TDS HOW TO MEET YOUR OBLIGATIONS CONTENTS 1
Transcription
TDS HOW TO MEET YOUR OBLIGATIONS CONTENTS 1
TDS HOW TO MEET YOUR OBLIGATIONS CONTENTS PAGE Chapter-heads I-5 1 DEDUCTION OF TAX AT SOURCE FROM SALARY 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 Annex Annex Annex Annex Annex Annex Annex Annex Scope and application of section 192 1 Who is to deduct tax at source in case of ‘salary’ income 3 How to compute tax deductible at source in certain cases 5 When tax is to be deducted 9 When tax is not to be deducted at source or to be deducted at source at lower rate 10 Effect of non-furnishing of PAN on rate of tax 13 Issues pertaining to computation of salary income 13 Option to employer to pay tax on perquisites provided to employee 19 Tax Deduction and Collection Account Number (TDCAN) 23 Deposit of tax to the credit of the Central Government 24 Issue of certificate/statement to employee 26 Furnishing of statements by employer to department 29 Credit for tax deducted at source 33 Returns 38 Consequences of failure to deduct or pay tax 39 Bar against direct demand on assessee [Section 205] 54 Payment of advance tax in case of receipt of income without deduction or collection of tax 55 Criminal complaint against employer for deducting tax at source 55 1.1 Specimen application to Assessing Officer for allowing the employer to deduct tax at source quarterly 56 1.2 Procedure for Regulating Refund of Amounts Paid in excess of tax Deducted and/or Deductible - Position upto 31-3-2010 57 1.3 Gist of some relevant CBDT’s Circulars 59 1.4 Circular No. 5/2011, dated 16-8-2011 61 1.5 Circular No. 2/2007, dated 21-5-2007 72 1.6 Press Release dated 1-4-2008 73 1.7 Certificate of lower deduction or non-deduction of tax at source - Where approval of Commissioner (TDS) is required before issuing certificate 75 1.8 Issue of certificate of lower deduction or non-deduction of tax at source under section 197 and certificate for lower collection of income-tax under section 206C(9) in electronic format 76 2 DEDUCTION OF TAX AT SOURCE FROM INTEREST ON SECURITIES 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 Scope and application of section 193 77 Who is responsible to deduct tax at source 80 When payment is made to Government, etc. 80 Effect of non-furnishing of PAN on rate of tax 80 When tax to be deducted 81 When no tax need to be deducted or tax may be deducted at lower rate Special provisions for certain entities 86 Tax Deduction and Collection Account Number (TDCAN) 88 Deposit of tax to the credit of the Central Government 88 Certificate/statement for tax deducted at source 90 Furnishing of statements by tax deductor to department 92 Credit for tax deducted at source 97 Returns 99 Consequences of failure to deduct or pay tax, etc. 100 82 Annex 2.1 Circular No. DGBA. CDD. No. H-1311/13.01.299/2008-09, dated 5-8-2008 102 Annex 2.2 Circular No. 7/2008, dated 1-8-2008 105 Annex 2.3 Issuance of TDS Certificates in Form No. 16A downloaded from TIN Website 106 3 DEDUCTION OF TAX AT SOURCE FROM DIVIDENDS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 Scope and application of section 194 110 When payment is made to Central Government, etc. 116 Who is to deduct tax at source 116 Effect of non-furnishing of PAN on rate of tax 116 When tax to be deducted at source 117 When no tax to be deducted or tax to be deducted at lower rate Tax Deduction and Collection Account Number (TDCAN) 120 Deposit of tax to the credit of the Central Government 120 Certificate/statement of tax deducted at source to shareholder Furnishing of statements by tax deductor to department 124 Credit for tax deducted at source 128 Returns to be submitted 131 Consequence of failure to deduct or pay tax, etc. 131 4 DEDUCTION OF TAX AT SOURCE FROM INTEREST OTHER THAN INTEREST ON SECURITIES 4.1 4.2 4.3 Scope and effect of section 194A What is interest Payees which are covered by section 194A 132 135 145 118 122 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 Annex Annex Annex Annex Conditions to be satisfied for application of section 194A 146 Who is to deduct tax at source 146 When payment is made to Government 150 Effect of non-furnishing of PAN or rate of tax 150 When tax is to be deducted 151 When no tax to be deducted or tax to be deducted at lower rate 152 Adjustments under section 194A(4) 157 Tax Deduction