PENALTY, INTEREST & SURVEY (TDS) 12/02/2011 SANGHVI SANGHVI & SANGHVI

Size: px

Start display at page:

Download "PENALTY, INTEREST & SURVEY (TDS) 12/02/2011 SANGHVI SANGHVI & SANGHVI"

Hubert Lee
5 years ago
Views:

1 12/02/2011 SANGHVI SANGHVI & SANGHVI 1

2 PENAL AND OTHER CONSEQUENCES FOR NON- COMPLIANCE WITH THE PROVISIONS OF TDS DISALLOWANCE OF EXPENDITURE Sec. 40(a)(i) : Expenditure in respect of certain payments of interest, royalty, fees for technical services or any other sum which is payable outside India or payable in India to a non-resident, not being a company or paid to a foreign company from which tax is deductible would not be allowed if : (a) (b) (c) tax has not been deducted at source on such a payment ; or tax has been deducted but has not been paid in the financial year ; or tax has been deducted but has not been paid in the subsequent year within the prescribed time 12/02/2011 SANGHVI SANGHVI & SANGHVI 2

3 DISALLOWANCE OF EXPENDITURE (Contd ) Sec. 40(a)(ia) : Expenditure in respect of certain payments of interest, royalty, fees for technical services or fees for professional fees, rent, commission or brokerage or amounts payable to a contractor or sub-contractor being resident for carrying out any work on which tax is deductible at source under Chapter XVII-B would not be allowed if : (a) tax has not been deducted at source on such a payment ; or (b) tax has been deducted but has not been paid in the financial year ; or (c) tax has been deducted but has not been paid in the subsequent year within the prescribe time. 12/02/2011 SANGHVI SANGHVI & SANGHVI 3

4 OTHER PENAL CONSEQUENCES Sr.No Section Nature of Default Consequences of default 1 201(1) Failure to deduct tax at source or deposit tax deducted at source Failure to deduct tax at source or deposit tax deducted at source 3 271C Failure to deduct tax at source Deemed to be an assessee in default in respect of the tax. Penalty not exceeding TDS amount Penalty TDS Amount 4 272A(2)(f),(g) Failure to file declaration or furnish TDS Certificates Penalty Rs. 100/- per day during which the default continues restricted to the amount of TDS deductible 12/02/2011 SANGHVI SANGHVI & SANGHVI 4

5 OTHER PENAL CONSEQUENCES (contd ) Sr.No Section Nature of Default Consequences of default 5 272A(2)(i),(l) Failure to furnish statement of perquisites U/s. 192(2C) or quarterly returns by banks, public Company, Co-operative Society,u/s. 206A for interest payments less than Rs / A(2)(k) Failure to file quarterly statements u/s. 200 Penalty Rs. 100/- per day during which the default continues Penalty Rs. 100/- per day during which the default continues restricted to the amount of TDS deductible 7 272B Failure to furnish PAN or furnish incorrect PAN to the person responsible for deducting tax u/s. 139A(5A) or u/s. 139A(5C) Penalty of Rs. 10,000/- 12/02/2011 SANGHVI SANGHVI & SANGHVI 5

6 OTHER PENAL CONSEQUENCES (contd ) Sr.No Section Nature of Default Consequences of default 8 272BB Failure to apply for Tax Deduction Account No. (TAN) or failure to quote or quote incorrect TAN in the TDS Challans, certificates, statements or any other documents 9 276B Failure to deposit TDS after deduction of the same Penalty of Rs. 10,000/- Prosecution minimum 3 months rigorous imprisonment and maximum 7 years ; and with fine False Statement in Verification Prosecution- (i) If tax evaded exceeds Rs. 1,00,000/- - minimum 6 months rigorous imprisonment and maximum 7 years, and with fine. (ii) In any other case - minimum 3 months rigorous imprisonment and maximum 3 years, and with fine. 12/02/2011 SANGHVI SANGHVI & SANGHVI 6

7 Interest U/s. 201(1A) : Without prejudice to the provisions of sub-section 201(1), if any such person, principal officer or company as is referred to in subsection 1 of Section 201 does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under the Income Tax Act, 1961, he or it, shall be liable to pay simple interest, - 12/02/2011 SANGHVI SANGHVI & SANGHVI 7

8 U/s. 201(1A) (Contd ) (i) At one percent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted ; and (ii) At one and one-half percent for every month or a part of a month on on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of Section 200.

9 SURVEY (TDS) 12/02/2011 SANGHVI SANGHVI & SANGHVI 9

10 SURVEY (TDS) Purpose of Survey Circumstances leading to survey Scope of Survey Jurisdiction 12/02/2011 SANGHVI SANGHVI & SANGHVI 10

11 Difference between Survey under Income Tax & Survey under TDS 11 Survey under Income Tax Survey under TDS The purpose of survey is to detect undisclosed revenue The Concentration is on the Income Side Survey can be conducted at any place of business whether principal place or not The main emphasis is on physical verification of stock and / or cashin-hand The purpose of survey is to identify the defaults The Concentration is on the Expense side Survey can be conducted at the principal place of business / registered office / where principal officer is located The main emphasis is on expenses on which TDS is not deducted, including foreign remittances SANGHVI SANGHVI & SANGHVI 12/02/2011

12 SURVEY (TDS) Duties of the survey party The survey party shall enter the business premises during the normal hours of business only. He should produce identification for the entire team He shall allow the conduct of regular business He shall allow meals and rest at reasonable intervals He shall allow access to medical facility in case of need He shall give copy of the statement recorded on conclusion of action He shall allow the presence of authorised representative specially in case of need 12/02/2011 SANGHVI SANGHVI & SANGHVI 12

13 SURVEY (TDS) Duties of the assessee He shall allow the survey party to enter the business premises on verification of identification and / or authorisation of each member of the party He shall afford facility to verify books of account and other documents He shall allow the placing of marks of identification on books of account and / or other documents and permit taking extract thereof He shall reply to the questions asked by the survey party which maybe useful or relevant for proceedings He shall not obstruct the conduct of survey 12/02/2011 SANGHVI SANGHVI & SANGHVI 13

14 SURVEY (TDS) Duties of the assessee He shall not tamper with the books of account and / or other documents He shall not give false or misleading information 12/02/2011 SANGHVI SANGHVI & SANGHVI 14

TDS Seminar for Residents Welfare Associations

TDS Seminar for Residents Welfare Associations 27 th July 2018 What is TDS? Mode of quick and efficient collection of taxes Tax deducted at the point of generation of income Tax deducted by the payer &