1. WORKSHOP ON TDS For Government Deductors By Shital Shashwat Verma,IRS
Deputy Commissioner of Income Tax

2. Agenda of the presentation-
What is TDS?
Deductor’s Duty
Rates and details
24G
Penal provisions
Do’s and Don'ts for the deductors

3. What is TDS?
Not a tax but a mode of tax collection.
It is similar to "pay as you earn" scheme also known as Withholding Tax in many other countries.
Prevents evasion of tax against subsequent variations / manipulations of accounts
Maintains better cash-flow for the Govt.

4. Tax deduction Account Number (TAN)
Unique identification number of a Deductor. Mandatory to quote TAN on challan &returns.
Non-obtaining / False TAN–Penalty Rs.10,000
A ten character alpha-numeric number.
JBPC04371B

5. Deductor’s Duty To Deduct To Deposit
To File Quarterly TDS Returns(F.24Q,26Q)
To Issue TDS Certificates to the Payee(F.16/A)
To check status online at TRACES.

6. To Deduct
Obligation is of the Deductor to deduct Tax from any sum liable to TDS
At the prescribed rate - depending on the nature of payment and status of Deductee
On Credit or payment, whichever is earlier
Credit to “suspense a/c” also attracts TDS

7. Section 192 – TDS on salary
At the time of payment (Estimated annual income)
Rates prescribed in the Finance Act.
To include all perks, allowances, reimbursements, voucher payments; Pension; Annuity; Gratuity; Perquisite; Commission; allowances, Encashment of leave, profits in lieu of salary, Advance salary and arrears of salary.
Amount of deduction of tax may vary from month to month. However, the correct tax liability has to be worked out in the month of February of the FY.
For details- see printed material.

8. S. 194A-Interest other than interest on securities
TDS on Interest Payments
TDS on GROSS INTEREST
On interest exceeding Rs /-
@ 10%

9. S.194C-TDS on contract payments
all types of contracts - transport of goods or passengers(except by railway), advertising, broadcasting, telecasting, labour contracts, material contracts , works contracts, catering, printing/ supplying any product according to your specification with your material, AMC, Security contracts.
Nil rate will be applicable if the transporter quotes his PAN. If PAN is not quoted the rate will be 20%.

10. S.194C
The amount of any sum credited or paid exceeds Rs (or Rs. 75,000 during the fin. Year- then tax will be required to be deducted, even where individual transaction is less than the threshold of Rs. 30,000).
1% in case of payments to individual/ HUF. (check the 4th letter of PAN- it should be “P” or “H”)
In case of

11. S.194I-TDS on rent payments
‘(i) “rent” means any payment, by whatever name called, under any lease, sublease,tenancy or any other agreement or arrangement for the use of (either separately or together) any, —
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings,
whether or not any or all of the above are owned by the payee;’.

12. S.194I Payments exceeding Rs 1,80,000 per annum
Rent of plant, machinery or 2% , and
for rent of land, building or 10%

13. TDS u/s 194J-Professional & Technical Services
TDS on fees for professional or technical services.
Professional- eg. Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, advertising, sportspersons, I.T.Ps, Film artistes, Company secretary, Information technology experts, event managers.

14. S.194J
In case of any managerial, technical, consultancy services royalty, etc. On gross payments including reimbursements, taxes if any.
TDS is deductible if payment is in excess of Rs. 30,000/- per annum.
10%

15. S.194H-Commission
on payment of commission or brokerage exceeding Rs 5000/-
@ 10%
commission or brokerage” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) 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, not being securities;

16. TDS at a Glance 192 Salary 2.00 lacs Average Rate --- 194A Interest
Section of Act
Nature of payment
Threshold Limit (Rs)
Rate of TDS (%)
Non-Co.
Company
192
Salary
2.00 lacs
Average Rate
---
194A
Interest
>10,000/- 10
194C
Contract
>30,000/- or
>75,000/- 1
(Ind/HUF) 2
(Others)

17. Commission / Brokerage >5,000/- 10
Section of Act
Nature of payment
Threshold Limit (Rs)
Rate of TDS (%)
Non-Co.
Company
194H
Commission / Brokerage
>5,000/- 10
194I (Rent)
Land & Building
>1.80 lac
Machinery, Equipment, Plant
-“- 2
194J
Professional fee/ Tech services / Royalty
>30,000/-

18. Purchase of Immovable Property
Section of Act
Nature of payment
Threshold Limit (Rs)
Rate of TDS (%)
Non-Co.
Company
194IA
Purchase of Immovable Property
> 50 lakhs 1
194LA
Compensation for immovable property
>2.00 lac 10

19. Tax Collected at Source (TCS)
The Seller who sells the goods specified u/s.206C(1) is liable to collect income-tax at the prescribed rate from the Buyer of such goods at the same time of debiting of the account of the buyer or at the time of receipt of such amount.
The TCS is to be collected apart from the sale value. TCS is to be deposited to Central Government A/C.