and Collection Account Number (TDCAN) 158 Deposit of tax to credit of Central Government 158 Certificate/statement for tax deducted at source 161 Furnishing of statements by tax deductor to department 163 Credit for tax deducted at source 167 Returns to be submitted 167 Consequences of failure to deduct or pay tax, etc. 169 4.1 Notified institutions under section 194A(3)(iii)(f) 171 4.2 Circular Ref. No. DGBA.CDD.H-10566/15/5/001/2008-09, dated 5-6-2009 4.3 Circular No. 3/2010, dated 2-3-2010 175 4.4 Tax deduction at source on the deposits in banks in the name of the Registrar/Prothonotary and Senior Master attached to the Supreme Court/High Court etc. during the pendency of litigation of claim/compensation 176 5 DEDUCTION OF TAX AT SOURCE FROM WINNINGS FROM LOTTERY OR CROSSWORD PUZZLE 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 Scope and application of section 194B Who is responsible for making deduction of tax at source When payment is made to Government Effect of non-furnishing of PAN on rate of tax When tax is to be deducted Tax Deduction and Collection Account Number (TDCAN) Deposit of tax to the credit of the Central Government Certificate/statement for tax deducted at source Furnishing of statements by tax deductor to department Credit for tax deducted at source Returns to be submitted Consequences of failure to deduct or pay tax, etc. 179 184 185 185 185 186 186 188 190 194 194 195 6 DEDUCTION OF TAX AT SOURCE FROM WINNINGS FROM HORSE RACES 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Scope and application of section 194BB Who is to deduct tax at source When payment is made to Government, etc. Effect of non-furnishing of PAN on rate of tax When tax to be deducted at source Tax Deduction and Collection Account Number (TDCAN) Deposit of tax to the credit of the Central Government Certificate/statement for tax deducted at source 196 197 197 198 198 198 198 201 174 6.9 6.10 6.11 6.12 Furnishing of statements by tax deductor to department Credit for tax deducted at source Returns to be submitted Consequences of failure to deduct or pay tax, etc. 203 207 207 208 7 DEDUCTION OF TAX AT SOURCE FROM PAYMENTS TO CONTRACTORS/SUB-CONTRACTORS 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 Annex Annex Annex Annex Scope and application of section 194C 209 What payments are covered by section 194C 215 Meaning of ‘any work’ 216 Departmental clarifications on various issues 222 Judicially decided issues 228 General exemptions 237 When payment is made to Government 238 Who is responsible to deduct tax ? 238 Effect of non-furnishing of PAN on rate of tax 238 When tax to be deducted ? 239 When no tax need to be deducted or tax may be deducted at lower rate 239 Special provisions for certain entities 241 Whether in case of composite work deduction of tax at source is to be made on net payment (after excluding cost of materials supplied by Government) 243 Tax Deduction and Collection Account Number (TDCAN) 245 Deposit of tax to the credit of the Central Government 246 Certificate/statement for tax deducted at source 248 Furnishing of statements by tax deductor to department 250 Credit for tax deducted at source 255 Returns to be submitted 255 Consequences of failure to deduct or pay tax, etc. 255 7.1 Circular No. 681, dated 8-3-1994 257 7.2 Circular No. 715, dated 8-8-1995 262 7.3 Circular No. 13/2006, dated 13-12-2006 268 7.4 Circular No. 6/2006, dated 23-6-2006 269 8 DEDUCTION OF TAX AT SOURCE FROM INSURANCE COMMISSION 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 Scope and application of section 194D Who is responsible to deduct tax at source When payment is made to Government, etc. Effect of non-furnishing of PAN on rate of tax When tax to be deducted When tax not to be deducted or deducted at lower rate Special provisions for certain entities Tax Deduction and Collection Account Number (TDCAN) Deposit of tax to the credit of the Central Government Certificate/statement for tax deducted at source Furnishing of statements by tax deductor to department 270 274 274 274 275 275 277 277 277 280 282 8.12 Credit for tax deducted at source 8.13 Returns to be submitted 8.14 Consequences of failure to deduct or pay tax, etc. 286 286 287 9 DEDUCTION OF TAX AT SOURCE FROM PAYMENTS QUA DEPOSITS UNDER NSS 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 What