• Sep
  • 27
  • 2015

FAQs on Tax Deducted at Source (TDS)

Article ID 17519 | Posted In Income Tax | , | 121 Comments » Print Friendly and PDF

What is tax deducted at source?

For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called as “Tax Deducted at Source”, commonly known as TDS. Under this system tax is deducted at the origin of the income. Tax is deducted by the payer and is remitted to the Government by the payer on behalf of the payee.

The provisions of deduction of tax at source are applicable to several payments such as salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. In respect of payments to which the TDS provisions apply, the payer has to deduct tax at source on the payments made by him and he has to deposit the tax deducted by him to the credit of the Government. The following illustration will explain the TDS mechanism.

Illustration 

Mr. Raja has made a fixed deposit with XYZ Bank. Annual interest on the deposit is Rs. 8,40,000. Will the bank be liable to deduct any tax from the interest paid to Mr. Raja?

**

Interest on fixed deposit is covered under the TDS mechanism and, hence, the bank has to deduct tax from interest and has to pay the net interest to Mr. Raja.

The rate of TDS on interest is 10% and, hence, the bank will deduct tax of Rs. 84,000 from the interest and will pay the net interest of Rs. 7,56,000 (i.e., Rs. 8,40,000 – Rs. 84,000) to Mr. Raja.

The TDS of Rs. 84,000 will be paid by the bank to the Government and Rs. 84,000 will be treated as prepaid tax of Mr. Raja and he can claim tax credit of Rs. 84,000 just like advance tax at the time of filing his return of income.

The above mechanism of deducting the tax at the point of generation of income is called TDS mechanism. ​

​What are the payments covered under the TDS mechanism?​​​

Tax is deductible at source at the rates given in table (infra). If PAN of the deductee is not intimated to the deductor, tax will be deducted at source by virtue of section 206AA either at the rate given in the table or at the rate of 20 per cent, whichever is higher. Further, under section 94A(5), if payment or credit is made or given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate given in the table or at the rate of 30 per cent, whichever is higher. TDS rates for the financial year 2014-15 are as follows—

CATEGORY A – WHEN RECIPIENT IS RESIDENT
Nature of payment TDS (SC : Nil,

EC : Nil,

SHEC : Nil)

Sec. ​192 – Payment of salary [normal tax rates are applicable – SC : 10% (if net income exceeds Rs. 1 crore), EC : 2% and SHEC : 1%]

Sec. 193 – Interest on securities—

 a.  interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company [not being listed securities in demat form], (c) any security of the Central or State Government [i.e., 8% Savings (taxable) Bonds, 2003, but not any other Government security]

10

 b.  any other interest on securities (including interest on non-listed debentures)

10
Sec. 194 – Dividend—
 a.  deemed dividend under section 2(22)(e) 10
 b.  any other dividend Nil
Sec. 194A – Interest other than interest on securities 10
Sec. 194B – Winnings from lottery or crossword puzzle or card game or other game of any sort 30
Sec. 194BB – Winnings from horse races 30
Sec. 194C – Payment or credit to a resident contractor/sub-contractor—
 a.  payment/credit to an individual or a Hindu undivided family 1
 b.  payment/credit to any person other than an individual or a Hindu undivided family 2
Sec. 194D – Insurance commission 10
Sec. 194DA – Payment in respect of life insurance policy (applicable from October 1, 2014) 2%
Sec. 194EE – Payment in respect of deposits under National Savings Scheme, 1987 20
Sec. 194F – Payment on account of repurchase of units of MF or UTI 20
Sec. 194G – Commission on sale of lottery tickets 10
Sec. 194H – Commission or brokerage 10
Sec. 194-I – Rent—
 a.  rent of plant and machinery 2
 b.  rent of land or building or furniture or fitting 10
Sec. 194-IA​ – Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land) 1
Sec. 194J – Professional fees, technical fees, royalty or remuneration to a director 10
Sec. 194LA – Payment of compensation on acquisition of certain immovable property 10
Sec. 194LBA(1) – Payment of the nature referred to in section 10(23FC) by business trust to resident unit holders (applicable from October 1, 2014) 10%

