TDS Provisions - Summary of all the Recent Amednments to TDS Provisions

Transcription

1 TDS Prvisins - Summary f all the Recent Amednments t TDS Prvisins We have presented belw the summary f all the ntificatin. Instructin, circulars, budget amendments etc issued by gvernment which have an effect n TDS Prvisins fr the financial year and as well as n financial year Instructin n sectin 200 Instructin regarding parameters fr prcessing e-tds returns [F.N. 275/73/2009-IT(B)] dated In the present system f prcessing e-tds returns, the returns are prcessed nline and mismatch reprt shwing defaults is generated. Based n these reprts, theao issues shw cause ntices t the deductrs Substantial returns are pending where deducteewise default due t shrt deductin is less than Rs.10/- It has been decided that where the default n accunt f shrt deductin is less than Rs.100/- fr each deductrthe demand is runded ff t zer; and After cnsidering the abve if the deductrwise demand/default f Rs.100/- r less will be ignred fr further actin Hwever, the fficers have been instructed t ensure that the shrt deductin shuld nt becme habitual Instructin N.6/2010 issued by CBDT n 9 August 2010 issued t curb the indiscriminate issuance f 197 certificates Instructin N.8/2006 dated laid dwn that certificate f lwer/nil deductin u/s1 97 are nt t be issued indiscriminately and prir administrative apprval f the cncerned Range head shall be btained befre issue f each certificate Instructin 7/2009 read with F.N.275/23/2007-IT(B) laid dwn mnetary limits fr prir adminitrative apprval f the CIT-TDS r DIT- Internatinal Taxatin. Such certificates are issued manually It is nw instructed that certificates u/s 197 shall be generated and issued by the AO mandatrily thrugh the ITD system nly. In case the certificate cannt be generated n the date f issue, the AO shall uplad the data n the system within 7 days f manual issue The manual system f issuing certificates had the fllwing issues: - N check as t whether such certificate has been issued by the authrized/cmpetent AO having jurisdictin - N infrmatin available as regards number f certificates issued r the quantum f revenue invlved.

2 - N systematic reference number which culd be amenable t verificatin. It is nt pssible t ascertain the veracity f claim, f the deductr abut n/lw deductin having been made n the strength f a 197 certificate actually issued by the department Issue f certificates u/s 197 vide the ITD system shall have the fllwing benefits: - - Cmplete infrmatin f he deductr and deductee will be available with the department - This infrmatin will be useful in prcessing e-tds returns - The nn-deductin defaults detected by the system when prcessing the TDS returns wuld reduce substantially - There will be a cntrl n the number f certificates issued Amendment under Finance Act, 2011 (insertin f sectin 194LB) w.e.f. 1 st June 2011, ntified infrastructure debt fund will deduct tax at surce at the rate f 5% (plus applicable surcharge & cess) n interest payable t a nn-resident at the time f credit r payment, whichever is earlier. Amendment t Rule 28AA (Certificate fr deductin at lwer rates r n deductin f tax frmincme ther than dividends) Nw in rder t btain a lwer/nil deductin certificate, is it necessary fr the AO t be satisfied that theexisting and estimated tax liability f the applicant justifies the deductin f tax at lwer rate r n deductin f tax. The mechanism f arriving at the rate f tax deductin has been eliminated. The AO shall determine the rate f tax deductin after cnsidering the fllwing: 1. Tax payable n estimated incme f the previus year relevant t the AY; 2. Tax payable n the assessed r returned incme f the last three previus years; 3. Existing liability under the ITA and Wealth-tax Act, 1957; 4. Advance tax payment fr the AY relevant t the previus year till the date f making applicatin. 5. Tax deducted at surce fr the AY relevant t the previus year till the date f making applicatin under sub-rule (1) f rule 28; and 6. Tax cllected at surce fr the AY relevant t the previus year till the date f making applicatin under sub-rule (1) f rule 28. The certificate shall be issued direct t the persn respnsible fr deducting the tax under advice t the persn wh made an applicatin fr issue f such certificate

