PRESENTATION ON TDS OTHER THAN SALARIES UNDER INCOME TAX ACT AND RELATED ISSUES

Transcription

1 PRESENTATION ON TDS OTHER THAN SALARIES UNDER INCOME TAX ACT AND RELATED ISSUES Presented by CA Manoj D. Chandak Malani Somani Chandak & Associates Chartered Accountants

2 TDS OVERVIEW Persons responsible for making payment of income covered by the scheme of tax deduction are required to deduct tax at source at the prescribed rate. Tax so deducted should be deposited within the prescribed time. Moreover, return of tax deduction at source i.e. quarterly statement should be submitted within the specified time. Form No. 16A for Tax Deducted at Source should be issued within prescribed time. 2

3 Consequences of Default Assessee deemed to be an assessee in default if any person who is responsible to deduct and after deduction to pay tax, failed to do so is deemed to be an assessee in default in respect of the tax. Interest under section 201(1A): 1% per month or part of the month from the date on which tax was deductible to the date of deduction. 1.5% per month or part of the month from the date of deduction to the date of payment. Disallowance of certain expenditure under section 40(a) 3

4 Consequences of Default Penalty under section 221 Up to the amount of TDS. Attachment and sale of Movable & Immovable property. Arrest of the Assesses and his detention in prison. Penalty under section 272A(2)(k) (up to 30/06/2012) Rs.100/- per day or to the amount of TDS whichever is less. Penalty under section 271H (w.e.f. 01/07/2012) Min. Rs or Max. Rs.1,00,000/-if a person fails to submit quarterly TDS/TCS return on or before the due date or if a person furnishes incorrect information in these quarterly returns. Late Filling Fee u/s 234E (w.e.f. 01/07/2012) Rs.200/- for every day during which the failure continues or to the amount of TDS whichever is less. This fees will be in addition to other consequences under the 4 Act.

5 TDS PROVISIONS IN BRIEF Section of Nature of expenditure / payment I.T Act 192 Salaries A 194D 194DA 194B Interest on Securities Other Interest Insurance Commission Payment in respect of Life Insurance Policy Winning from Lottery / Crossword puzzle / Card games / Other games Rate of TDS Average rate 10% 2% 30% 5

6 TDS PROVISIONS IN BRIEF Section of Nature of expenditure / payment Rate of I.T Act TDS 194C Payments to contractors (including advance payments) a)contractors who are individuals or HUF 1% b)other Contractors 2% 194H Commission or Brokerage 10% 194I Rent a)plant, Machinery or Equipment b)land, Building or Furniture 2% 10% 6

7 TDS PROVISIONS IN BRIEF Section of I.T Act Nature of expenditure / payment 194J Fees for Professional / Technical services / Royalty and other sums referred to in Sec. 28(v)(a) Rate of TDS 10% 194LA Compensation for Compulsory Acquisition of Immovable Property 10% 194IA TDS on Sale of Property 1% 7

8 194A - Interest other than interest on securities If the interest in the financial year exceeds Rs.5,000/where the payer is any other person. If payer is Banking Company or Co-operative Society or Post office and interest is payable on time deposit/ notified deposit scheme with post office, the said limit is Rs. 10,000/- for TDS. 10% Income Tax to be deducted at the time of credit or payment whichever is earlier. Form No. 16A to be issued within 15 days from the due date of filling of TDS return. 8

9 194C - TDS on Contractors Contract Includes Work Contracts Where, Work includes: Advertising and telecasting including production of Broadcasting programmes for broadcasting and telecasting Carriage of goods and passengers by any mode other than railways Catering Manufacturing or supplying a product according to the requirement or specification of a customer, by using material purchased from the customer (Job Work) 9

10 194C - TDS on Contractors Rates: If recipient is an Individual or HUF, 1%. In all other cases, 2% If recipient is a transport contractor and he furnishes his PAN to the payer, TDS rate is NIL other wise TDS is to be 20%, but Should File TDS Return. In Amount Column write Total Amount Paid and in TDS Deducted Column write TDS Deducted Amount (If Deducted) or Write 0.00 (if not deducted, but please Select T as Reason for Non-Deduction) Tax is not required to be deducted if any single sum credited or paid does not exceed Rs /- or aggregate of such sums does not exceed Rs /- in a year 10

