Applicable from Assessment Year

Transcription

1 Recent Developments on TDS.

2 Section 40(a)(ia) No disallowance shall be made, if, after deduction of tax during the previous year, the same is paid by due date of filing return of income. In line with Section 43B. Applicable from Assessment Year /03/2011 Sanghvi Sanghvi & Sanghvi 2

3 Whether can be applied from Assessment Year ? CIT vs. Gold Coin Health Foods Pvt. Ltd. 304 ITR 308(SC) CIT vs. Alom Exclusive Ltd. 319 ITR 306 (SC) Sedco Forex International 279 ITR 310 (SC) Bapusaheb Nanasaheb Dhumal vs. CIT ITANo.6628/mum/ /mum/2009 / 2009.Dt. 25/06 06/ Golden Stables Lifestyle Centre P. Ltd. ITANo.5145/mum/ /mum/2009 / Dt.30/09 09/ /03/2011 Sanghvi Sanghvi & Sanghvi 3

4 Issues Section 40(a)(i) ) and 40(a) (ia) Tax not deducted but paid out of own pocket. Tax paid in response to notice u/s 201(1). Payee has shown Income and paid tax accordingly, whether payer required to deduct tax? Tax not deducted on expense claimed u/s 57 19/03/2011 Sanghvi Sanghvi & Sanghvi 4

5 Issues Whetherh Pro-rata dd deduction allowed? For wrong Section No Surcharge and/or education cess calculated on dd deduction Deduction made on certain payments and not entire payments 19/03/2011 Sanghvi Sanghvi & Sanghvi 5

6 Issues Payment on Capital Account Interest paid to Partner (Non-Resident) Form No. 15H/G received but filed after due date of filing. Provision for expense made, but payee not known. Expenses not debited to profit & loss account 19/03/2011 Sanghvi Sanghvi & Sanghvi 6

7 CREDIT OF T.D.S. New Rule 37BA inserted w. e. f. 01/04/2009 vide notification No.28 dt Rule for allowing credit for TDS for the purpose of section 199. Conditions: On the basis of information of tax deducted furnished by the deductor. Information in Return of Income. Credit will be given for the Assessment Year for which such income is assessable. 19/03/2011 Sanghvi Sanghvi & Sanghvi 7

8 Rules 30,31,31A and 31AA Income Tax (6 th Amendment) Rules,2010 Notification Dated 31/05/2010 With effect from 1 st day of April, 2010 on Tax deducted on and after 1 st day of April, If deduction is made in the month of March, tax to be paid by 30 th April. All Companies and person to whom provisions of section 44AB are applicable TDS payments to be remitted electronically. Electronic remittance defined as, payment of taxes by way of Internet Banking facility, or Debit card Form No. 16AA - Scrapped 19/03/2011 Sanghvi Sanghvi & Sanghvi 8

9 Certificate in Form No. 16 and 16A shall specify. Valid PAN of the deductee. Valid TAN of the deductor CIN (Challan identification Number) Receipt number of relevant quarterly statement. Dates of issue of certificates. Form No Annual By 31 st May Form No. 16A Quarterly Within 15 days from the date of furnishing Quarterly Statement Quarterly Statements to be furnished as under: I Quarter - 15 th July II Quarter - 15 th October III Quarter - 15 th January IV Quarter - 15 th May 19/03/2011 Sanghvi Sanghvi & Sanghvi 9

10 Section 200(A) Amendments effective from 01/04/2010 Processing of Statements of tax deducted at source Following adjustments can be made during the processing of Statements: i) any arithmetical error in the statement or ii) an incorrect claim, apparent from any information in the statement. Incorrect claim is defined as : i) an item, which is inconsistent with another entry. ii) in respect of rate or deduction of tax at source. Time limit: No intimation shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. 19/03/2011 Sanghvi Sanghvi & Sanghvi 10

11 Section 201(3) Amendments effective from 01/04/2010 Time limit for passing an order for holding a person to be an assessee in df default. No order shall be made after the expiry of:- a. Two years from the end of the financial year in which the TDS statement is filed. b. Four years from the end of the financial i year in which payment is made or credit is given. 19/03/2011 Sanghvi Sanghvi & Sanghvi 11

12 No time limit shall apply to Amendments effective from 01/04/2010 Where the deductor has deducted tax but not deposited. Where the employer has failed to pay the tax wholly or partly under section 192 (1A) Where the deductee is a non-resident 19/03/2011 Sanghvi Sanghvi & Sanghvi 12

13 Reimbursement of Expenses Tax and duty Security, Maintenance Charges, etc. Other Expenses 19/03/2011 Sanghvi Sanghvi & Sanghvi 13

14 Section 194I: Rent Scope after amendment by Taxation laws (Amendment) Act, 2006 w. e. f Whether following payments are covered: Cold Storage Car/Bus/Aircraft /Ai Ship C & F agent, Goods Stored in Warehouse Payment to Hotel Business Service Centre 19/03/2011 Sanghvi Sanghvi & Sanghvi 14

15 Section 194J Fees for professional or technical services Payment made to electrician Payment made for writing Accounts Payment of transaction charges, VSAT charges, etc. paid by Stock broker to Bombay Stock Exchange and National Stock Exchange. 19/03/2011 Sanghvi Sanghvi & Sanghvi 15

16 Section 194H: Commission or brokerage Distinction between Commission & Discount Explanation is not wide enough to cover any payment received in course of buying and selling of goods. Ahemdabad d Stamp Vendor 257 ITR 202 (Guj.) j) Kerala Stamp Vendor 150 Taxman 30 (Ker.) Target discounts and incentives to distributors and dealers. National Panasonic India Pvt. Ltd. 94 TTJ 899 (2005) (Del) Supplementary Commission and Concessional air tickets to travel agents Singapore Airline Ltd. 22 DTR 269 (2009) ( Del) 19/03/2011 Sanghvi Sanghvi & Sanghvi 16

17 Section 194H: Commission or brokerage Sale of goods at fixed margins and the activity is under the direct supervision and control of the manufacturer. Hindustan Coco Cola Beverages Pvt. Ltd. 98 TTJ I (Jp) Contract of sales Vs. Contract of agency. Title and property passes on to the buyer / distributor on the delivery of goods. Fosters India Pvt. Ltd. 117 TTJ 346 (2008) (Pune) Distribution / Sale of SIM card and recharge coupons (prepaid). Principal to principal or Principal to agent. Vodafone Essar Cellular Ltd. 35 DTR 393 (Cochin) Idea Cellular Ltd. 29 DTR 237 (2009) (Hyd) Idea Cellular Ltd. 230 CTR 43 (2010) (Del) Bharti Cellular Ltd. 294 ITR 283 (2007) (Kol) 19/03/2011 Sanghvi Sanghvi & Sanghvi 17

18 Section 194C Payment to Contractors t Meaning of the words any work Not restricted to works contract, therefore has wide import and covers any work.associated Cements Co. Ltd. vs. CIT 201 ITR 435(SC) Any work does not mean professional services are also included. CITC vs. CBDT 209 ITR 660 (Bom) Any work has wider imports after the Supreme Courts decision, however, it is not unqualifyingly wide to cover each and every work. East India Hotels Ltd. vs. CBDT 223 CTR 133 (Bom) Work is different from service. In work, the activity is predominantly physical, it is tangible. In service, activity is predominantly intellectual or at least mental. S.R.F. Finance Ltd. vs. CBDT 211 ITR 861 (Del) 19/03/2011 Sanghvi Sanghvi & Sanghvi 18

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