payments are covered by section 194EE Who is responsible to deduct tax Effect of non-furnishing of PAN on rate of tax When tax to be deducted When no tax to be deducted at source Tax Deduction and Collection Account Number (TDCAN) Deposit of tax to the credit of the Central Government Certificate/statement for tax deducted at source Furnishing of statements by tax deductor to department Credit for tax deducted at source Returns to be submitted Consequences of failure to deduct or pay tax, etc. 288 288 288 289 289 291 291 293 296 300 300 300 10 DEDUCTION OF TAX AT SOURCE FROM PAYMENTS ON ACCOUNT OF REPURCHASE OF UNITS BY MUTUAL FUNDS OR UNITS BY UTI 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 Scope and application of section 194F What payments are covered Who is to deduct tax at source When tax to be deducted Deposit of tax to credit of Central Government Tax Deduction and Collection Account Number (TDCAN) Certificate/statement for tax deducted at source Furnishing of statements to department Credit for tax deducted at source Returns to be submitted Consequences of failure to deduct or pay tax, etc. 301 301 303 303 303 303 303 303 303 303 304 11 DEDUCTION OF TAX AT SOURCE FROM COMMISSION ON SALE OF LOTTERY TICKETS 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 Scope and application of section 194G 305 Who is responsible to deduct tax 306 Effect of non-furnishing of PAN on rate of tax 306 When tax to be deducted 307 When no tax need to be deducted or tax may be deducted at lower rate Special provisions for certain entities 309 Tax Deduction and Collection Account Number (TDCAN) 309 Deposit of tax to the credit of the Central Government 310 Certificate/statement for tax deducted at source 312 307 11.10 11.11 11.12 11.13 Furnishing of statements by tax deductor to department Credit for tax deducted at source Returns to be submitted Consequences of failure to deduct or pay tax, etc. 314 318 318 319 12 DEDUCTION OF TAX AT SOURCE FROM COMMISSION OR BROKERAGE PAYMENTS 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 Annex Annex Scope and effect of section 194H 320 Meaning of ‘commission or brokerage’ 321 Monetary limit on payment 331 Payers who are covered by section 194H 332 Payees who are covered by section 194H 333 Conditions to be satisfied for the applicability of section 194H Who is to deduct tax at source 334 When payment is made to Government, etc. 334 Effect of non-furnishing of PAN on rate of tax 334 When tax is to be deducted at source 334 When no tax need be deducted or tax be deducted at lower rate335 Special provisions for certain entities 337 Tax Deduction and Collection Account Number (TDCAN) 338 Deposit of tax to the credit of the Central Government 338 Certificate/statement for tax deducted at source 341 Furnishing of statements by tax deductor to department 343 Credit for tax deducted at source 348 Returns to be submitted 348 Consequences of non-deduction/short deduction of tax at source 12.1 Instruction No. 3/2009, dated 8-5-2009 12.2 Letter F. No. 275/70/2009-IT(B), dated 22-12-2009 13 DEDUCTION OF TAX AT SOURCE FROM RENT PAYMENTS 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11 13.12 13.13 13.14 13.15 Scope and effect of section 194-I 352 Rent, meaning of 353 Monetary limit on rent 355 Departmental clarifications 356 Judicial rulings 358 Payers who are covered by section 194-I 363 Payees who are covered by section 194-I 365 Conditions to be satisfied for applicability of section 194-I365 Who is to deduct tax at source 365 When payment is made to Government, etc. 365 When tax to be deducted at source 366 When no tax need be deducted or tax be deducted at lower rate366 Special provisions for certain entities 368 Rate of tax 370 Effect of non-furnishing of PAN on rate of tax 371 333 348 350 351 13.16 13.17 13.18 13.19 13.20 13.21 13.22 Annex Annex Annex Tax Deduction and Collection Account Number (TDCAN) 371 Deposit of tax to the credit of the Central Government 371 Certificate/statement for tax deducted at source 373 Furnishing of statements by tax deductor to department 376 Credit for tax deducted at source 380 Returns to be submitted 381 Consequences for non-deduction/short deduction of tax at source 13.1 Circular No. 5/2002, dated 30-7-2002 13.2 Circular No. 1/2008, dated 10-1-2008 13.3 Circular No. 4/2008, dated 28-4-2008 381 383 