11 194C - TDS on Contractors Reimbursement of expenses: The term A u refers to the Gross Amount paid under the contract. Hence, reimbursement of expenses would also attract TDS. If separate bill is given for reimbursement of expenses then no TDS is applicable. Since section 194C refers to any sum paid, TDS will be attracted on the service tax portion also. 11

12 194C - TDS on Contractors Advertising contracts: A person makes payment to an advertisement agency. The agency makes payments to its artists and the media. Payment to agency 1% u/s 194C Payment to artists 10% u/s 194J Payment to Doordarshan is not liable to TDS as it is a government agency. 12

13 194H- Commission or Brokerage At the time of credit or payment whichever is earlier when aggregate sums credited / paid during the financial year exceeds Rs.5000/-. At the rate of 10% 13

14 194 I - Rent At the time of credit or payment whichever is earlier when the aggregate sums credited/paid during the financial year exceeds Rs. 1,80,000/ Rate 10% for Land or Building Rate 2% for others As per circular no. 4/2008 dated 28th April 2008, TDS is not required to be deducted on service tax charged on Rent. 14

15 194 J - Fees for Professional or Technical Services/ Royalty At the time of credit or payment whichever is earlier when the aggregate sums credited/paid exceeds Rs. 30,000/-. At the rate of 10% as TDS As per circular no. 1/2014 dated 13th Jan 2014, TDS is not required to be deducted on service tax charged on Professional and Technical fees if. 15

16 Section 194 LA- Compensation for acquisition of immovable property Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or 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), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon: 16

17 Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed Two hundred thousand rupees. -If Aggregate amount of consideration exceeds Rs. 2,00,000/-TDS Rate 10% Agricultural La d Means agricultural land in India including land situated in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; Section 2(14) (iii) : Agricultural land in India, not being land situate (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand or 17

18 (b) in any area within the distance, measured aerially, (I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. 18

19 194IA - TDS on Sale of Property As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property exceeds or is equal to 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration. 19

20 TD a ou t as per For 26QB should e e tered i the field Basic Tax I o e Ta o the Ba k s e -portal. TDS certificate (Form 16B) will be based on Basic Tax (I co e Tax) only. Taxpayer/ Buyer are advised to save the Acknowledgement Number for downloading the Form 16B from TRACES website. TDS certificate (Form 16B) will be available for download from the TRACES website after at least 2 days of deposit of tax amount at the respective Bank. Click on View Acknowledgment Number under TDS on Property by providing the relevant details for retrieving the Acknowledgment Number. 20

21 Deduction & Payment of TDS Cases where tax is not deductible or deductible at lower case Apply in Form No.13 for no deduction/collection of tax or deduction/ collection of tax at a lower rate. Form No. 15G to be made by an individual or a person (not being a company or a firm) claiming certain receipts without deduction of tax. 21

22 Deduction & Payment of TDS Cases where tax is not deductible or deductible at lower case Form No. 15H to be made by an individual who is of the age of sixty years or more claiming certain receipts without deduction of tax. 22

23 Deduction & Payment of TDS In relation to Salary payments, TDS has to be done on payment basis. In case of Other Payments, TDS has to be done at the time of credit to the account of the payee or actual payment, whichever is earlier. Where PAN of the deductee is not quoted or wrongly quoted, TDS has to be made at 20% or applicable rate, whichever is higher. TDS is to be paid on the date of deduction when Government Officer pays through Book entry. TDS has to be paid by 7th of the following month (by 30th April in case the amount is credited or paid in the month of March). 23

24 Due Date for e-return and Form Number Quarterly e-tds returns have to be filed as per due dates. For the quarter ended March, Returns can be filed upto May 15th,of the succeeding F.Y. For all other quarters, returns have to be filed within 15 days from end of the quarter. For Government deductor additional 15 days are given from such due dates. In case of Salary - FORM 24Q, In case of Other Payments - FORM 26Q In case of TCS, FORM 27EQ has to be filed. 24

