Lower tax deduction as per certificate received u/s 197(1)

TDS 234 views 2 replies

Gayatri N

student

138 Points Joined July 2012

Hello,

We deduct tds towards lease payment made to party at 2% but now the party has issued us the certificate for lower deduction of TDS @ 0.03% which is valid from Oct 2016 to Mar 2017 and in the certificate even the amount is quoted wherein it is mentioned that if at all the payment is made above the given slab suppose amount is of Rs.4,00,000 then tds will be applicable @ 2%. So in such case will we have to calculate the amount payable to party from April 2016 or only on the amounts which are payable after October 2016 that is from Certificate validation.

Kindly guide as in the given case if the amount payable is calculated from April 2016 then it crosses the limit of certificate and if we calculate it from certificate date then it does not cross the limit.

Replies (2)

CMA Poornima Madhava

CMA

13117 Points Joined May 2009

Since the validity of the certificate itself starts from Oct, you need to consider transactions within the period of validity of certificate. Moreoever, in respect of transactions prior to Oct, you would have deducted full rate of tax at source and hence I think there is no need to club them.

HITESH DARUWALA

Accountant

26 Points Joined June 2014

Hello

I had a query regarding lower tds deduction when certificate u/s 197 is issued. We had deducted tds @ 10 u/s 194j for the period april 17 to jan 2018. Now during feb 2018 party had forwarded certificate u/s 197 stating lower tds deduction for the period April 17 to mar 2018. My query is as we had already deducted & deposied tds @ 10% and also issued form 16a for the period april 17 to dec 2017. should we revised tds return by tds % specifed in certificate ? Secondly should we deduct Tds as per certificate from feb 2018 onwards till march 2018 or deduct tds @ 10% as already deducted prior to feb 2018 ?

Request you to kindly adivce for the same

Thanks in advance

Hitesh