DEDUCTION, COLLECTION AND RECOVERY OF TAX

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1 DEDUCTION, COLLECTION AND RECOVERY OF TAX Section Particulars 190 different modes of payment of tax: tds, tcs, advance tax, tax u/s 192(1A) 191 failure to deduct tax, and direct payment of tax 192 tds from salary 192(1A) tax on perquisites by employer 193 tds from interest on securities 194 tds from dividend 194A tds from interest other than interest on securities 194B tds from winnings from lotteries, cross word etc. 194BB tds from winnings from horse races 194C tds from payment to a contractor 194D tds from insurance commission 194E tds from Payments to non-resident sportsmen or sports association 194EE tds from payment under national saving scheme 194F repurchase of units of MF 194G tds from commission etc. on sale of lottery tickets 194H tds from commission or brokerage 194I tds from Rent 194J tds from fee for professional or technical services 194LA tds from Payment of compensation on acquisition of certain immovable property 195 other sums payable to a non-resident 195A income net of tax: gross up required 196 no tds from payment to govt, RBI, MF, corporation 197 certificate for deduction at a lower rate or no tds 197A no tds in certain cases: declaration in prescribed forms (15G or 15H) 198 TDS is income received by the payee 199 credit for tds 200 payment of tax and prescribed statement 201 failure to deduct tds or payment thereof: deemed assessee in default+ interest payable clarification about TDS is only one mode of tax payment, other modes also can be used for 202 recovery of tax 203 certificate for tds 203A common TAN for tds and tcs 204 persons responsible for paying TDS 205 bar against direct demand in case of tds deducted furnishing statement in respect of interest paid to resident, by banking co., co-operative 206A bank or public co. 206AA furnishing PAN to deductor, higher rate of TDS, PAN for 197, 197A, ~ 1 ~

2 A. PAYMENT AND RECOVERY OF TAXES 1. PAYMENT OF TAX [section 190] Although income for the previous year is taxable in the relevant A.Y., the income-tax is recovered in the previous year through (1) Tax deduction at source (TDS) (2) Tax collection at source (TCS) (3) Payment of advance tax (4) Payment u/s 192(1A) by employer on non-monetary perquisites. 2. DIRECT PAYMENT [SECTION 191] a. In the following cases, tax is payable by the assessee directly (1) Income in respect of which TDS is not applicable. (2) Income in respect of which tax has not been deducted. b. If any person, including the principal officer of a company, Who is required to deduct any sum in this act, or Who is an employer refered to in section 192(1A). does not deduct or after deducting fails to pay or does not pay such amount, shall be deemed to be an assessee in default. However, if the assessee himself has paid the tax, this provision will not apply. 3. Deduction only one mode of recovery [Section 202] a. Recovery of tax through deduction at source is only one method of recovery. b. The A.O. can use any other prescribed methods of recovery in addition to TDS. 4. Income payable net of tax [Section 195A] Where, under an agreement or other arrangement, the TDS is to be borne by the payer, then, for the purposes of TDS such income shall be increased to such amount as would, after TDS thereon, be equal to the net amount payable. i.e. :- TDS should be deposited = Net amount paid x rate of TDS Note: However, no grossing up is required in the case of tax paid [u/s 192(1A)] by an employer on the non-monetary perquisites provided to the employee. 5. Tax deducted is income received [Section 198] Tax deducted in accordance with this chapter (XVII) (except tax paid by employer u/s 192(1A) on non-monetary perquisites) shall, for the purpose of computing the income of an assessee, be deemed to be income received. 6. Bar against direct demand on assessee [Section 205] :Where tax is deducted at source, the assessee shall not the called upon to pay the tax himself to the extent to which tax has been deducted from that income. 7. Credit for tax deducted at source [Section 199] (1) TDS in accordance with the above provisions and paid to the credit of the Central Government shall be treated as payment of tax on behalf of the person from whose income the deduction was made. (2) Any sum referred to in section 192(1A) and paid to the Central Government, shall be treated as the tax paid on behalf of the person in respect of whose income, such payment of tax has been made. (3) The CBDT is empowered to frame rules for the purpose of giving credit in respect of tax deducted or tax paid under provisions of TDS. The CBDT also has the power to make rules for giving credit to a person other than the persons mentioned in (1) and (2) above. Further, the CBDT can specify the assessment year for which such credit may be given. ~ 2 ~

