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TDS on withdrawal from NSS a/c

2544 views 2 replies

K. R. Singhal

Retired Officer

39 Points Posted on 25 May 2010

Is post office justified in deducting cess (3% of TDS) along with TDS on withdrawal from NSS account?

I withdraw Rs. 70,000 from my NSS account. As per TDS rules, 20 per cent TDS is required to be deducted. As such post office should deduct Rs. 14,000 as TDS, but the post office deducted Rs. 14,420.

As per my information, education cess and secondary and higher education cess (at 3 per cent of TDS) are applicable for TDS purposes in the case of tax deduction from payment of salary to a resident or a non-resoident and also applicable in the case of payment or credit of any other sum to a non-resident or a foreign company. In no other case, education cess and secondary and higher education cess are applicable for TDS purposes.

What is your opinion?

Replies (2)

Rachit

Analyst

913 Points Posted on 25 May 2010

Yes your view is correct. As per provision 2(11) and 2(12) of the Finance Act 2009, education cess and secondary and higher education cess are applicable only to TDS on salaries and payments non-resident

K. R. Singhal

Retired Officer

39 Points Posted on 25 May 2010

This is a general practice in post office to deduct TDS and cess. When I spoke personally to post office officials, they did not listen to me and deducted additional Rs. 420. What steps should I take, so that such practice is stopped in future? Thanks.