Tds 3c173j

TAX DEDUCTED AT SOURCE

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INDEX

 Introduction  Payments covered under the scheme of TDS.  Provisions for filing Returns to the Income Tax Department.  Effects of Tax Evasion

Introduction To avoid cases of tax evasion, the Income-Tax Act has made provisions to collect tax at source on accrual of income. Cases included in the scheme are, generally, those where income can be computed at the time of accrual of income. Under this scheme, persons responsible for making payment of income covered by the scheme are responsible to deduct tax at source and deposit the same to the Government’s treasury within the stipulated time. The recipient of income—though he gets only the net amount (after deduction of tax at source)—is liable to tax on the gross amount and the amount deducted at source is adjusted against his final tax liability. The details of the scheme of tax deduction and collection at source are briefly discussed in this presentation. To conclude one can say that the scheme of TDS is only payment of tax on adhoc basis by the payer of income on behalf of recipient.

Steps for TDS

TAN • Every deductor is required to obtain a unique identification number called TAN (Tax Deduction Number) which is a ten digit alpha numeric number. This number has to be quoted by the deductor in every correspondence related to TDS

Tax Deduction & Collection Number

Every person deducting tax or collecting tax should obtain a tax deduction & collection number Such person should quote such number in every challan for payment u/s 200 or 206C(3), in every certificate furnished u/s 203 or u/s 206C(5) In all the TDS returns delivered In all other documents pertaining to such transaction as may be prescribed in the interest of revenue.

Payment covered under the scheme of TDS.  Salary (Sec.192)

 Interest on Securities (Sec.193)  Dividends (Sec.194)

Interest other than Interest on Securities (Sec.194A) 

 Winnings from Lotteries or crossword puzzles (Sec.194B)  Winnings from Horse Races (Sec.194BB)

Payments to Contractors and Sub-contractors (Sec.194C) 

 Insurance Commission (Sec.194D)  Payment to Non-resident sportsmen or sports association (Sec.194E)  Payment in respect of NSC (Sec. 194EE)

Contd…

Payment covered under the scheme of TDS.  Payments in respect of Repurchase of units of Mutual Funds or UTI (Sec.194F)

 Commission on Sale of Lottery Tickets (Sec.194G) 

Commission or Brokerage (Sec.194H)

 Rent (Sec.194I) Fees for Professional or Technical Services (Sec.194J) 

 Payment of Compensation on acquisition of certain immovable property (Sec.194LA)

 Other Sums (Sec.195)  Long term capital gain (Sec.196B)  Income or Long term capital gain from Foreign Currency bonds/Global Depository Receipts (Sec.196C)

Contd…  Income of Foreign Institutional Investors from Securities (Sec.196D)

INTEREST OTHER THAN INTEREST ON SECURITIES (Sec 194A) Who is the payer

Any person paying interest other than interest on securities

Who is the recipient

A Resident person

Payment covered

Interest other than interest on securities

At what time TDS to be deducted.

At the time of payment or at the time of credit, whichever is earlier

Maximum amount which can be paid without tax deduction

If payer is banking company, co-operative engaged in banking business or Rs 10000/- if Payer is any other person Rs 5000/-

Rate at which TDS to be deducted

10% if the recipient is resident non-corporate assessee and 20% if the recipient is resident corporate assessee

When the provisions are not applicable

If the payee are Insurance companies or financial institutions including co-operative societies etc.

Is it possible to get the payment without tax deduction or with lower tax deduction

Declaration to the payer in Form 15G or 15H as applicable

Payments to Contractors And Sub-contractors (Sec.194C) Who is the payer

Specified person

Who is the recipient

A resident person

Rate of TDS

2%

Payment Covered

Consideration for any Work Contract

At what time TDS has to be deducted

At the time of payment or at the time of credit

Maximum amount which can be paid without tax deduction

The tax is required to be deducted if a single payment exceeds Rs. 30000/- or if the aggregate payments exceed Rs. 75000/per annum

Is it possible to get the payment without tax deduction or with lower tax deduction

The recipient can make application to the Assessing Officer in Form No. 13

Commission or Brokerage (Sec.194H) Who is the payer

Any person paying commission or brokerage

Who is the recipient

Any resident person

Payment covered

Commission or brokerage (not being insurance commission)

At what time TDS to be deducted.

At the time of payment or at the time of credit, whichever is earlier

Maximum amount which can be paid without tax deduction

If the amount of payment is Rs. 5000 or less than Rs. 5000

Rate at which TDS to be deducted

10% (up to may 31, 2007 : 5%)

When the provisions are not applicable

--

Is it possible to get the payment without tax deduction or with lower tax deduction

The recipient can make an application in Form No.13 to the Assessing Officer to get a certificate of lower tax deduction or no tax deduction

Rent (Sec.194-I) Who is the payer

Any person paying rent (not being an individual or HUF whose books of are not required to be audited under section 44AB in the immediately preceding financial year)

Who is the recipient

A Resident Person

Payment covered

Rent

At what time TDS to be deducted.

At the time of payment or at the time of credit, whichever is earlier

Maximum amount which can be paid without tax deduction

Rs. 180000/-

Rate at which TDS to be deducted

For Plant and Machinary Rent 2% and for For Use of and Land or Building including Furniture etc. Individual Huf 10% For any other 20%

Is it possible to get the payment without tax deduction or with lower tax deduction

The recipient can make application in Form No. 13

Fees for Professional or Technical Services (Sec.194J) Who is the payer

Any person paying professional charges (not being an individual or HUF whose books of are not required to be audited under section 44AB in the immediately preceding financial year)

Who is the recipient

Any Person

Payment covered

Professional services, technical services, Royalty,

At what time TDS to be deducted.

At the time of payment or at the time of credit, whichever is earlier

Maximum amount which can be paid without tax deduction

If the amount of payment during the financial year is Rs. 30000 or less than Rs. 30000

Rate at which TDS to be deducted

10%

Is it possible to get the payment without tax deduction or with lower tax deduction

The recipient can make application in Form No. 13

Provisions for Filing Returns

Different Payments

In case the person deducting tax is a company or a Government department or a person whose books are required to be audited u/s. 44AB in the immediately preceding year or in whose case number of deductees in any of the quarterly statements in the immediately year is 20 or more

In case the person deducting tax is any other person

Time-limit for submission of return by the person deducting tax

Salary

Form No. 24Q in Electronic format and Form No. 27A

Form No. 24Q

Within 15 days from the end of each quarter (31st May in case of last quarter)

Payment (other than salary) to a resident

Form No. 26Q in Electronic format and Form No. 27A

Form No. 26Q

Within 15 days from the end of each quarter (31st May in case of last quarter)

Payment (other than salary) to a non-resident

Form No. 27Q in Electronic format and Form No. 27A (quarterly)

Form No. 27Q (quarterly)

Within 15 days from the end of each quarter (31st May in case of last quarter)

Issue TDS Certificates Sec. 203

Sr. No.

Form no

Periodicity Cut off Date

1

16 For Salary

Annual

2

16A Other Quarterly than salary

31st May of following financial year Within 15 days from due date of furnishing the TDS statement under rule 31A

Dates for Payment of TDS

Deductor

For MARCH

For April to February

Government On or before 7th of next month for salary

On the same day for other than salary & on or before 7th of next month for salary

Other than On or before 30th Government April

On or before 7th of next month

Special Cases

30th April

Quarterly payment on or before 7th of the month succeeding quarter

Questions? 17

Thank You!

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