mssv & co, bangalore 1 is tds tedious ?. mssv & co, bangalore 2 overview of tds provisions...
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MSSV & Co, Bangalore
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IS TDS
TEDIOUS ?
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MSSV & Co, Bangalore
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Overview of TDS
Provisions
CA. D.R. VenkateshB.Com, LLB, FCAPartner, MSSV & CoBengaluru
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MSSV & Co, Bangalore
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ISSUES
Latest
Practical
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MSSV & Co, Bangalore
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Issues - Latest
Circulars / Notifications
Finance Act, 2009
Finance Act, 2010
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CIRCULAR / NOTIFICATIONS
S.o. 1261(E) dated 31st May, 2010
Income Tax (6th Amendment)
Rules, 2010
w.e.f 1st Day of April, 2010
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Rule 30 – Time and Mode of Payment
Without Challan – Same Day
With Challan – on or before seven days
from the end of the month
in which the deduction is
made
DEDUCTOR - GOVERNMENT
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Last month of the year – on or before 30th day of April where the income or amount is credited or paid in the month of March
During the year – on or before seven days from the end of the month in which the deduction is made
DEDUCTOR - OTHERS
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SPECIAL PERMISSION
Prior approval of the Joint Commissioner
Permit quarterly payment
Salary - under section 192
Interest - under section 194A
Insurance Commission - under section 194D
Commission or Brokerage - under section
194H
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Quarter ended Due date
30th June 7th July
30th September 7th October
31st December 7th January
31st March 30th April
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E – Payment
Rule 125 - w.e.f 01.04.2008
Circular 5/2008 - dated 14.7.2008
a company and
a person (other than a company) to whom the
provisions of Sec 44AB are applicable
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Deductor – Government
without challan remittance
Submit statement in Form No. 24G within 10
days from the end of the month to the Agency
authorised by the Director General of Income
Tax (Systems)
Intimate the BIN generated by the agency to
each of the deductors
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Form No. 16 – Salary Form No. 16A – other than Salary Specify
Valid PAN of the Deductee Valid TAN of the Deductor
BIN - CIN
Receipt number of the relevant Quarterly Statement
CERTIFICATE
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Time Specified
Form No. Periodicity Due Date16 Annual By 31st day of May
16A Quarterly Within 15 days from the
due date for furnishing the
statement – Form 26Q
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Quarterly Returns
Statement of Deduction of Tax
Form No. 24Q - Salary
Form No. 26Q - All other deductees
Form No. 27Q - Deductees – Non-
Resident
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Time Schedule
Date of ending of the Due DateQuarter of the F.Y
30th June 15th July
30th September 15th October
31st December 15th January
31st March 15th May
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Furnishing the statement electronically
the deductor is an office of the Government or
the deductor is the Principal Officer of a Company or
the deductor is a person who is required to get his
accounts audited u / s 44AB in the immediately
preceding Financial Year or
the number of deductee’s records in the statement for
any quarter of the Financial Year are twenty or more
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CIRCULAR / NOTOFICATIONS
Notification No. 28/2009 Income Tax (Sixth Amendment) Rules, 2009 w.e.f April 1, 2009 New Rule 37BA, 37I Credit for tax deducted at source for the purpose
of Sec 199 (3) On the basis of information relating to deduction
of tax furnished by the deductor to the income tax authority or the person authorized by such
authority
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ANNUAL TAX STATEMENT
Form No. 26AS Section 203AA Rule 37AB Statement issued on behalf of Income Tax
Department Details of tax indicated based on the data
submitted by the deductor Due date for sending this statement is July 31st
of every year
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Form 26AS consists of:
General Information
Part A : Details of TDS
Part B : Details of TCS
Part C : Details of Tax paid (other
than TDS/ TCS)
Details of Refund granted
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U / s 194C (3) where any sum paid or credited for carrying
out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be
deducted at source on the invoice value excluding the value of
material, if such value mentioned
Finance Act, 2009
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on the whole of invoice value, if the value of material is not mentioned separately in the invoice
“work” shall include – (e) manufacturing or supply of product according to the requirement or specification of the customer by using the material purchased from such customer
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Finance Act, 2009
Section – 194C (6) w.e.f 01.10.2009
No TDS
During the course of business of plying, hiring or
leasing the goods carriage on furnishing his
PAN to the person paying or crediting such sum
Section – 194C (7)
- Prescribed Form
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NEW SECTION 206AA
With effect from 1st April, 2010
Requirement to furnish PAN
206AA (1)
Any person entitled to receive any sum or income
or amount, on which tax is deductible under
chapter XVII-B (deductee) shall furnish his PAN to
deductor, failing which tax shall be deducted
at the higher of the following rates, namely:
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(i) At the rate specified in the relevant provisions of this
Act or
(ii) At the rate or rates in force or
(iii) At the rate of 20%
Section 206AA (2)
No declaration u /s 197A(1), 197A(1A) & 197A(1C)
shall be valid unless the person furnishes his PAN in
such declaration (Form 15G & 15H)
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Sub Section (3)
in case any declaration becomes invalid U/s
206AA (2), the deductor shall deduct TDS in
accordance with provisions of Sec 206AA (1)
Sub Section (4)
no certificate u /s 197 shall be granted
unless the application made under that section
contains the PAN of the applicant
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Sub Section (5)
the deductee shall furnish his PAN to the deductor and
both shall indicate the same in all correspondences, bills,
vouchers and other documents which are sent to each other
Sub Section (6)
where PAN provided to the deductor is invalid or does not
belong to the deductee, it shall be deemed that the
deductee has not furnished his PAN to the deductor and
the provision of Sec 206AA (1) shall apply accordingly
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FINANCE ACT, 2010
Threshold limit w.e.f 1st July, 2010
Section Earlier (Rs.) New (Rs.)194B 5,000 10,000194BB 2,500 5,000194C 20,000 30,000
50,000 75,000194D 5,000 20,000194H 2,500 5,000194I 1,20,000 1,80,000194J 20,000 30,000
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FINANCE ACT, 2010
Interest u /s 201 – w.e.f: 01.07.2010 at 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
deducted; and
At 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
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Amendment to Section 40(a)(ia)
(ia) …………… has not been paid on or
before the due date specified in Sub
Section (1) of Section 139
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ISSUES - GENERAL
Rent paid for the months of April 2010 to June
2010 to owner ‘A’ is Rs. 14,500/- p.m.
