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Rate of tax in form 26Q/27EQ for non collection of tds/tcs

TDS 225 views 1 replies

Krishna Agarwal

BUSINESSMAN / PROFESSIONAL

33 Points Joined November 2014

While filling up the form 26Q/27EQ related to TDS/TCS, there can be instances where we do not deduct/collect tds/tcs from the supplier/customer because of reasons like (less than specified number of vehicles owned by transporter) / ( customer used the minerals for consumption and not for trading provided form 27C ).

In this case, when we fill the form in RPU, there is a column of rate of tax ..

What rate do we put here ? 0% ? or the rate which would have been used if the exemption conditions wouldn't have been met. say 1% in 194C or 206C.

I think the rate should be zero.. but i am not sure ..pls help

Attached File : 1369481 20221004031701 rate of tax.jpg downloaded: 10 times

Replies (1)

Asha Kanta Sharma

Manager - Finance & Accounts

58399 Points Joined June 2010

Hi Krishna! Your thinking is correct.

When you are not deducting or collecting TDS/TCS due to exemption conditions (like transporter owning less than specified vehicles or Form 27C submitted by the customer), in Form 26Q/27EQ, the rate of tax should be entered as 0%.

Here’s why:

The exemption means no tax is deducted/collected.
The tax rate field is to indicate the actual rate at which tax is deducted/collected.
Since no deduction/collection is made, the rate is 0%.

You don’t mention the hypothetical or standard rate (like 1%) in this case.

So in the RPU file or software, enter 0% as the rate of tax for such exempted transactions.