385 386 14 DEDUCTION OF TAX AT SOURCE FROM FEES FOR PROFESSIONAL OR TECHNICAL SERVICES 14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.7A 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22 Annex Annex Scope and effect of section 194J 387 Payments covered by section 194J 388 Meaning of ‘professional services’ 389 Meaning of Technical Services 394 Meaning of Royalty 403 Meaning of ‘Non-compete Fees’ 404 Monetary limit upto which tax is not deductible 404 Remuneration/fees/commission paid to company directors 405 Payers who are covered by section 194J 405 Payees who are covered by section 194J 407 Conditions to be satisfied for application of section 194J 407 Who is to deduct tax at source 407 Effect of non-furnishing of PAN on rate of tax 408 When tax is to be deducted at source 408 When no tax need be deducted or deducted at lower rate 408 Special provisions for certain entities 410 Tax Deduction and Collection Account Number (TDCAN) 412 Deposit of tax to the credit of Central Government 412 Certificate/statement for tax deducted at source 414 Furnishing of statements by tax deductor to department 417 Credit for tax deducted at source 421 Returns to be submitted 421 Consequences of non-deduction/short deduction of tax at source 421 14.1 Circular F. No. 275/73/2007-IT(B), dated 30-6-2008 423 14.2Circular No. 8/2009 [F. No. 385/08/2009-IT(B)], dated 24-11-2009 15 DEDUCTION OF TAX AT SOURCE FROM INCOME FROM MUTUAL FUNDS/UTI 15.1 Scope and effect of section 194K 426 16 DEDUCTION OF TAX AT SOURCE ON PAYMENT OF COMPENSATION ON ACQUISITION OF CERTAIN 424 IMMOVABLE PROPERTY 16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 16.9 16.10 16.11 16.12 16.13 16.14 16.15 16.16 Scope of the provision 427 Payers covered 430 Payees covered 430 Effect of non-furnishing of PAN on rate of tax 431 Threshold limit upto which no deduction shall be made 431 Who is to deduct tax at source 432 When to deduct tax at source 432 When no tax deducted at source or tax to be deducted at lower rate 433 Special provisions for certain entities 434 Tax Deduction and Collection Account Number (TDCAN) 436 Deposit of tax to the credit of the Central Government 436 Certificate/statement for deduction of tax at source 438 Furnishing of statements by tax deductor to department 440 Credit for tax deducted at source 445 Returns to be submitted 445 Consequences of non-deduction/short deduction/non-payment of tax at source 445 17/18 DEDUCTION OF TAX AT SOURCE FROM INCOME BY WAY OF INTEREST FROM INFRASTRUCTURE DEBT FUND 17/18.1 Scope and application of section 194LB 446 17/18.2 What is the payment covered by section 194LB 446 17/18.3 Who is the payer 446 17/18.4 Who is the payee 447 17/18.5 When tax is to be deducted at source 447 17/18.6 Tax Deduction and Collection Account Number (TDCAN) 447 17/18.7 Deposit of tax to credit of Central Government 447 17/18.8 Certificate for tax deducted at source 447 17/18.9 Furnishing of statements by the deductor to the department447 17/18.10 Credit for tax deducted at source 17/18.11 Consequences of failure to deduct or pay tax etc. 447 447 19 DEDUCTION OF TAX AT SOURCE FROM PAYMENTS TO NON-RESIDENTS 19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 19.9 19.10 19.11 Scope of this Chapter 448 Scope of section 195 448 Conditions to be satisfied to apply section 195 449 Payers who are covered by section 195 449 Payees who are covered by section 195 450 What kind of payments are covered 452 Sum chargeable under the Act 454 Who is to deduct tax at source 456 Effect of non-furnishing of PAN on rate of tax 456 When tax to be deducted at source 456 When no tax need to be deducted or tax may be deducted at lower rate 457 19.12 19.13 19.14 19.15 19.16 19.17 19.18 19.19 19.20 19.21 19.22 19.23 19.24 19.25 19.26 19.27 19.28 19.29 19.30 19.31 19.32 19.33 19.34 19.35 19.36 Annex Annex Annex Annex Special provisions for certain entities 460 Tax Deduction and Collection Account Number (TDCAN) 462 Deposit of tax to the credit of the Central Government 462 Certificate/statement for tax deducted at source 464 Furnishing of statements by tax deductor to department 466 Credit for tax deducted at source 472 Consequences of failure to deduct or pay tax, etc. 472 Procedure for refund to tax deductor 473 Scope and application of section 194E 473 Who is to deduct tax at source 477 When tax