3 B. DEDUCTION OF TAX AT SOURCE from various income/ payments: If the payee Fails to provide PAN - TDS at the rate prescribed or 20%, whichever is higher. 1. Salary [Section 192] Payee: any person. Nature of payment: any income chargeable under salaries head. b. At which average rate. [average rate = income tax on total income / total income.] payment. d. Tax on non-monetary perquisites: The employer may pay tax on perquisites, at his option, in lieu of TDS. [section 192(1A)] Tax on perquisites: calculated at the average rate, shall be paid every month along with TDS on monetary payments. [section 192(1B)] [average rate = income tax on income under this head/ income under this head] e. Income from other employer: Where an assessee is simultaneously employed under more than one employer or takes up a job with another employer after his resignation or retirement from the services of the former employer, he may furnish to the current employer, the details of the income under this head due or received from other employer, the tax deducted therefrom and such other particulars Then current employer shall take such information into consideration for TDS on income under this head. f. Income under any other sources of income: Where employee has salary income in addition to other income, he may send to the employer the following: Particulars of such other income Particulars of any tax deducted under any other provision loss, if any, under the head Income from house property Then employer shall take such particulars into account for calculating TDS. Except in cases where loss from house property has been adjusted against salary income and deduction under chapter VIA), the tax deductible from salary should not be reduced as a consequence of making the above adjustments. g. Other: In case salaries payable in a foreign currency, this shall be converted into Indian rupees at the prescribed rate of exchange in Rule 26, i.e. TTBR on the date on which tax is required to be deducted. In case employees of Government, companies, co-operative societies, local authorities, universities, institutions, associations or bodies, tax shall be deducted after allowing relief u/s 89(1), where eligible. The employee shall furnish (within one month from the end of P.Y.) to the employee the followings: TDS certificate in form 16, and A statement giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof in form 12BA. [where salary paid/payable exceeds Rs Interest on securities [Section 193] Payee : a resident Nature of payment: any income by way of interest on securities. b. At which rate: rate in force or lower rate u/s 197. [@10%] credit of such income to the account of the payee (whether called interest Payable a/c or suspense a/c or any other a/c) or ~ 3 ~

4 d. Exemptions: no TDS in following cases, if recipient makes a declaration to the payer for paying such interest on securities. :- 1. Any interest payable on any Government security except interest (if exceeds Rs.10000) on 8% Savings (Taxable) Bonds, Interest payable to LIC, GIC, subsidiaries of GIC or any other insurer, provided the securities are owned by them or they have full beneficial interest. 3. Interest payable on any security issued by a company, where such security is in dematerialised form and listed on a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 and the rules made thereunder. 3. Dividends [Section 194] Payer: domestic company Payee: any resident Nature of payment Dividend u/s 2(22)(e) (payable to resident). At which rate: rate in force or lower rate u/s 197 [@10% ] Exemption: Dividend not exceed Rs.2,500 in a year and paid by an account payee cheque to an individual. Dividend payable to LIC, GIC, subsidiaries of GIC or any other insurer, provided the shares are owned by them or they have full beneficial interest. 4. Interest other than interest on securities [Section 194A], Other than individual or HUF not liable to get the accounts audited u/s 44AB in the immediately preceding year Payee: a resident Nature of payment: interest other than interest on securities. b. At which Rate: rate in force or lower rate u/s 197. [@10%]. credit of such income to the account of the payee (whether called interest Payable a/c or suspense a/c or any other a/c) or d. Exemptions: 1. When the aggregate of interest credited or paid or likely to be credited or paid during the financial year to the account of or to the payee is not more than Rs.10000, in case payer is a banking company, or a co-operative society engaged in banking business; and Rs.10000, in case of deposits with post office under notified schemes. Rs.5000, in other cases The above ceiling will operate: (i) on a branch of a bank; (ii) with reference to only time deposits. (not recurring deposits) 2. Interest paid or credited by a firm to any of its partners; 3. Interest paid or credited by a co-operative society to a member there of or any other co-operative society; 4. Interest paid or credited in respect of deposits under any scheme framed and notified by C.G.; 5. Interest income credited or paid in respect of deposits (other than time deposits made on or after ) with (i) a bank to which the Banking Regulation Act, 1949 applies; or (ii) a co-operative society engaged in carrying on the business of banking. 6. Interest credited or paid in respect of deposits with primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank. ~ 4 ~

