Surcharge & ed cess on tds on foreign payments
This query is : Resolved
19 March 2014
Hi,
I would like to know the applicability of Surcharge(SC) & education Cess while deducting TDS on payment to Non-Resident? If yes from which year?
As per CIRCULAR NO.03/2014 Surcharge and Ed Cess is applicable for FY-2013-14.
And TDS CPC has confirm that the Surcharge & ED cess will be applicable for Q-3 of FY 2013-14.
Can any body clare the position.
I would like to know the applicability of Surcharge(SC) & education Cess while deducting TDS on payment to Non-Resident? If yes from which year?
As per CIRCULAR NO.03/2014 Surcharge and Ed Cess is applicable for FY-2013-14.
And TDS CPC has confirm that the Surcharge & ED cess will be applicable for Q-3 of FY 2013-14.
Can any body clare the position.
19 March 2014
Yes This is correct and is applicable from FY 2013-14
21 March 2014
Thanks Manish,
The IT act says it is applicable from 01-04-2013, but the CPC TDS Gaziyabad has confirm that the SC & ED cess will be applicable from Oct-2013 onwards and all the intimation for non deduction of SC & ED cess issued for the period prior to Oct-13 will be waived.
So from which date we shold apply SC & ED cess.
The IT act says it is applicable from 01-04-2013, but the CPC TDS Gaziyabad has confirm that the SC & ED cess will be applicable from Oct-2013 onwards and all the intimation for non deduction of SC & ED cess issued for the period prior to Oct-13 will be waived.
So from which date we shold apply SC & ED cess.
26 July 2025
Here’s the clarity on **Surcharge and Education Cess applicability on TDS on foreign payments**:
---
### Applicability of Surcharge & Education Cess on TDS for Non-Residents:
1. **Effective Date as per IT Act**
* The Finance Act, 2013, amended the Income Tax Act to make **Surcharge and Education Cess applicable on TDS payments from 1st April 2013** (i.e., FY 2013-14 onwards).
2. **Circular No. 03/2014**
* CBDT issued Circular No. 03/2014 dated 13 March 2014 clarifying that surcharge and education cess are applicable on TDS payments made **on or after 1 April 2013**.
3. **TDS CPC Ghaziabad Confirmation**
* TDS CPC Ghaziabad operationally started charging surcharge and education cess on TDS payments **from October 2013 (Q3 FY 2013-14)**.
* Intimations for non-deduction of surcharge & cess **prior to October 2013 are being waived off** by CPC.
4. **Practical Position**
* **Legally**, surcharge & cess are applicable from 1 April 2013.
* **Operationally**, CPC systems applied these from October 2013 onwards.
5. **What should you do?**
* Deduct and deposit surcharge and education cess on TDS for payments made **from October 2013 onwards** to avoid issues.
* No need to worry for Q1 & Q2 (April-Sept 2013) if surcharge and cess were not deducted, as per CPC waiver.
---
### Summary:
| Period | Surcharge & Ed Cess on TDS |
| ------------------------ | ----------------------------------------------- |
| 01-Apr-2013 to Sept-2013 | Legally applicable but CPC waives non-deduction |
| From Oct-2013 onwards | Deduct and deposit compulsorily |
---
If you want, I can help draft a note or FAQ on this for your accounts/tax team. Would that help?
---
### Applicability of Surcharge & Education Cess on TDS for Non-Residents:
1. **Effective Date as per IT Act**
* The Finance Act, 2013, amended the Income Tax Act to make **Surcharge and Education Cess applicable on TDS payments from 1st April 2013** (i.e., FY 2013-14 onwards).
2. **Circular No. 03/2014**
* CBDT issued Circular No. 03/2014 dated 13 March 2014 clarifying that surcharge and education cess are applicable on TDS payments made **on or after 1 April 2013**.
3. **TDS CPC Ghaziabad Confirmation**
* TDS CPC Ghaziabad operationally started charging surcharge and education cess on TDS payments **from October 2013 (Q3 FY 2013-14)**.
* Intimations for non-deduction of surcharge & cess **prior to October 2013 are being waived off** by CPC.
4. **Practical Position**
* **Legally**, surcharge & cess are applicable from 1 April 2013.
* **Operationally**, CPC systems applied these from October 2013 onwards.
5. **What should you do?**
* Deduct and deposit surcharge and education cess on TDS for payments made **from October 2013 onwards** to avoid issues.
* No need to worry for Q1 & Q2 (April-Sept 2013) if surcharge and cess were not deducted, as per CPC waiver.
---
### Summary:
| Period | Surcharge & Ed Cess on TDS |
| ------------------------ | ----------------------------------------------- |
| 01-Apr-2013 to Sept-2013 | Legally applicable but CPC waives non-deduction |
| From Oct-2013 onwards | Deduct and deposit compulsorily |
---
If you want, I can help draft a note or FAQ on this for your accounts/tax team. Would that help?
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