SEMINAR ON TAX DEDUCTED AT SOURCE PRESENTED BY CA B. D SOUZA

Transcription

1 SEMINAR ON TAX DEDUCTED AT SOURCE PRESENTED BY CA B. D SOUZA

2 IS TDS TEDIOUS???

3 SET UP OF TDS

4 TAN (TAX DEDUCTION ACCOUNT NUMBER) 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

5 PAYMENTS COVERED UNDER SCHEME OF TDS (FOR CHARITABLE TRUSTS) Salary (Sec.192) Payments to Contractors and Subcontractors (Sec.194C) Commission or Brokerage (Sec. 194H) Rent (Sec. 194I) Payment on transfer of Certain immovable property other than Agricultural Land (Sec.194IA) Fees for Technical or Professional Services (Sec. 194J)

6 SALARY (Section. 192 (B)) Payer Employer Who is the payer Employer Who is the recipient Recipient Employee Employee Payment Covered Payment Taxable Salary Covered of the employee Taxable Salary of the employee At what time TDS to be deducted At the time of payment TDS Maximum to be amount deducted which can be paid without tax At deduction the time of payment The amount of exemption limit (i.e.,rs /190000/ for A.Y ) Rate at which tax to be deducted. Maximum As per Calculation amount which can be The amount of exemption limit paid When without the provisions tax deduction are not applicable (i.e.,rs.250,000 for A.Y ) -- if the total income is less than Is it possible to get the payment without tax deduction or with lower tax deduction The employee can make application in Form No , to the Assessing then Officer the to get exemption the certificate of lower tax deduction or no tax deduction. Rate at which tax to be deducted. limit is Rs. 300, As per Calculation

7 PAYMENTS TO CONTRACTORS (Section. 194 (C)) Payer Recipient Rate of TDS Payments Covered under the Section Basic Limit Point of Deduction Specified Person Any Resident Person 2% for persons other than individuals 1% for Individuals All types of Contract works i.e. Payments to civil contractors, printers, caterers, tour operators, advertisements, decorators etc. Rs. 30, incase of single payment; or Rs. 1,00, incase of series of payment (i.e. aggregate of all payments) throughout the year. At the time of payment OR at the time of credit (Even advances are considered as payments)

8 HOW TO FIND WHETHER THE CONTRACTOR IS AN INDIVIDUAL OF HUF If the 4 letter of the PAN of Contractor is P (as shown below then the Contractor is an individual) or H ( then the contractor is an HUF)

9 RENT (Section. 194 (I)) Payer Recipient Rate of TDS 10% Payments Covered under the Section Basic Limit Point of Deduction Any Person paying Rent(other than individual and HUF) Any Resident Person Rent rent includes all payments for use of Land, Building, Machinery, Plant, equipments, Furniture and Fittings Rs. 180, either through single payment or through series of payments in a financial year At the time of payment or at the time of credit (Even advances are considered as payments)

10 PAYMENT ON TRANSFER OF CERTAIN IMMOVABLE PROPERTY OTHER THAN AGRICULTURAL LAND (Section. 194 (IA)) Payer Recipient Rate of TDS 1% Payments Covered under the Section Any Person Purchasing Land or Buildings other than agricultural Land Any person who is transferring the Immovable Property Basic Limit Rs. 50,00, Point of Deduction Sale of all immovable property other than Agricultural Land At the time of payment or at the time of credit (Even advances are considered as payments if exceeding the limit)

11 FEES FOR PROFESSIONAL OR TECHNICAL SERVICES (Section. 194 (J)) Payer Recipient Rate of TDS 10% Payments Covered under the Section Basic Limit Point of Deduction All persons other than individual and HUF Any Resident Person All types of Payments for Professional and Technical Services Professionals includes Advocates, Chartered Accountants, Doctors, Architects and Engineers etc. Technical Services Includes Smart Class Payments, Royalty, software Development etc. Rs. 30, per Year At the time of payment OR at the time of credit (Even advances are considered as payments)

12 FEES FOR TECHNICAL SERVICES - SMART CLASSES (Section. 194 (J)) Payer Recipient Rate of TDS 10% Payments Covered under the Section Basic Limit Point of Deduction All persons other than individual and HUF Any Resident Person All types of Payments for smart classes for the content and services (including installation charges). Payments for Hardware portion does not attract TDS provided VAT paid separate bills are obtained. Rs. 30, per Year At the time of payment OR at the time of credit (Even advances are considered as payments)

13 OTHER PROVISIONS If PAN is not provided/or if the deductee does not have PAN then Tax has to deducted at the rate of 20%.

14 TIME LIMIT FO PAYMENT OF TAX DEDUCTED AT SOURCE DEDUCTOR APRIL TO FEBRUARY MARCH Government All other Persons On or before 7 th of Next month for Salary and On the same day for other than salary On or before 7 th of Next month in which tax was deducted On or before 7 th of April On or before 30 th of April

15 CHALLAN FOR PAYMENT OF TAX DEDUCTED AT SOURCE (ITNS 281)

16 RETURN TYPE RETURN TYPE Salary Returns Returns other than salary Returns PERIODICITY Quarterly in Form No. 24Q Quarterly in Form No. 26Q

17 TIME LIMIT FOR PAYMENT OF FILING OF TDS RETURNS Quarter - 1 (April to June) QUARTER Quarter 2 (July to September) DUEDATE FOR FILING QUARTERLY RETURN On or before 15 th July On or before 15 th October Quarter 3 (October to December) Quarter 4 (January to March) On or before 15 th January On or before 15 th May

18 TIME LIMIT FOR ISSUE OF TDS CERTIFICATES (Sec. 203) Form No. 16 CERTIFICATE 31 st May DUEDATE FOR ISSUE Form No. 16A Within 15 days from the date of filing the Form 26Q

19 PENAL PROVISIONS NATUREOF DEFAULT Failure to Deduct Tax (Sec.201 (1)) Failure to Deposit the tax deducted at source (Sec.201(1A) and Sec.276B) Failure to Apply for TAN (Tax Deduction Account Number) (Sec.203A and Sec.272BB) INTEREST, PENALTY AND PROSECUTION Penalty : Amount equal to tax not deducted Interest : 1% per month from the date from which tax is not deducted till the date deduction. Interest : 1.5% per month from the date of deduction till the date of Deposit. Prosecution : Rigorous Imprisonment for a term which shall not less than 3 months but may extend to 7 years with Fine Penalty : Rs. 10,000.00

20 PENAL PROVISIONS CONTINUED. NATUREOF DEFAULT Failure to Furnish Returns within due date (Sec. 200(3) and Sec. 272A(2)(k)) Failure to issue TDS certificates within the time limit prescribed (Sec.272A(2)(g)) INTEREST, PENALTY AND PROSECUTION Penalty : Rs per day during which the failure continues subject to maximum of TDS amount Penalty : Rs per day during which the failure continues subject to maximum of TDS amount

21 SO TDS IS TEDIOUS UNLESS COMPLIED

22 QUESTIONS???

23 THANK YOU