1. MSSV & Co, Bangalore
IS TDS
TEDIOUS ?

2. Overview of TDS Provisions CA. D.R. Venkatesh B.Com, LLB, FCA
MSSV & Co, Bangalore
Overview of TDS
Provisions
CA. D.R. Venkatesh
B.Com, LLB, FCA
Partner, MSSV & Co
Bengaluru

3. MSSV & Co, Bangalore
ISSUES
Latest
Practical

4. Issues - Latest Finance Act, 2009 Finance Act, 2010
MSSV & Co, Bangalore
Issues - Latest
Circulars / Notifications
Finance Act, 2009
Finance Act, 2010

5. CIRCULAR / NOTIFICATIONS
MSSV & Co, Bangalore
CIRCULAR / NOTIFICATIONS
S.o. 1261(E) dated 31st May, 2010
Income Tax (6th Amendment) Rules, 2010
w.e.f 1st Day of April, 2010

6. Rule 30 – Time and Mode of Payment
MSSV & Co, Bangalore
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

7. MSSV & Co, Bangalore
DEDUCTOR - OTHERS
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

8. SPECIAL PERMISSION Prior approval of the Joint Commissioner
MSSV & Co, Bangalore
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

9. Quarter ended Due date 30th June 7th July 30th September 7th October
MSSV & Co, Bangalore
Quarter ended Due date
30th June 7th July
30th September 7th October
31st December 7th January
31st March th April

10. MSSV & Co, Bangalore
E – Payment
Rule w.e.f
Circular 5/ dated
a company and
a person (other than a company) to whom the provisions of Sec 44AB are applicable

11. without challan remittance
MSSV & Co, Bangalore
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

12. CERTIFICATE Form No. 16 – Salary Form No. 16A – other than Salary
MSSV & Co, Bangalore
CERTIFICATE
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

13. Time Specified Form No. Periodicity Due Date
MSSV & Co, Bangalore
Time Specified
Form No. Periodicity Due Date
16 Annual By 31st day of May
16A Quarterly Within 15 days from the due date for furnishing the statement – Form Q

14. Statement of Deduction of Tax
MSSV & Co, Bangalore
Quarterly Returns
Statement of Deduction of Tax
Form No. 24Q - Salary
Form No. 26Q - All other deductees
Form No. 27Q - Deductees – Non- Resident

15. Time Schedule MSSV & Co, Bangalore Date of ending of the Due Date
Quarter of the F.Y
30th June th July
30th September 15th October
31st December 15th January
31st March th May

16. Furnishing the statement electronically
MSSV & Co, Bangalore
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

17. CIRCULAR / NOTOFICATIONS
MSSV & Co, Bangalore
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

18. ANNUAL TAX STATEMENT Form No. 26AS Section 203AA Rule 37AB
MSSV & Co, Bangalore
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

19. Part C : Details of Tax paid (other than TDS/ TCS)
MSSV & Co, Bangalore
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

20. MSSV & Co, Bangalore
Finance Act, 2009
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

21. MSSV & Co, Bangalore
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

22. Finance Act, 2009 Section – 194C (6) w.e.f 01.10.2009 No TDS
MSSV & Co, Bangalore
Finance Act, 2009
Section – 194C (6) w.e.f
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

23. NEW SECTION 206AA With effect from 1st April, 2010
MSSV & Co, Bangalore
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:

24. MSSV & Co, Bangalore
At the rate specified in the relevant provisions of this Act or
At the rate or rates in force or
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)

25. MSSV & Co, Bangalore
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

26. MSSV & Co, Bangalore
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

27. FINANCE ACT, 2010 MSSV & Co, Bangalore
Threshold limit w.e.f 1st July, 2010
Section Earlier (Rs.) New (Rs.)
194B 5, ,000
194BB 2, ,000
194C 20, ,000
50, ,000
194D 5, ,000
194H 2, ,000
194I 1,20,000 1,80,000
194J 20, ,000

28. FINANCE ACT, 2010 Interest u /s 201 – w.e.f: 01.07.2010
MSSV & Co, Bangalore
FINANCE ACT, 2010
Interest u /s 201 – w.e.f:
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

29. Amendment to Section 40(a)(ia)
MSSV & Co, Bangalore
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

30. MSSV & Co, Bangalore
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 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

31. ISSUES - GENERAL MSSV & Co, Bangalore
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 ,995
Rs. 30,333 Rs. 1,81,995
Audit Fee of Rs. 25,000 for the year ended provided & deducted in the month of September, Whether TDS is required u /s 194J?

