Presentation is loading. Please wait.

Presentation is loading. Please wait.

TAX DEDUCTED AT SOURCE Presented By: Sowmya “PAY AS YOU EARN”

Similar presentations


Presentation on theme: "TAX DEDUCTED AT SOURCE Presented By: Sowmya “PAY AS YOU EARN”"— Presentation transcript:

1 TAX DEDUCTED AT SOURCE Presented By: Sowmya “PAY AS YOU EARN”

2 Why – Tax Deducted At Source ? What is Tax Deducted At Source ? TDS

3 Relevant Sections  Sec 192 – Salary  Sec 193 – Interest on Securities  Sec 194 – Dividends  Sec 194A – Interest other than Interest on Securities  Sec 194B – Winnings from Lotteries, Crosswords, Puzzles etc.  Sec 194BB– Winnings from Horse race

4  Sec 194C – Payment to Resident Contractors  Sec 194D – Insurance commission  Sec 194E – Payment to Non Resident Sportsmen or Sports Association  Sec 194EE – Payments in respect of Deposit under National Savings Scheme  Sec 194G – Commission on sale of Lottery Tickets Relevant Sections

5  Sec 194H – Commission and Brokerage  Sec 194I – Rent  Sec 194J – Fees for Professional or Technical Services  Sec 194K – Income in respect of units  Sec 194LA –Payment of Compensation on acquisition of certain immovable property Relevant Sections

6  Section 194 LB ( w.e.f ) Income by way of Interest from INFRASTRUCTURE DEBT FUND Insertion 2011

7  Person responsible to deduct tax- Employer  Tax to be deducted at rate applicable to individuals.  Inclusion of income from other heads  Payment of tax on Non Monetary Perquisites.  Salary from more than one employer.  Adjustment of amount deducted U/s192. Sec 192 – Salary

8 Case Law:  CIT Vs Venron Expat Services INC. (2010) The assesse failed to deduct tax monthly, however deducted towards the end of FY. Sec 192 – Salary Judgment:  Permits adjustment of excess or deficit.  No Interest U/s 201(1A).

9 Sec Interest on Securities  Person responsible to deduct tax –  Central or state govt.  Local authority.  Company or corporation established by govt.  Rate of tax - 10%.  Exemptions: Debentures (Resident Individuals)  Paid by Account Payee Cheque of amount not exceeding Rs 2,500

10  List of interest payments- No TDS required  Interest on Listed Securities  Payment to New Pension Trust  National Defence Bonds  National Defence Loan  National Development Bond  7-year NSC  Gold Bonds  LIC, GIC or any of its subsidiaries Sec Interest on Securities

11 Sec 194 – Dividends  Person Liable to deduct tax is the principal officer.  Rate of tax - 10%.  Applicable only if dividend is paid u/s 2(22)(e).

12 Sec194A – Interest other than Interest on Securities  Rate of tax – 10%  Exemption Limit – Interest by Banking company - Rs 10,000 Others - Rs 5,000  Credit or Payment, whichever is earlier.

13 Sec194A– Interest other than Interest on Securities  List of interest payments- No TDS required  LIC, UTI, Other Insurance Companies  To the Partner of the firm  By a Co-operative society to its members  By Primary Agricultural society  Saving, Current Account, Recurring Deposit.  Interest on compensation (Motor Accident Claim) -Does not exceed Rs 50,000  Interest on Zero Coupon Bond.

14 Sec 194B- Winnings from Lotteries, Crosswords, Puzzles etc.  Deductor – Any person paying the sum by way of winning  Rate of tax – 30%  At the time of payment  Exemption limit – Upto Rs 5,000 From Rs 10,000

15  H. Anraj Vs Government of Tamilnadu  Essential elements that constitute lottery.  A prize or some advantage in the nature of prize,  Distribution thereof by chance and  Consideration paid or promised for purchasing the chance. Sec 194B- Winnings from Lotteries, Crosswords, Puzzles etc.

16 Case Law:  ACIT Vs Director of State Lotteries, Assam. Income accruing to an agent/trader in respect of prizes on unsold/unclaimed lottery tickets in his possession. Judgment:  Income From Business, not winning from lottery. Hence not subject to TDS. Sec 194B- Winnings from Lotteries, Crosswords, Puzzles etc.

