Professional Documents
Culture Documents
TDS Update Practical Issues Speech MR DR Venkatesh CA
TDS Update Practical Issues Speech MR DR Venkatesh CA
BASICS
Status of Deductor/Payer
Any Person .
o Tax Payer o Agriculturist o Charitable/ Educational Institutions
2
BASICS
Individual / HUF
o Whose turnover o Exceed the monetary limits specified under clause (a) or clause (b) of Section 44AB o During the financial year immediately
3
total
sales,
gross
receipts
or
BASICS
Status of Recipient/Payee o Rate of Deduction o Government o Applicability of surcharge
BASICS
Residential status of Recipient/Payee
BASICS
Nature of expenditure
o In the hands of the deductor payment / Debit may be towards Capital Expenditure Revenue Expenditure Reimbursement of Expenses
6
BASICS
When to deduct
o Payment o Credit
BASICS
Rate of Deduction
o Tax rate
Remittance Deductor
o Without Challan
BASICS
o Others
During the year payment Year end provisions
Quarterly Returns
Rule 31A Statement of deduction of tax - Form No. 24Q Salary - Form No. 26Q all other deductees - From No. 27Q deductees non- resident
30th June 30th September 31st December 31st March On or before 15th July On or before 15th October On or before 15th January On or before 15th May
10
E-filing compulsory Deductor - Government - Company - Person who is required gets his accounts audited U/s 44AB in the immediately preceding financial year - Number of deductees are twenty or more in any quarter of the financial 11 year
Certificates
Form No.16 Annual on or before May 31, Form No.16A Quarterly Within 15 days from the due date of furnishing the Statement of TDS
12
(i) At the rate specified in the relevant provisions of this Act or (ii) At the rate or rates in force or (iii) At the rate of 20% Section 206AA(2) - No declaration u/s 197A(1), 197A(1A) & 197A(1C) shall be valid unless the person furnishes his PAN in such declaration (Form 15G & 15H)
15
Subsection (3) -In case any declaration becomes invalid U/s 206AA(2), the deductor shall deduct TDS in accordance with provisions of Section 206AA(1) Subsection (4) - No certificate U/s 197 shall be granted unless the application made under that section contains the PAN of the applicant
16
Subsection (5) The deductee shall furnish his PAN to the deductor the and same both in shall all and indicate
17
Subsection (6) -Where PAN provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that deductee has not furnished his PAN to the deductor and the provision of Section 206AA(1) shall apply accordingly
18
19
on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and . at 1.5% for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually 20 paid.
Circulars/Notifications
Notification No.28/2009 Income Tax (Sixth Amendment) Rules, 2009 W.e.f April 1, 2009 New Rule 37BA, 37I Credit for tax deducted at source for the purpose of sec 199(3) On the basis of information relating to deduction of tax furnished by the deductor to the income tax authority or the person authorized by such authority
21
Form No. 26AS Section 203AA Rule 37AB Statement issued on behalf of Income Tax Department Details of Tax indicated based on the data submitted by the deductor Due Date for sending this statement is July 31 every year Form 26AS consists of: - General Information - Part A : Details of TDS - Part B : Details of TCS - Part C : Details of Tax Paid, other than TDS/TCS 22 Details of Refund Granted
Circulars/Notifications
Notification No.30/2009 Income Tax (Seventh Amendment) Rules, 2009 W.e.f July 1, 2009 New Rules 37BB Furnishing of information u/s 195(6) Form No. 15CA Information shall be furnished electronically to the website designated by the IT Department prior to remitting the payment Form No. 15CB Certificate of Accountant
23
Circular 11,2010
No.
1/2010
dated
January
-Income tax deductions from salaries u/s 192 during the F.Y 2009-10.
Circulars/Notifications
Circular No. 4/2008 dated April 28, 2008 Clarification regarding service tax should be excluded for TDS u/s 194I Clarificatory Circular No. 275/73/2007 dated June 30, 2008 Clarification regarding service tax should be included for TDS u/s 194J
25
U/s 194I
Rent Service Tax Total TDS on Rs. 100,000 Rs. 10,300 Rs. 110,300 Rs. 100,000
U/s 194J
Fees Service Tax Total TDS on Rs. 100,000 Rs. 10,300 Rs. 110,300 Rs. 110,300
26
Any income by way of 194A 194B 194BB 194D 194E 194G 194H 194I
27
Issues - General
The entries passed in books of accounts for MIS purposes. Examine the applicability of chapter XVII - B
28
Issues General
Excess/Short deduction Excess/Short Remittance - Adjustment - With in the quarter. - With in the financial year
29
Issues - General
Defaults
o o o o o Non deduction Short deduction Non remittance Short remittance Delay in remittance
30
Issues - General
Consequences
o o o o Interest Penalty Prosecution Amount not deductible
31
Issues - General
M/s X Private Limited paid statutory audit fee of Rs.1,00,000/- in cash during the accounting year 2009 2010 with out deduction of tax at source. For Assessment year 201011, Examine the
32
Issues Specific
M/s A limited has given turnkey project to B Limited for setting the data centre in their premises for 3 Crore plus applicable taxes. B Limited raised the invoice which is as follows:
____________________________________________________________________________________
Invoice Towards setting data centre Add: VAT @12.5%(on 75% of the value) Add: Service Tax @12.36% (33% of the value) - 3,00,00,000 28,12,500 12,23,640 ----------------3,40,36,140 -----------------
____________________________________________________________________________________________________________________________________
Issue 1 : Issue 2 :
M/s A Limited propose to deduct the Tax on 33% of contract value. Whether TDS should be made including Service Tax and VAT?
33
Issues Specific
Commission Or Brokerage
o Discount/Rebate/Incentive o Commission paid to partners on percentage of export sales
34
Issues Specific
Rent
o Advance Rent of Rs. 5 Lakhs paid for next 5 Financial years on 30.06.2009 o Rent of Rs.5 lakhs paid to 5 co-owners o Warehousing Charges o Cooling Charges paid to cold storage owners
35
Issues Specific
M/s King fisher Airlines paid landing fee and parking fee of Rs.10 Crores to Airport authorities during the accounting year 2009 - 10. M/s Kingfisher Airlines proposes to deduct tax at source:194C or 194I ? Rent paid to owner as a percentage of sales. Tenants in a commercial complex following payments are made to the owner:- Rent - Maintenance charges - Power & Water charges re-imbursements.
36
Issues Specific
M/s X Limited has paid interest free refundable deposit of Rs.100 lakhs to M/s Y Limited. M/s Y Limited allowed M/s X limited to use the building without rent. Assessing Officer observed that this arrangement is only to avoid the TDS and he propose to invoke the provisions of Section 194A in the case of M/s Y Limited and Section 194I in the case of M/s X Limited.
37
Issues Specific
Fees for professional services
o Is TDS to be effected U/s 194J on the gross amount of bill including service tax and reimbursement of expenses or the fees only?
38
Issues Specific
Audit Fee Service Tax & Cess Reimbursement of expenses Total Rs. 1,00,000 Rs. 10,300 Rs. 50,000 Rs. 1,60,300
39
41
Conclusion
Duty / Responsibility under chapter XVII B cannot be bypassed
42
Conclusion
Method of accounting
o
o o
43
Conclusion
GOLDEN PRINCIPLES Applicability Rate Deduction & Remittance Planning
44
Finally
Deduct and remit Without failure
Then
46
Thank You
47