32. MSSV & Co, Bangalore
ISSUES - GENERAL
The entries in the books of accounts for MIS purposes.
- Examine the applicability of Chapter XVII - B

33. ISSUES - GENERAL Excess / Short Dedcution
MSSV & Co, Bangalore
ISSUES - GENERAL
Excess / Short Dedcution
Excess / Short Remittance – Adjustment
- Within the quarter
- Within the financial year
Refund of Excess tax remitted

34. ISSUES - GENERAL Defaults Non deduction Short deduction Non Remittance
MSSV & Co, Bangalore
ISSUES - GENERAL
Defaults
Non deduction
Short deduction
Non Remittance
Short Remittance
Delay in Remittance

35. ISSUES - GENERAL Consequences Interest Penalty Prosecution
MSSV & Co, Bangalore
ISSUES - GENERAL
Consequences
Interest
Penalty
Prosecution
Amount not deductible

36. ISSUES - GENERAL Disallowance u /s 40 (a) (ia) & Form No 3CD
MSSV & Co, Bangalore
ISSUES - GENERAL
Disallowance u /s 40 (a) (ia) & Form No 3CD
In the case of
non deduction
short deduction
non remittance
short remittance
delay in remittance

37. MSSV & Co, Bangalore
ISSUES - GENERAL
M/s X Private Limited paid statutory audit fee of Rs. 1,00,000/- in cash during the accounting year without deduction of tax at source
For assessment year , examine the disallowance u / s 40(a)(ia) and u /s 40A(3)

38. ISSUES - SPECIFIC MSSV & Co, Bangalore
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

39. ISSUES - GENERAL U / s 194H Discount Rebate Incentive
MSSV & Co, Bangalore
ISSUES - GENERAL
U / s 194H
Discount
Rebate
Incentive

40. ISSUES - SPECIFIC U / s 194I – Rent
MSSV & Co, Bangalore
ISSUES - SPECIFIC
U / s 194I – Rent
Advance Rent of Rs. 8 Lakhs paid for next 5 Financial Years on
Rent of Rs. 8 Lakhs paid to 5 co-owners
Warehousing Charges
Cooling Charges paid to cold storage owners

41. MSSV & Co, Bangalore
ISSUES - SPECIFIC
M/s King Fisher Airlines paid landing fee and parking fee of Rs. 10 Crores to Airport Authorities during the accounting year M/s King Fisher Airlines proposes to deduct tax at source:
194 C or 194I?

42. MSSV & Co, Bangalore
ISSUES - SPECIFIC
Tenants in a commercial complex following payments are made to the owner:
Rent
Maintenance Charges
Power & Water Charges re-imbursements

43. MSSV & Co, Bangalore
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%?

44. MSSV & Co, Bangalore
DIRECT TAXES CODE, 2010
TDS Provisions

45. Collection and Recovery of Tax A – Deduction of Tax at Source
MSSV & Co, Bangalore
CHAPTER XIII
Collection and Recovery of Tax
A – Deduction of Tax at Source
(Section 193 – 201)

46. Section 195 Liability to Deduct tax at source Section 195(1):
MSSV & Co, Bangalore
Section 195
Liability to Deduct tax at source
Section 195(1):
Specified Payment
At the time of Payment
At the appropriate rate

47. Specified payment (Column 2)
MSSV & Co, Bangalore
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

48. Deductee has failed to furnish his PAN Higher of the following 20% or
MSSV & Co, Bangalore
Section 195(5):
Deductee has failed to furnish his PAN
Higher of the following
20% or
The rate specified in Sub-section (2),(3) or (4) of Section 195

49. SECTION 200 No deduction of tax in certain cases 19 cases
MSSV & Co, Bangalore
SECTION 200
No deduction of tax in certain cases
19 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

50. MSSV & Co, Bangalore
CONCLUSION
Duty / Responsibility under chapter XVII – B cannot be bypassed by the deductor to any person

51. CONCLUSION Method of Accounting Cash Basis Mercantile Basis
MSSV & Co, Bangalore
CONCLUSION
Method of Accounting
Cash Basis
Mercantile Basis
Compliance Basis

52. CONCLUSION GOLDEN PRINCIPLES Applicability Rate Deduction & Remittance
MSSV & Co, Bangalore
CONCLUSION
GOLDEN PRINCIPLES
Applicability
Rate
Deduction & Remittance
Planning

53. Finally MSSV & Co, Bangalore Deduct and Remit Without failure
Avoid – interest, penalty, prosecution and disallowance
With due care
File TDS returns & issue the forms
Within time

54. Then… TEDIOUS TO DEDUCTOR TO DEDUCTEE TO DEPARTMENT TDS IS NOT
MSSV & Co, Bangalore
Then…
TDS IS NOT
TEDIOUS
TO DEDUCTOR
TO DEDUCTEE
TO DEPARTMENT

55. MSSV & Co, Bangalore
THANK YOU