3 Amendment t Rule 31A (Quarterly statement f deductin f tax under sub-sectin (3) f sectin200) The deductr at the time f preparing statements f tax deducted will be required t furnish the fllwing additinal particulars besides his PAN, TAN, PAN f deductees, particulars f taxes paid t the Central Gvernment: 1. amunt paid/credited n which tax was nt deducted in view f the issue f certificate f n deductin f tax under sectin 197 by the AO f the payee; 2. amunt paid r credited n which tax was nt deducted n payments made t transprters wh have prvided their PAN. Ntificatin 41/2010 dated 31 May 2010 w.e.f April 1, Due dates fr payment f TDS Amunt paid / credited Old Prvisins On 31 March 31 May New Prvisins On any ther day In the mnth f March In ther mnths Due date f depsit f TDS 7th f the next mnth 30 April 7th f the next mnth 2. In the case f a cmpany r a persn (ther than a cmpany) t whm the prvisins f tax audit are applicable, TDS must be remitted electrnically (by way f internet banking facility r debit card) t the RBI r SBI r any authrized bank accmpanied by an electrnic incme-tax challan 3. Quarterly filed f TDS returns a. Statement f deductin f tax under sectin 192 Frm n. 24Q b. Statement f deductin f tax under ther sectins

4 In case f the deductee being a nn-resident r a freign cmpany r resident but nt rdinarily resident Frm n. 27Q In case f all ther deductees Frm n. 26Q 4. If the number f deductee s / cllectee s recrds in a statement fr any quarter are twenty r mre, the statements are required t be furnished electrnically Quarter ended Due date Requirements f the frms 30 June 15 July TAN f deductr PAN f deductr PAN f all deductees 30 September 15 Particulars f the tax paid t the Octber Central Gvernment, including Challan identificatin 31 December 15 number January 31 March 15 May 4. Timelines fr issue f TDS certificates Deductin u/s Frm N. Requirements f frm Valid PAN f the deductee Valid TAN f the deductr Time fr furnishing the frm Peridicity Annual Due date By 31 May

5 Any ther prvisin Challan identificatin number in case f payment thrugh bank Receipt number f the relevant quarterly TDS statement(s) 1 6A Same as abve Peridicity Quarterly Due date Within 15 days frm the due date fr furnishing the quarterly TDS statements 6. The deductr may use digital signatures t authenticate Frm 16 Once digitally signed, the cntents f the certificate are nt amenable t change The certificates must have a cntrl number and a lg f such certificates must be maintained by the deductr 7. Frm 16 nw has tw parts: Part A dealing with basic infrmatin regarding the deductr and emplyee and the summary f tax deducted f surce; If an assessee is emplyed by mre than ne emplyer during the year, each f the emplyers are required t issue Part A f the certificate; Part B dealing with details f salary and tax deducted / paid. Part B may be issued by each f the emplyers r the last emplyer at the ptin f the assessee 8. The prvisin fr issue f Frm 1 6AA in cases f salaries nt exceeding Rs. 150,000 is nt cntained in the amended rules

6 New sub-sectins have been added t Sectin 201 w.e.f (3) N rder shall be made under sub-sectin (1) deeming a persn t be an assessee in default fr failure t deduct the whle r any part f the tax frm a persn resident in India, at any time after the expiry f: 2 years frm the end f the financial year in which the statement is filed in a case where the statement referred t in sectin years frm the end f the financial year in which payment is made r credit is given, in any ther case Prvided that such rder fr a financial year cmmencing n r befre 1 April 2000 may be passed at any time n r befre the 31st day f March, (4) The prvisins f sub-clause (ii) f sub-sectin (3) f sectin.153 and f Explanatin t Sec153 shall, s far as may, apply t the time limit prescribed in sub-sectin(3) Finance Act 2010 has increased the interest u/s 201(1A) rate w.e.f. 1 July 2010 Interest n late deductin/depsit f tax Interest frm the date when tax deductible t actually deducted Interest frm the date when tax actually deducted t actually paid Existing New 1 % 1 % 1 % 1.5%