5 7. Interest payable by the Central Government under any provisions of the Income-tax Act, the Estate Duty Act, the Wealth-tax Act, the Gift-tax Act, the Companies (Profits) Surtax Act or the Interest Tax Act. 8. Interest paid or credited to the following entities: a) banking companies, or co-operative societies engaged in the business of banking, including cooperative land mortgage banks; b) financial corporations established under any Central, State or Provincial Act. c) the Life Insurance Corporation of India. d) companies and co-operative societies carrying on the business of insurance. e) the Unit Trust of India; and f) notified institution, association, body or class of institutions, associations or bodies. 9. interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such interest credited or paid during the financial year does not exceed Rs.50, income paid or payable by an infrastructure capital company or infrastructure capital fund or public sector company or scheduled bank in relation to a zero coupon bond issued on or after Winnings from lotteries, crossword puzzles [Sections 194B] Payee: any person Nature of payment: any income by way of winnings from lottery or crossword puzzle or card came and other game of any sort, b. At which rate: rate in force [@30% ] payment. d. Exemption: if amount of payment does not exceed Rs.5,000. [Rs.10000, w.e.f ] e. Winnings in kind: in a case where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to TDS. the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the winnings. 6. Winnings from horse races [Section 194BB]: following persons are responsible to TDS - Payer: a bookmaker; or a person to whom a licence has been granted by the Government under any law for the time being in force - (a) for horse racing in any race course; or (b) for arranging for wagering or betting in any race course. Payee: any person Nature of payment: any income be way of winnings from any horse race. b. At which payment d. Exemption: if the amount does not exceed Rs.2500 [Rs.5000 w.e.f ] in a single winning whether paid in installments. 7. Payments to contractors [Section 194C] Payer: Any person Payee: any resident (the contractor) Nature of payment: any sum for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person. [contract includes sub-contract] b. At which in case payee is an idividual or in other case. credit of such income to the account of the payee (whether called suspense a/c or any other a/c) or ~ 5 ~

6 d. Exemption: If such amount does not exceed Rs.20000/- (Rs.30000/- w.e.f ) in a single payment or Rs.50000/- (Rs.75000/- w.e.f ) in aggregate during the year. No individual or HUF shall be liable for TDS on the sum credited or paid exclusively for personal purposes of such individual or any member of HUF. Any sum to a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his PAN, to the payer. In this case, the payer shall furnish, to the prescribed income-tax authority or the person authorised by it, such particulars, in such form and within such time as may be prescribed. [goods carriages shall have the meaning assigned to it in the Explanation to section 44AE(7) e. Note: specified person shall mean, a) the Central Government or any State Government; or b) any local authority; or c) any corporation established by or under a Central, State or Provincial Act; or d) any company; or e) any co-operative society; or f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or g) any society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India; or h) any trust; or i) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or j) any Government of a foreign State or a foreign enterprise or any association or body established outside India; or k) any firm; or l) any person, being an individual or a HUF or an AOP or a BOI, if such person, i. does not fall under any of the preceding sub-clauses; and ii. is liable to audit of accounts u/s 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor; work shall include a) advertising; b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting; c) carriage of goods or passengers by any mode of transport other than by railways; d) catering; e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer, [but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer.] For the point no. (e) in above note, If value of material is mentioned separately in invoice, Tax shall be deducted on invoice value excluding value of material, otherwise on whole invoice value. 8. Insurance commission [Section 194D] Payee: a resident Nature of payment: any income by way of insurance commission or other remuneration in consideration for soliciting or procuring insurance business. ~ 6 ~