is to be deducted at source 477 Effect of private arrangement whereunder tax liability of payee will be borne by payer 477 Tax to be deducted at lower rate or not to be deducted at all 477 Tax Deduction and Collection Account Number (TDCAN) 477 Deposit of tax to credit of Central Government 477 Certificate for tax deducted at source 477 Furnishing of quarterly statements by the deductor to department 477 Credit for tax deducted at source 477 Consequences of failure to deduct or pay tax, etc. 477 Scope and application of section 194LC 478 Deposit of tax to credit of Central Government 479 Certificate for tax deducted at source 479 Furnishing of quarterly statements by the deductor to the department 479 Credit for tax deducted at source 479 Consequences of failure to deduct or pay tax etc. 479 19.1Procedure for refund of tax deducted at source under section 195 to the person deducting the tax 480 19.2 Circular No. 4/2009, dated 29-6-2009 484 19.3Procedure for furnishing information under sub- section (6) of section 195 (new Form 15CA) 486 19.4Circular No. 9/2009 [F. No. 142/19/2007-TPL], dated 30-11-2009 489 20 DEDUCTION OF TAX AT SOURCE FROM INCOME IN RESPECT OF UNITS OF NON-RESIDENTS 20.1 Scope and effect of section 196A 490 21 DEDUCTION OF TAX AT SOURCE FROM INCOME FROM UNITS OF OFF-SHORE FUNDS 21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 Scope and application of section 196B 491 Who is to deduct tax at source 492 When tax is to be deducted at source 492 When no tax can be deducted or tax be deducted at lower rate492 Tax Deduction and Collection Account Number (TDCAN) 492 Deposit of tax to credit of Central Government 492 Certificate for tax deducted at source 492 Furnishing of quarterly statements by the deductor 492 21.9 Credit for tax deducted at source 21.10 Consequences of failure to deduct or pay tax, etc. 493 493 22 DEDUCTION OF TAX AT SOURCE ON INCOME FROM FOREIGN CURRENCY BOND OR GLOBAL DEPOSITORY RECEIPTS OF INDIAN COMPANY 22.1 22.2 22.3 22.4 22.5 22.6 22.7 22.8 General When tax is to be deducted Tax Deduction and Collection Account Number (TDCAN) Deposit of tax to the credit of Central Government Issue of certificate for tax deduction Furnishing of quarterly statements by the deductor Credit for tax deducted at source Consequences of failure to deduct or pay tax, etc. 494 495 495 495 495 495 495 495 23 DEDUCTION OF TAX AT SOURCE FROM INCOME OF FOREIGN INSTITUTIONAL INVESTORS FROM SECURITIES 23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8 Scope of provisions When tax is to be deducted Tax Deduction and Collection Account Number (TDCAN) Deposit of tax to the credit of Central Government Issue of certificate for tax deduction Furnishing of quarterly statements by the tax deductor Credit for tax deducted at source Consequences of failure to deduct or pay tax, etc. 496 496 496 497 497 497 497 497 24 TAX COLLECTION AT SOURCE 24.1 24.2 24.3 24.4 24.5 24.6 24.7 24.7A 24.8 24.9 24.10 24.11 24.12 24.13 24.14 24.15 Who is responsible to collect tax at source under section 206C 498 Specified goods 498 Who is a ‘seller’ 499 Who is a ‘buyer’ 500 Certain lessors/licensors are also covered 504 Cash sale of jewellery 505 General exemption 505 When tax has to be collected at source 505 Rate at which tax is to be collected 506 Goods utilised for manufacturing/processing is not subject to tax collection 508 Tax Deduction and Collection Account Number (TDCAN) 509 Deposit of tax 511 Issue of certificate/statement to buyer/licensee/lessee 512 Furnishing of statements by tax collector to department 513 Credit for tax collected at source 516 Returns 518 24.16 Consequence of failure to collect tax 518 24.17 Payment of advance tax in case of receipt of income without deduction or collection of tax 520 Annex 24.1Instruction No. 4/2010 [F. No. 275/23/2007-IT(B)], dated 21-7-2010 521 25 QUOTING OF PAN IN TDS/TCS TRANSACTIONS 25.1 25.2 25.3 25.4 25.5 Intimating PAN to tax deductor/tax collector 522 Quoting of PAN by tax deductor 522 Quoting of PAN by tax collector 523 Penalty for failure to comply with the provisions of section 139A Effect of non-furnishing of PAN 523 APPENDIX TDS TAX RATES & TAX TABLES TDS RATES FOR FINANCIAL YEAR 2012-13 527 RATES FOR TAX COLLECTION AT SOURCE FOR FINANCIAL YEAR 2012-13 532 TAX RATES FOR ASSESSMENT YEAR 2013-14 533 TDS TAX TABLES 534 523