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Pavan Goyal
Introduction
Meaning
Tax deduction at source means the tax required to be paid by the assessee, is deducted by the person paying the income to him. Thus, the tax is deducted at the source of income itself.
Working Mechanism
TDS needs to be deducted by the person making the
payments or providing the expenses. Deduct the amount of TDS and make the balance payment. Deposit the amount deducted as TDS with the government within the due dates to avoid any late payment interest File the TDS return with the govt. (NSDL) Issue the TDS certificates
Golden Rule
TDS to be deducted on payments or credits whichever is earlier.
TDS rates
TDS rates.xlsx
1.
2. 3. 4.
30th June
30th September 31st December 31st March
1.
Salary No.16)
By 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted
2.
NonSalary(Form No.16A)
Quarterly
Within fifteen days from the due date for furnishing the statement of TDS
Consequences of Default
Interest liability of 1.00% on non-deduction
Interest liability of 1.50% on late payment Expenses to be disallowed permanently when TDS is
not deducted Expenses to be disallowed on payment basis, when TDS is deducted but not paid to govt. within due time prescribed
Other issues
200 Rs. Per day penalty for late filing of the return
Assessee in default Penalties equals to the tax amounts
Cases
1) TDS deducted and paid in FY 2011-2012 for FY 20092010 Anand Shelters (TDS Cannot be claimed)(Audit fees) 2) Revenue recognition issue, TDS is on credit and payment basis. Some assessee follow cash system of accounting. 3) Issues due to incorrect Pan number mentioned in TDS returns No credit allowed 4) Issue where your pan number is mentioned and you are considered as assessee in default. 5) No credit unless TDS return filed litigation with ITD
Contd.
Asmi metals case for Expenses disallowed for non
payment of TDS. (Add back of 5 crores exp.) Interest liability also comes to a higher side. Case of Mentioning Relatives Pan Number and claiming TDS Siddharth Creat. Foreign remittance TDS Tours and travels Another Golden Rule 1) Deduct higher when dilemma with rates 2) Deduct when dilemma with deduction itself
Any Questions