7 b. At which rate: rate in force or lower rate u/s 197. credit of such income to the account of the payee, or d. Exemption: if such income does not exceed Rs.5000 (Rs.20000/- w.e.f ) in a year. 9. Payments to non-resident sportsmen or sports association [Section 194E] Payee: a non-resident sportsman (including an athlete) who is not a citizen of India or a nonresident sports association or institution Nature of payment: any income referred to in section 115BBA. b. At which credit of such income to the account of the payee, or d. Note: income referred to in section 115BBA - (i) income by way of - (a) participation in any game or sport in India (not games like crossword puzzles, horse races etc. taxable u/s 115BB); or (b) advertisement; or (c) contribution of articles relating to any game or sport in India in newspapers, magazines or journals. (ii) Guarantee amount in relation to any game or sport played in India. However, games like crossword puzzles, horse races etc. taxable under section 115BB are not included herein. 10. Payments in respect of deposits under National Savings Scheme etc. [Section 194EE] Payee: any person Nature of payment: any amount from National Savings Scheme Account u/s 80CCA. b. At which payment. d. Exemption: if such payment does not exceed Rs.2500 in a year. Or payments is made to the heirs of the assessee. 11. Repurchase of units by Mutual Fund or Unit Trust of India [Section 194F] Payer: Any person Payee: any person Nature of payment: any amount on account of repurchase of units covered u/s 80CCB(2) b. At which 10% payment. 12. Commission etc. on the sale of lottery tickets [Section 194G] Payee: any person Nature of payment: any income by way of commission, remuneration or prize (by whatever name called) on lottery tickets. b. At which credit of such income to the account of the payee (whether called interest Payable a/c or suspense a/c or any other a/c) or d. Exemption: if such amount does not exceed Rs.1,000. ~ 7 ~

8 13. Commission or brokerage [Section 194H] Payer: Any person, Other than individual or HUF not liable to get the accounts audited u/s 44AB in the immediately preceding year Payee: a resident Nature of payment: any income by way of commission (other than insurance commission) or brokerage. b. At which w.e.f (5% upto ). credit of such income to the account of the payee (whether called interest Payable a/c or suspense a/c or any other a/c) or d. Exemption: if such income does not exceed Rs.2500 (Rs.5000/- w.e.f ) in a year. commission or brokerage payments by BSNL or MTNL to their public call office (PCO) franchisees. e. Note: Commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered, or for any services in the course of buying or selling of goods, or in relation to any transaction relating to any asset, valuable article or thing, other than securities. this section is not applicable to professional services. Professional Services means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as notified by the CBDT for the purpose of compulsory maintenance of books of account under section 44AA. 14. Rent [Section 194-I] Payer: Any person (Other than individual or HUF not liable to get the accounts audited u/s 44AB in the immediately preceding year) Payee: a resident Nature of payment: any income by way of rent. b. At which for use of plant or machinery or for use of other asset. credit of such income to the account of the payee (whether called suspense a/c or any other a/c) or d. Exemption: if such income credited or paid or likely to be credited or paid during year does not exceed Rs.1,20,000. (Rs /- w.e.f ) e. Note: Rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any land; or building (including factory building); or land appurtenant to a building (including factory building); or machinery; or plant; or equipment; or furniture; or fittings. whether or not any or all of the above are owned by the payee. CBDT Circular No.1/2008 dated : the provisions of 194-I are not applicable to the cooling charges paid by the customers of the cold storage. However, since the arrangement between the customers and cold storage owners are basically contractual in nature, the provision of section 194-C will be applicable. CBDT Circular No.4/2008 dated : Service tax paid by the tenant doesn t partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore, TDS u/s 194-I would be required to be made on the amount of rent paid/payable without including the service tax. ~ 8 ~

