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 |
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).
CAclubindia