Total rent payable during the F.Y 2010-11 is Rs.
1,74,000/-
Whether TDS is to be made u / s 194I for rent for
the months of April 2010, May 2010 and June
2010
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ISSUES - GENERAL
Threshold limit computation– whether to include Service Tax?
u / s194J u / s 194I
Fee Rs. 27,500 Rent Rs. 1,65,000
ST Rs. 2,833 ST Rs. 16,995
Rs. 30,333 Rs. 1,81,995
Audit Fee of Rs. 25,000 for the year ended 31.03.2010 provided & deducted in the month of September, 2010
- Whether TDS is required u /s 194J?
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ISSUES - GENERAL
The entries in the books of accounts for MIS
purposes.
- Examine the applicability of
Chapter XVII - B
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ISSUES - GENERAL
Excess / Short Dedcution
Excess / Short Remittance – Adjustment
- Within the quarter
- Within the financial year
Refund of Excess tax remitted
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ISSUES - GENERAL
Defaults
o Non deduction
o Short deduction
o Non Remittance
o Short Remittance
o Delay in Remittance
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ISSUES - GENERAL
Consequences
o Interest
o Penalty
o Prosecution
o Amount not deductible
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ISSUES - GENERAL
Disallowance u /s 40 (a) (ia) & Form No 3CD
o In the case of
non deduction
short deduction
non remittance
short remittance
delay in remittance
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ISSUES - GENERAL
M/s X Private Limited paid statutory audit fee
of Rs. 1,00,000/- in cash during the
accounting year 2009-2010 without
deduction of tax at source
For assessment year 2010-11, examine the
disallowance u / s 40(a)(ia) and u /s 40A(3)
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ISSUES - SPECIFIC
Following payments made by Partnership Firm to its Partners:
– Salary Rs. 10 Lakhs to each partner
– Interest of Rs. 5 Lakhs on Capital contribution to one of the
partner who is non-resident during the year
– Commission of Rs. 10 Lakhs paid to partners on percentage of
Export Sales
– Rent of Rs. 15 Lakhs paid to one of the partner
Examine the applicability of provisions of Chapter XVII-B
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ISSUES - GENERAL
U / s 194H
o Discount
o Rebate
o Incentive
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ISSUES - SPECIFIC
U / s 194I – Rent
o Advance Rent of Rs. 8 Lakhs paid for next 5 Financial Years on 30.06.2010
o Rent of Rs. 8 Lakhs paid to 5 co-owners
o Warehousing Charges
o Cooling Charges paid to cold storage owners
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ISSUES - SPECIFIC
M/s King Fisher Airlines paid landing fee and
parking fee of Rs. 10 Crores to Airport
Authorities during the accounting year 2010-11.
M/s King Fisher Airlines proposes to deduct tax
at source:
– 194 C or 194I?
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ISSUES - SPECIFIC
Tenants in a commercial complex following
payments are made to the owner:
– Rent
– Maintenance Charges
– Power & Water Charges re-imbursements
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ISSUES - SPECIFIC
M/s Specialty Hospital Private Limited makes
payment to consulting doctors by collecting
amount from patients. It retains 20% of the fee
collected as its service charges and pays the
balance 80% to the consulting doctors
– TDS u /s 192 or 194J?
– TDS on 80% or 100%?
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DIRECT TAXES CODE, 2010
TDS Provisions
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CHAPTER XIII
Collection and Recovery of Tax
A – Deduction of Tax at Source
(Section 193 – 201)
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Section 195
Liability to Deduct tax at source
Section 195(1):– Specified Payment– At the time of Payment– At the appropriate rate
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Section 195(2) & (3):
Specified payment (Column 2)
Third Schedule, if the deductee is a
resident
Fourth Schedule, if the deductee is a
non-resident
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Section 195(5):
Deductee has failed to furnish his PAN
Higher of the following
(a) 20% or
(b) The rate specified in Sub-section
(2),(3) or (4) of Section 195
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SECTION 200
No deduction of tax in certain cases19 cases Individual or a HUF is not liable to audit
of accounts u / s 88 for the financial year immediately preceding the financial year in which the payment is made
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CONCLUSION
Duty / Responsibility under chapter XVII – B
cannot be bypassed by the deductor to any
person
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CONCLUSION
Method of Accounting
o Cash Basiso Mercantile Basiso Compliance Basis
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CONCLUSION
GOLDEN PRINCIPLES
Applicability Rate Deduction & Remittance Planning
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Finally
Deduct and Remit Without failure
Avoid – interest, penalty, prosecution and disallowance
With due care
File TDS returns & issue the forms
Within time
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Then…
TDS IS NOT
TEDIOUS
TO DEDUCTOR
TO DEDUCTEE
TO DEPARTMENT
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THANK YOU