9 15. Fees for professional or technical services [Section 194J] Payer: Every person (Other than individual or HUF not liable to get the accounts audited u/s 44AB in the immediately preceding year) Payee: any resident. Nature of payment: any sum by way of fees for professional services or fees for technical services or royalty or non-compete fees referred to in section 28(va). b. At which credit of such income to the account of the payee (whether called suspense a/c or any other a/c) or d. Exemption: If such income credited or paid or likely to be credited or paid during a year does not exceed Rs.20,000 (Rs.30000/- w.e.f ) for each type of services (professional services, technical services, royalty or non-compete fees.) Such income credited or paid by Individual or HUF, exclusively for personal purposes. e. Note: Professional services means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the CBDT for the purposes of compulsory maintenance of books of account u/s 44AA. 16. Payment of compensation on acquisition of certain immovable property [Section 194LA] Payee: a resident Nature of payment: any sum in the nature of (i) compensation or the enhanced compensation or (ii) the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land). b. At which 10% payment. d. Exemption: if such amount does not exceed Rs.1,00,000 in a year. e. Note: Immovable property means any land or any building or part of a building. 17. Other sums (payable to non-residents) [Section 195] Payee: a non-resident or a foreign company Nature of payment: any sum (other than salaries) b. At which rate: rate in force [@ credit of such income to the account of the payee (whether called interest Payable a/c or suspense a/c or any other a/c) or d. Exemption dividend exempt u/s 10(34). e. Note: payer is also required to furnish the information relating to payment of any sum in such form and manner as may be prescribed by the CBDT. In the case of interest payable by the Government or a public sector bank or a public financial institution within the meaning of section 10(23D): TDS at the time of payment. ~ 9 ~

10 C. CERTAIN FACILITIES AVAILABLE FOR TDS: 1. Certificate for Deduction of Tax at a lower rate [section 197] Applicable: for TDS u/s 192, 193,194,194A, 194C, 194D, 194G, 194H, 194-I, 194J 194K, 194LA and 195. [i.e except TDS u/s 194B, 194BB, 194E, 194EE, 194F, 194L. Procedure: the assessee can make an application to the A.O. for deduction of tax at a lower rate or for nondeduction of tax. If the A.O. is satisfied that the total income of the recipient justifies the deduction of income-tax at lower rates or no deduction of income-tax, as the case may be, he may give to the assessee such certificate, as may be appropriate. Where the A.O. issues such a certificate, then the payer shall deduct income-tax at such lower rates specified in the certificate or deduct no tax, as the case may be, until such certificate is cancelled by the Assessing Officer. No such certificate shall be granted by the A.O., unless application made for it contains PAN of deductee. 2. No deduction in certain cases [section 197A] a. Dividends and any sum out of National Savings Scheme Account: [197(1)] A resident individual, whose estimated total income of the P.Y. is less than the B.E.L., can receive such income without TDS u/s 194 and 194EE. b. income of the nature referred to in section 193 or 194A:- [197(1A)] A person (other than a company or a firm), whose total income of the P.Y. is less than the B.E.L., can receive such income without TDS u/s 193 or 194A. Procedure: (for a and b ) Such person (payee), shall furnish to the payer (of the income referred to in section 193 or 194 or 194A or 194 EE), a declaration* in writing (in form 15G, & in form 15H in case senior citizen) in duplicate in the prescribed form to the effect that the tax on his estimated total income of the P.Y. in which such income is to be included in computing his total income will be nil. On receipt of such declaration, the payer will be required to deliver or cause to be delivered to the Chief Commissioner or Commissioner, one copy of the declaration on or before the 7th day of the next month. [197A(2)] Restrictions: The provisions of this section will, however, not apply where amount any income referred to above or aggregate amount of above said incomes exceeds the B.E.L. [197(1B)] For a senior citizen (age is 65 years or more at any time during the P.Y.), the above said restriction is not applicable. [197(1C)] * Such declaration shall not be valid unless he furnishes his PAN in such declaration. [206AA] c. No deduction of tax shall be made by an Offshore Banking Unit from the interest paid on - (i) deposit made by a non-resident/not-ordinarily resident on or after ; or (ii) borrowing from a non-resident/not-ordinarily resident on or after [197(1D)] d. No deduction of tax shall be made from any payment to any person for, or on behalf of, the New Pension System Trust referred to in section 10(44). 3. TDS on income from Deep Discount Bonds [Circular No.2/2002 dated ] [section 193/ 195] a. When to deduct: at the time of redemption of such bonds, irrespective of whether the income from the bonds has been declared by the bond-holder on accrual basis from year to year or is declared only in the year of redemption. b. In case the bond-holder had declared income on accrual basis from year to year:- Such person is entitled to make an application u/s 197, requesting the AO to issue a certificate for no deduction of tax or deduction at a lower rate. In such a case, the assessee should furnish, along with the prescribed Form No.13, details of the income offered for tax by him from year to year. ~ 10 ~