25 Issue of TDS Certificate For salary-form No.16 to be issued annually on or before May 31 of the financial year. For non salary-form No.16A to be issued quarterly. Deductor issuing TDS certificates in form no. 16 or 16A by downloading from the TIN-NSDL website, shall authenticate these by either using digital signature or manual signature. 25

26 CA Certificate CA certificates to be obtained by TDS Deductors in Form 26A for relief from consequences of Non / Short deduction of TDS from payments to Residents / Non Resident [first proviso to sec201(1)/ first proviso to sec 206(6A) inserted by Finance Act 2012 w.e.f ] 26

27 CA Certificate New Provision Exempts payers from consequences of non/short deduction of TDS from payments to residents if there is No loss to e e ue due to Non/Short deduction. No relief from Interest u/s 201(1A). Interest u/s 201(1A) to be paid from date on which TDS deductible till date of furnishing of Return. 27

28 No loss to Revenue?? Payee has included such payment in return of income filed by him u/s 139. Payee has paid tax due on income declared in such return. Payer furnishes a certificate from CA confirming above. 28

29 One Time Exemption to Government Deductors CBDT has provided One Time Exemption to Government Deductors via Circular No. 07/2014, Dated: March 04, 2014 by Extending the Due Date of filling return to 31/03/2014 for the following Quarter * FY nd to 4th Quarter * FY st to 3rd Quarter However, any fee under section 234E of the Act already paid shall not be refunded. 29

30 Form 24G Every Account Officer (AO) shall furnish consolidated Form 24G every month having details of all type of deduction / collection viz. within 10 days from the end of month in respect tax deducted by deductor and reported to him for month. TDS-Salary TDS-Non Salary TDS-Non Salary Non Residents TCS. 30

31 Book Identification Number (BIN) The Accounts Office (AO) can register their AINs online. After successful registration, AO can login with user ID and password. On login, AO can View/Download Book Identification Number (BIN) Details. BIN is necessary for filing TDS Statement by DDO. 31

32 What is BIN? BIN consists of the following: Receipt Number: Seven digit unique number generated for each Form 24G statement successfully accepted at the TIN central system. DDO Serial Number: Five digit unique number generated for each DDO record with valid TAN present in the Form 24G statement successfully accepted at the TIN central system. Date: The last date of the month and year for which TDS/TCS is reported in Form 24G. Date will be in DD/MM/YYYY format. AO has to communicate the BIN details to the respective DDO. 32

33 Tax Collected at Source TCS is collected by the seller of specified goods from the buyer. TCS to be collected at the time of receipt of payment from the buyer or debiting the account of the buyer, whichever is earlier. TCS to be deposited within 1 week from the end of the week in which the tax is collected. The time limit is same even for TCS made on 31st March. 33

34 Specified Goods and Rate of TCS Alcoholic liquor for human consumption 1% Tendu Leaves 5% Timber or any other forest produce 2.5% Manufacturing Scrap which is not usable as such 1% Parking Lot, Toll Plaza 2% Minerals, being coal or lignite or iron ore 1% 34

35 Meaning of Buyer under TCS Buyer does not include Central Government State Government Public sector company Embassy, High Commission etc. TCS is not applicable if the buyer purchases goods for his personal consumption. 35

36 Capital Gain Chargeability Any profits or Gains arising from the transfer of a Capital Asset during the previous year is Chargeable to Tax under this head of income. Conditions There Should be a Capital Asset Capital Assets should be transferred during the previous year. Profit/Gains should have arisen. Such Profit/Gains should be liable for tax 36

37 CAPITAL GAINS EXEMPT FROM TAX Section 54 Section 54 B Transfer of a Long Term Residential House Property and Purchasing /Constructing a New Residential House Property. Transfer of Agricultural Land and acquires a new land for agricultural purpose. 37

38 Section 54 EC Section 54 F Transfer of Long Term Capital Asset and investing in specified Long Term Bonds. (National Highway Authority of India Bonds or Rural Electrification Corporation Ltd. Bonds.) Transfer of a Long Term Capital Asset other than a House Property and investing in Residential House Property. 38

39 Malani Somani Chandak & Associates 2, Dream Presidency, 1202/17E, Apte Road, Shivajinagar, Pune Phone-020/ /1 Fax- 020/