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TDS-

TDS means 'Tax Deducted at Source'. TDS is one of the modes of collection of taxes, by which a certain percentage of amount is deducted by a person at the time of making / crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government Account.

POINT OF DEDUCTION OF TDS

Time of Deduction

Salary: At the time of payment
Others: When income paid or credited to the account including “payable” or “suspense” account whichever is earlier

CONSEQUENCES OF DEFAULT:

Default/ Failure

Section

Nature of Demand

Quantum of demand or penalty

Failure to deduct tax at source

201(1)

Tax demand

Equal to tax amount deductible but not deducted.

201(1A)

Interest

@1 % p.m. of tax deductible.

271C

Penalty

Equal amount of tax deductible but not deducted.

DUE DATE FOR DEPOSITING TDS

Quarter

Salary

Other Than Salary

April – Feb

7th of next month

7th of next month

March

30th April

30th April

CONSEQUENCES OF DEFAULT:

Default/ Failure

Section
 

Nature of Demand

Quantum of demand or penalty

Failure to deposit tax at source

201(1)

Tax demand

Equal to tax amount not deposited

201(1A)

Interest

@1.5% p.m. of tax not deposited

276B

Prosecution

Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine

DUE DATE DATE OF FILING TDS RETURN

 

Non-Government Deductors

Quarter

Salary

Other Than Salary

First

July 15th

July 15th

Second

October 15th

October 15th

Third

January 15th

January 15th

Fourth

May 15th

May 15th

CONSEQUENCES OF DEFAULT –

Default/ Failure

Section

Nature of Demand

Quantum of demand or penalty

Failure to furnish prescribed statements u/s 200(3)

272A(2)

(k)

Penalty

Rs. 100 every day during which the failure continues subject to maximum of TDS amount

Failure to file TDS return in time

234E

Fine

Rs. 200 per day will be levied on the deductor, as long as TDS Statement is not filed upto the maximum of TDS amount.

If deductor exceeds one year time limit to File TDS Statement.

If deductor furnishes incorrect details like PAN, TDS Amount, Payment of Challan etc.

271H

Penalty

Deductor has to pay a penalty ranging from minimum of Rs. 10,000/- to One Lac rupees

IT IS MANDATORY TO PROVIDE TDS CERTIFICATE TO DEDUCTEES

Every person deducting tax at source is required as per Section 203 to furnish a certificate to the payee to the effect that tax has been deducted along with certain other particulars. This certificate is usually called the TDS certificate. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. In case of employees receiving salary income including pension, the certificate has to be issued in form No.16.

CONSEQUENCE OF DEFAULT-

Default/ Failure

Section

Nature of Demand

Quantum of demand or penalty

Failure to issue TDS certificate u/s 203

272(A)(g)

Penalty

Rs. 100 every day during which the failure continues subject to maximum of TDS amount.

IN CASE, DEDUCTEE DOES NOT PROVIDE PAN-

 

Finance Act (2) of 2009 makes PAN compulsory in case of TDS eligible payments. Failing to that, Deductor will be making TDS at a higher rate!!

This has been made by introducing a new section 206AA into the Income Tax Act. As per this new section, Any Deductor making a TDS eligible Payment to a Party, who has not provided PAN, should make TDS at a higher rate.

For such case, the rate of TDS should be determined at higher of below conditions:

a. TDS rate prescribed in the Act

b. Rate of Tax in force

c. At 20%

CONSEQUENCE OF DEFAULT IN MENTIONING PAN-

Default/ Failure

Section

Nature of Demand

Quantum of demand or penalty

Failure to mention PAN of the deductee in the TDS statements and certificates

272B

Penalty

Rs. 10000

IN CASE, ANY NOTICE IS RECEIEVED FROM THE DEPARTMENT -

Any notice received from Department should be complied within 30 days of receipt else it will attract additional interest @ 1% pm u/s 220(2).


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Category Income Tax, Other Articles by - Lalit kundalia 



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