11 In case the assessee is not the original subscriber, and has acquired the bonds from some other person, he shall furnish the relevant particulars including the name, address and PAN, of such other person. On satisfying that the assessee has declared his income from the bonds from year to year on accrual basis during the period the bond was held by him, the A.O. shall issue a certificate u/s 197. c. Original subscriber of the Bond, may furnish a declaration u/s 197A, if no tax is payable on his total income, including the interest accruing during the year of redemption. 4. Interest or dividend or other sums payable to Government, RBI or certain corporations [Section 196] a. No deduction of tax shall be made by any person from any sums payable to i. the Government; or ii. the RBI; or iii. a corporation established by or under a Central Act, which is, under any law for the time being in force, exempt from income-tax on its income; or iv. a Mutual Fund specified u/s 10(23D). b. This provision is applicable, If any sum is payable to the above entities by way of - i. interest or dividend in respect of securities or shares, provided such securities are owned by them and they have full beneficial interest, or ii. any income accruing or arising to them. D. Duty of person deducting tax [Section 200] 1. Deposit of Tax: The persons responsible for deducting the tax at source [and and employer paying tax u/s 192(1A)] should deposit the sum so deducted to the credit of the C.G. within the prescribed time. The payment of TDS or TCS shall also be made electronically under rule 125, by the corporate assessee and assessee subject to tax audit mandatory. Prescribed time limits for depositing tax: Different situations Where payer is the Govt. or payment is made on behalf of Govt. When payer is a person other than Govt. and amount is credited or paid in march Tax payable by employer u/s 192(1A) on nonmonetary perquisites provided to employees In any other case Time limit for deposit tax Same day (without challan), or 7 days from last date of month in which deducted or due u/s 192(1B) (with challan Upto 30 th April Within 7 days from last date of month in which income tax is due u/s 192(1B) Within 7 days from the last date of the month in which tax deduction is made. With the prior approval of the Joint Commissioner, The A.O. may permit to deposit the tax quarterly. [applicable only in case TDS u/s 192, 194A, 194D and 194H Then First, Second and Third quarter 7 th of next month Fourth quarter 30th April 2. Furnishing Quarterly Statement: [200(3)] a. the following persons are responsible for preparing such statements for such period as may be prescribed, after paying the tax deducted to the credit of the C.G. within the prescribed time. any person deducting any sum; or, any person being an employer referred to in section 192(1A). b. Such statements have to be delivered or caused to be delivered to the prescribed income-tax authority or the person authorised by such authority in the prescribed form and verified in the prescribed manner, within prescribed time. ~ 11 ~

