blogspot.com/

thanks