20. Liability of TCS Sl. Nature of Goods OR licence/lease @ 1.
Alcoholic liquor for human consumption 1% 2.
Tendu leaves 5% 3.
Timber under forest lease
2.5% 4.
Timber other than a forest lease 5.
Any other forest produce 6.
Sale of Scrap 7.
Minerals, being coal or lignite or iron ore 8.
Parking lot, Toll Plaza, Mining & quarrying 2%

21. To Deposit- (section 200/Rule30)
Tax deducted or collected must be remitted to the Central Govt. Account through challan No.281.
before 7th of the following month(Even for March)
Govt DDOs- on Same day (Book Adjustment)
CDDO/PAO/DTO - 7 days(Through Challan)

22. To File TDS Returns &To Issue TDS Certificates to the Payee
Nature of payment
Returns
Certificates to the Payee
Salary (TDS)
24Q
Form 16
Other than Salary(TDS)
26Q
Form 16A
TCS
27EQ
Form 27D

23. TDS Returns and Form 16/16A Quarter ending TDS returns Form 16/16A
30th June
31st July*
15th August*
30th September
31st October*
15th Nov*
31st December
31st January*
15th Feb*
31st March
15th May
*(Due by 15th of the month if challan payment)
30th May
(31st May for Form 16)
*(Due by 30th of the next month if challan payment)

24. Due Date of TCS Quarter ending 27EQ Statement Certificate Form 27D
30th June
15th July
30th July
30th September
15th October
30th October
31st December
15th January
30th January
31st March
15th May
30th May

25. Form No. 24G wef 01.04.2010 Respective PAO / TO / CDDO to obtain AIN
In respect of Govt. DDOs crediting TDS through Book Adjustment :
Respective PAO / TO / CDDO to obtain AIN
Submit statement in Form 24G within 10 days from the end of the month
Intimate Book Identification No. (BIN) to DDOs

26. Form 24G
*S.192(1A) r.w.Rule 30(4) An office of the Government, where tax has been paid to the credit of Central Government without the production of a challan is required to- a) file Form 24G within 10 days from the end of the month for that month. B) Intimate Book Identification Number(BIN) generated by System to each DDO. (Income – Tax Department Notification no. 41/2010 dtd ) *To be filed by PAO / DTO / CDDO

27. Failure to make TDS
Deductor – Deemed to be assessee in default – Recovery of amount of TDS
Liable to pay simple Interest:
@1% p.m. for delay in deduction; and
@1.5% p.m. for delay in deposit of tax
Creates charge on all the assets of Deductor for failure to deposit tax to Govt’s a/c

28. PENALTY Failure to : (i) issue TDS certificate, or
(ii) deliver Form 15G /15H, within due date
- Rs.100 per day of default
Penalty u/s.271C % of tax in default
Failure to apply / quote PAN or TAN :
- Penalty of Rs.10,000/-

29. Late filing of Statement
Penalty-Failure to file TDS statement-
u/s Rs. 100 per day of default
From Qtr-1 of FY
U/s 271H- Rs. 10,000/- to Rs.1,00,000/-.
Fee- Fee per day of default
- Fee shall not exceed the amount of Tax
The fee is mandatory.
No provision for its waiver.

30. PROSECUTION
Failure to deposit Tax to the credit of Central Government’s account :
- Rigorous Imprisonment with Fine;
- Period of imprisonment may vary from 3 months to 7 years

31. Dos and Don’ts Instances of Mistakes in Challan-
Mentioning of wrong Assessment Year.
Mentioning of wrong Section code.
Mentioning of wrong deductee code.
Mentioning of wrong payment code.
Mentioning of wrong TAN.
Mentioning of wrong PAN/PAN instead of TAN.

32. Dos and Don’ts
TRACES is for TDS reconciliation Analysis and Correction Enabling System.
Log in to TDS CPC’s website-TRACES regularly. E-tutorials on the site for guidance.
Download default summary in case of demands w.r.t TDS statements filed by you-correction.
Use separate challans for different sections.
Forms-16/16A/ to the payee to be issued from TRACES compulsorily. Circular No. 03/2011

33. Dos and Don’ts
TCS- purchase price includes any amount( by whatever name called) paid/payable by the buyer. It also includes excise duty.
Penal interest payments- attracts TDS
Deductions allowed to salaried employees, including LTC-it is obligatory to keep and preserve evidence.
No specific order from I.T. Deptt required for enforcing TDS u/s 192. CIT v. BK Chatterjee (1993) 202 ITR 785(Cal)

34. Matching of Information
Matching of information in e-TDS return with payment details / PAN database
Matching of Challan details in e-TDS return with that of Bank data base (OLTAS)
Matching with respect to details available in Income Tax e-return of Deductee
Mismatch- correction Statements.
If matching successful then PAN ledger of each deductee is credited.

35. Annual Tax Statement (26AS)
For Online view of ATS :
- Registration of PAN for User ID & Password
- No Fee payable at TIN-FC
Form 26AS contains :
- TDS/TCS deposited on behalf of taxpayer
- Advance/Self-assessment Tax paid
- Regular Tax paid by the PAN holder