12 i. Prescribed form for quarterly statement: 24Q for section 192, 26Q for other. ii. Time limit: 1 st quarter: 15-july, 2 nd quarter: 15-october, 3 rd quarter: 15-january and 4 th quarter: 15 May. c. Penalty for not submitting quarterly statement: Rs100 per day of continuing default would be attracted under section 272A for failure to deliver or cause to be delivered within the prescribed time a copy of the statements as required above. 3. Certificate for tax deducted [Section 203] a. Every person deducting tax at source shall, within such prescribed time, furnish to the payer, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed. b. Every person, being an employer, referred to in section 192(1A) shall, within such period, as may be prescribed, furnish to the person in respect of whose income such tax has been paid, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed. c. Prescribed form for TDS certificate: i. For section 192: form BA if the salary exceeds Rs , otherwise form 16AA. ii. For other cases: form 16A d. Time limits for furnishing TDS certificate: i. U/s 192: by 31 st May after the end of P.Y. ii. iii. Other: within 15 days from due date of filing return On request of payee, consolidated certificate can be furnished within one month from the end of P.Y. e. However, where tax has been deducted or paid on or after , there is no requirement to furnish such certificate. f. the prescribed income tax authority or the authorized agency, shall within the prescribed time after the end of each F.Y. beginning on or after prepare and deliver to every person from whose income the tax has been deducted, a statement in the prescribed form specifying the amount of tax deducted during the F.Y. [section 203AA] 4. Person responsible for paying taxes deducted at source [Section 204]: S. No. Nature of income/ payment Person responsible for paying tax 1. Salary (other than payment of salaries by Government) (i) the employer himself; or (ii) if the employer is a company, the company itself, including the principal officer thereof. 2. Interest on securities (other than payments by the local authority, corporation or company, or on behalf of Government) 3. Any sum payable to a non-resident Indian, representing consideration for the transfer by him of any foreign exchange asset, which is not a short term capital asset 4. Credit/payment of any other sum chargeable under the provisions of the Act including the principal officer thereof. the authorised dealer responsible for remitting such sum to the non-resident Indian or for crediting such sum to his Non-resident (External) Account maintained in accordance with the Foreign Exchange Regulation Act, 1973 and any rules made thereunder. (i) the payer himself; or (ii) if the payer is a company, the company itself including the principal officer thereof. E. Miscellaneous 1. Consequences of failure to deduct or pay [Section 201] a. The person liable to deduct tax [or employer referred to in section 192(1A)] shall be deemed to be an assessee in default if he:- does not deduct the whole or any part of the tax; or after deducting fails to pay the tax. - Consequently he shall be liable to pay penalty u/s 221 for being an assessee in default. ~ 12 ~

13 b. However, no penalty shall be charged under section 221 from such person unless the A.O. is satisfied that such person has failed to deduct and pay the tax without good and sufficient reasons. c. Such person shall also be liable to pay simple interest 1% 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 actually deducted, and 1.5% for every month or part of a month 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. d. Such interest should be paid before furnishing the statements in accordance with section 200(3). e. Where the tax has not been paid after it is deducted, the amount of the tax together with the amount of simple interest thereon shall be a charge upon all the assets of the person f. Time limit for deeming the assessee to be in default: i. where the statement referred to in section 200 has been filed: 2 years from the end of the F.Y. in which the statement is filed:; ii. any other case: 4 years from the end of the F.Y. in which payment is made or credit is given. Note: such order for a F.Y. upto may be passed at any time on or before g. The provisions of section 153(3)(ii) and Explanation 1 to section 153 shall, so far as may, apply to the time limit prescribed in this section. 2. Common number for TDS and TCS [Section 203A] a. persons responsible for TDS or TCS should apply to the A.O. for the allotment of a taxdeduction and collection-account number (TAN). b. such TAN has to be compulsorily quoted on the following documents etc. (i) challans for payment of any sum in accordance with the section 200 or 206C(3); (ii) certificates furnished u/s 203 or section 206C(5); (iii) statements prepared and delivered or caused to be delivered in accordance with the section 200(3) or 206C(3). (iv) returns delivered in accordance with the provisions of section 206 or section 206C(5A)/(5B); and (v) in all other documents pertaining to such transactions as may be prescribed in the interests of revenue. 3. Furnishing of statements in respect of payment of interest to residents without deduction of tax [Section 206A] (1) every banking company or co-operative society or public company who is liable to deducte tax at source u/s 194A is liable to prepare such statements for such period as may be prescribed if they are responsible for paying to a resident, the payment should be of any income not exceeding Rs.10,000, where the payer is a banking company or a co-operative society, and Rs.5,000 in any other case. such income should be by way of interest (other than interest on securities) (2) The statements have to be delivered or caused to be delivered to the prescribed income-tax authority or the person authorised by such authority. (3) The statements have to be in the prescribed form, verified in the prescribed manner and to be filed within the prescribed time, on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media. (4) The Central Government may, by notification in the Official Gazette, cast responsibility on any person other than a person mentioned in (1) above. 4. Mandatory requirement of furnishing PAN [Section 206AA] the person whose receipts are subject to TDS (deductee), shall mandatorily furnish his PAN to the deductor, otherwise tax shall be deducted at the specified rates or 20% whichever is higher. Invalid PAN shall be deemed PAN not furnished Both the deductor and the deductee have to compulsorily quote the PAN of the deductee in all correspondence, bills, vouchers and other documents exchanged between them. ~ 13 ~

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