17 Sec 194BB– Winnings from Horse race  Deductor – Licensed by the govt. or licensed bookmaker  Rate of tax – 30%  At the time of payment  Exemption limit – Upto Rs 2,500 From Rs 5,000

18 Case Law: Royal Calcutta Turf Club Limit u/s 194BB is applicable for each payment or entire winning for the FY? Judgment: Limit should be applied to each payment and not the entire winnings. Sec 194BB– Winnings from Horse race

19 Sec 194C– Payment to Resident Contractors  Rate of Tax – Individuals and HUFs - 1% Others - 2%  Exemption Limit- Upto Rs 20,000/50,000 From Rs 30,000/75,000

20 Sec 194C– Payment to Resident Contractors  Exemption  Hiring or Renting equipments  Sale of goods  Supply of goods- Buyers specification  Payment to airlines – Air travel of individuals  Payment to banks for Discounting Bills  Individual/HUF- exclusively for personal purposes  Works executed under NREP & RLEGP

21 Case law:  Mukta Arts Vs ACIT (2010) Assessee was engaged in Film Financing and made certain payments by way of advances to another party for production of film. Judgment:  Assessee was not acting as contractor nor the other party a contractee Assessee was not required to deduct tax. Sec 194C– Payment to Resident Contractors

22 Sec 194D – Insurance commission  Person responsible to deduct tax- Insurance companies.  Rate of tax – 10%  Credit or Payment, whichever is earlier.  Exemption limit – Upto Rs 5,000 From Rs 20,000

23 Sec 194E– Payment to Non Resident Sportsmen or Sports Association  Rate of tax – 10%+SC + EC 2% + SHEC 1%  Credit or Payment, whichever is earlier.  No Provision For deduction of Tax at lower rate.  Category of payee – Income to NR by way of  Participation in India in any game (excl card or gambling)  Advertisement  Contribution of article relating to any game or sport.

24 Sec 194EE– Payments in respect of Deposit under NSS  Rate of Tax-20%  At time of payment  Exemption Limit- Rs 2,500  No Provision For deduction of Tax at lower rate.  No TDS if payment to legal heir.

25 Sec 194G – Commission on sale of Lottery Tickets  Rate of tax – 10%  Exemptions – Payment not exceeding Rs 1,000. Payment to New Pension Trust.  Category of payee  Any person stocking, purchasing or selling lottery tickets

26 Case Law: MS hameed Vs director of State Lotteries (2001) Discount given to an agent on bulk purchase of lottery ticket from state Govt. Judgment: Such Discount is not a commission and not liable for TDS Sec 194G – Commission on sale of Lottery Tickets

27 Sec 194H – Commission and Brokerage  Rate of Tax – 10%  Exemption limit – Upto Rs 2,500 From Rs 5,000  Exemptions – Payable by BSNL/MTNL to their PCO franchisees. Payment to New Pension Trust.

28 Case Law: Vodafone Essar Cellular Limited vs ACIT. Sale of sim card and recharge coupons at discounted price to distributors Judgment: Such Discount given is a commission, hence liable for TDS Sec 194H – Commission and Brokerage

29 Sec 194I – Rent  Rate of Tax – Land/building/ furniture/Fittings – 10% Machinery/Plant/Equipment – 2%  Exemption limit – Upto Rs 1,20,000 From Rs 1,80,000  Exemptions – If Payee is govt or local authority. Payment to New Pension Trust

30 Case Law: CIT Vs Asiana Airlines (2009) Landing and Parking charges collected. Is it liable for TDS u/s 194I ? Judgment: Landing and Parking charges is “Deemed” to be rent and liable for TDS Sec 194I – Rent

31 Circulars and Cases U/S 194I  If a person has taken particular space on rent and sub-lets it.  Hotel Accomodation taken on regular basis.  Building is let-out along with furniture/ fittings.  Payment made for warehousing charges.  Payment made to landlord in nature of advance rent or non-refundable deposit.

32 Sec 194J – Fees for Professional or Technical Services  Rate of Tax – 10%  Exemption Limit- Upto Rs 20,000 From Rs 30,000  Exemptions –  Payment by individual/HUF Exclusively for their personal purposes  Payment to New Pension Trust.  Category of payee – Professional service or Technical service or Royalty or payments received U/s 28(1)(va)

33 Case Law: CIT Vs Bharthi cellular ltd Interconnection/port charges paid Judgment: Fees for technical service includes only service rendered by human not robots/machines Sec 194J – Fees for Professional or Technical Services

34 Illustrative cases of TDS u/s 194J  Advertising agency makes payment to models.  Payment made to Recruitment agency.  Payment made by a company to share registrar.  Maintenance contract involving Technical services.  Service of professional cameraman.

