Guidelines for reporting TDS transactions where amount paid to deductee has not exceeded the threshold limit



Guidelines for reporting TDS transactions where amount paid to deductee has not exceeded the threshold limit in the first quarter but in subsequent quarters has exceeded threshold limit (as issued by the Directorate of Income Tax – Systems)

 

1. Flag “Y” should be selected in the field of ‘Reason for non deduction/ lower deduction/higher deduction/ threshold’ to highlight transactions where TDS is not deducted as the threshold for deducting tax has not exceeded.

2. If threshold flag is provided then rate of deduction should be ‘0.0000’ and tax deducted/ deposited (deductee) amount should be ‘0.00’.

3. Threshold flag is can be quoted only  against the following section codes in corresponding challan details:

4. 193,194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194G, 194H, 194I, 194J, 194LA

Example:

·         In case there is no deduction of tax in the first two quarters of a F.Y., where the prescribed rate of deduction as per Income Tax Rules is 10%, the deductor should report those transactions in the respective quarterly TDS statements with zero rate of deduction (‘0.0000’), zero tax deducted/ deposited (‘0.00’) and amount paid in the respective quarters with threshold flag.

·         In the third quarter the threshold limit exceeds, the deductor will mention the prescribed rate of deduction, the amount paid in the third quarter, tax deducted/ deposited (deductee) on the total amount paid till that quarter. The same is represented as follows:

 

PAN

Rate of
deduction
(%)

Amount
paid (Rs.)

Amount
deducted (Rs.)

Amount
deposited (Rs.)

Reason for non deduction /
lower deduction

Q1

         

PAN1

0.0000

1,00,000.00

0.00

0.00

Threshold flag 'Y' present

Q2

 

 

 

 

 

PAN1

0.0000

1,00,000.00

0.00

0.00

Threshold flag 'Y' present

Q3

 

 

 

 

 

PAN1

30.000

1,00,000.00

30,000.00

30,000.00

No flag present

 




News posted by

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

Comments :


More »


Popular News





CCI Pro



Company
27 August 2026
ACCOUNTANT

CHARUPREETI & CO

Noida

Graduate (Any)

View Details
Company
ARTICLESHIP 01 September 2026
Articles

Saini Pati Shah & Co LLP, Chartered Accountants

Mumbai

CA Foundation

View Details
Company
ARTICLESHIP 07 September 2026
CA Articles

Kothari Jain Patil & Chartered Accountants

Pune

CA Inter

View Details
Company
ARTICLESHIP 24 August 2026
Article Assistant

M/s.S.G.Salecha & Co.

Mumbai

CA Inter

View Details
Company
14 August 2026
Article Assistant CA Articleship

Eshwar & Co Chartered Accountants - Nungambakkam

Chennai

CA Inter

View Details
Company
ARTICLESHIP 17 August 2026
CA Article Trainee

ASC Group

Noida

CA Inter

View Details
Company
17 August 2026
Chartered Accountant with US GAAP Experience

Austin Med Solutions Pvt Ltd

Bengaluru

CA

View Details
Company
21 August 2026
Accountant

A G International

Kolkata

B.Com

View Details