35 Sec 194K – Income in respect of units  Not relevant now as income from units is exempt w.e.f. Assessment year 04-05

36 Sec 194LA–Compensation on acquisition of immovable property  Rate of Tax- 10%  Exemption Limit- Rs1,00,000  Exemption: Payment to New Pension Trust

37 Case Law: State of Kerala Vs Mariamma Date of Deduction in case of delayed payment in compensation Judgment: Deduction to be made on the date of payment even though the acquisition may have been made much before. Sec 194LA–Compensation on acquisition of immovable property

38 Sec 194LB –Income from Infrastructure Debt Fund  Rate of Tax- 5%  Payment to  Non residents other than company  Foreign Company  Credit or Payment, whichever is earlier.  W.e.f

39 Sec 195 – TDS on Non Residents  Payment to  Non residents other than company  Foreign Company  Payment or Credit – whichever is earlier  Rate of Tax  Rate as per the Finance Act  Rate U/s 90  Rate U/s 90A

40 Sec 195 – Verdicts  TDS liability only if income is taxable.  Soliciting exhibitors outside India for an event in India.  No TDS on income earned before PE established in India.  Managerial & Consultancy services liable to TDS.  Interest to non resident with no PE in India liable to TDS.

41 Sec 195 A – Grossing Up  Income payable net of tax  Gross Income  Less: TDS  Net Income  Obligation to furnish certificate to the Deductee (Net Income & TDS thereon)

42 Sec 196 – NO TDS  No TDS in case payment to  Govt  RBI  Corp established by Central Act  Mutual Fund U/s 10(23D)

43 Sec 196 B – Income from Units purchased in Foreign currency  Income from units  U/s 115 AB  LTCG on transfer of such units  Rate of Tax – 10% + SC + EC +SHEC

44 Sec 196 C – Foreign Currency Bonds / GDR’s  Payment to Non Resident  Income by way of  Interest/dividend on GDR’s & Bonds  LTCG on transfer of such bonds  Rate of Tax – 10% + SC + EC +SHEC

45 Sec 196 D – Income of Foreign Institutional Investors  Income from Securities  Rate of Tax – 20% + SC + EC +SHEC

46 Sec No Deduction or Lower Rate  Certificate for deduction at lower rate  Make application to AO  No deduction or less deduction  No Certificate to be issued if PAN is not provided

47  Tax Deducted is deemed to be Income Received  TDS deducted & remitted – payment on behalf of the person from whom it was deducted  Service Tax – TDS  Where sum is used – Including Service tax  Where income is used – Excluding Service tax Other Issues

48  TDS to be deposited to the credit of Govt.  Tax deducted on behalf of Govt.  Without tax challan – same day  With tax challan – on or before 7days  Tax deducted by others  Credited or paid in March – on or before 30 April  Other case – on or before 7days  Form 15H/15G Other Issues

49  Assessee in default  Non deduction, non payment, Non payment of tax U/s 192(1A)  Interest U/s 201  Does not deduct tax  Fails to remit tax to the Govt.  Does not pay tax U/s 192(1A)  Rate of Interest for default  DOD – Actual DOD = 1%  DOD - Date of actual payment = 1.5% Other Issues

50 Important Points  Book entry  Consolidated TDS certificate  Issue of duplicate TDS certificate  New Pension Trust

51 Important Points  Failure to furnish PAN  Highest of  Rate in Finance Act  Rate in force( Fin Act)  20%  Deductor – 194A/194C/194H/194I/194J  Any assessee(other than individual/HUF who are not subject to tax audit U/s 44AB for the preceeding financial year)

52 E- Filing  Assesses mandatorily required to e-file  Govt.  Company  Assessee subject to tax audit U/s 44AB  Deducteess or Collectees for previous FY quarter is = or > 50

53  TIN facilitates a PAN holder to view Annual Tax Statement online  Form 26AS contains  Details of tax deducted on behalf of the taxpayer by deductors  Details of tax collected on behalf of the taxpayer by collectors  Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers (PAN holders)  Details of paid refund received during the financial year Form 26AS

54  Responsibility of the receiver of payment.  Presumption that buyer of goods will have taxable income. Tax Collected at Source

55 Rate of TCS Tax Collected at Source Specified goodsRate Alcoholic liquor for human consuption 1% Tendu leaves 5% Timber obtained 2.5% Any other forest product 2.5% Scrap 2% Parking lot 2% Toll Plaza 2% Mining And Quarring 2%

56  No TCS  Buyer should be resident in India.  Furnish self declaration in writing.  Goods to be utilsed for manufacturing, processing or producing and not for trading.  Submit copy of declaration within 7 th of following month. Tax Collected at Source

57 THANK YOU


Download ppt "TAX DEDUCTED AT SOURCE Presented By: Sowmya “PAY AS YOU EARN”"

Similar presentations


Ads by Google