CATEGORY B – WHEN RECIPIENT IS NON-RESIDENT OR FOREIGN COMPANY

Aggregate payment or credit subject to TDS during the financial year 2014-15
If recipient is non-resident non-corporate person
If recipient is non-domestic company
Rs. 1 crore or less
More than Rs. 1 crore
Rs. 1 crore or less
More than Rs. 1 crore but not more than Rs. 10 crore
More than Rs. 10 crore
Nature of payment
TDS (inclusive of SC : Nil, EC : 2%, SHEC : 1%)
TDS (inclusive of SC : 10%, EC : 2%, SHEC : 1%)
TDS (inclusive of SC : Nil, EC : 2%, SHEC : 1%)
TDS (inclusive of SC : 2%, EC : 2%, SHEC : 1%)
TDS (inclusive of SC : 5%, EC : 2%, SHEC : 1%)
Sec. 192 – Payment of salary [normal tax rates are applicable – SC : 10% (if net income exceeds Rs. 1 crore), EC : 2% and SHEC : 1%]
Sec. 194B – Winnings from lottery or crossword puzzle or card game or other game of any sort
30.9
33.99
30.9
31.518
32.445
Sec. 194BB – Winnings from horse races
30.9
33.99
30.9
31.518
32.445
Sec. 194E – Payment to a non-resident foreign citizen sportsman/entertainer or non-resident sports association
20.6
22.66
20.6
21.012
21.63
Sec. 194EE – Payment in respect of deposits under National Saving Scheme, 1987
20.6
22.66
NA
NA
NA
Sec. 194F – Re-purchase of units of MF or UTI
20.6
22.66
NA
NA
NA
Sec. 194G – Commission on sale of lottery tickets
10.3
11.33
10.3
10.506
10.815
Sec. 194LB – Payment/credit by way of interest by infrastructure debt fund
5.15
5.665
5.15
5.253
5.4075
Sec. 194LBA(2) – Payment of the nature referred to in ​section 10(23FC) by business trust to unit holders (applicable from October 1, 2014)
5.15
5.665
5.15
5.253
5.4075
Sec. 194LC – Payment/credit of interest by an Indian specified company on foreign currency approved loan/long-term infrastructure bonds (with effect from October 1, 2014, any bond) from outside India
5.15
5.665
5.15
5.253
5.4075
Sec. 194LD – Interest on a rupee denominated bond of an Indian company or Government security (from June 1, 2013)
5.15
5.665
5.15
5.253
5.4075
Sec. 195 – Payment/credit of other sum to a non-resident —
a. income of foreign exchange assets payable to an Indian citizen
20.6
22.66
NA
NA
NA
b. income by way of long-term capital gains referred to in section 115E or section 112(1)(c)(iii)
10.3
11.33
10.3
10.506
10.815
c. short-term capital gains under section 111A
15.45
16.995
15.45
15.759
16.2225
d. any other long-term capital gains [not being covered by ​196D ​section 10(33), 10(36) and 10(38)]
20.6
22.66
20.6
21.012
21.63
e. income by way of interest payable by Government/Indian concern on money borrowed or debt incurred by Government or Indian concern in foreign currency (not being interest referred to in section 194LB or 194LC or 194LD)
20.6
22.66
20.6
21.012
21.63
f. royalty [see Note 5]
25.75
28.325
25.75
26.265
27.0375
g. royalty [not being royalty of the nature referred to in (f) supra] [see Note 6] –
□ where the agreement is made after March 31, 1961 but before April 1, 1976
30.9
33.99
51.5
52.53
54.075
□where the agreement is made on or after April 1, 1976
25.75
28.325
25.75
26.265
27.0375
h. fees for technical services [see Note 7] –
□ where the agreement is made after February 29, 1964 but before April 1, 1976
30.9
33.99
51.5
52.53
54.075
□ where the agreement is made on or after April 1, 1976
25.75
28.325
25.75
26.265
27.0375
i. any other income
30.9
33.99
41.20
42.024
43.26
Sec. 196B – Payment/credit of income from units (including long-term capital gains on transfer of such units) to an offshore fund
10.3
11.33
10.3
10.506
10.815
Sec. 196C – Payment/credit of interest of foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend referred to in section 115-O)
10.3
11.33
10.3
10.506
10.815
​Sec. 196D – Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors
20.6
22.66
20.6
21.012
21.63

Notes :

  1. Under sections 192​ tax is deductible from salary. The payer shall calculate salary taxable in the hands of recipient. The amount so determined is subject to tax deduction under sections 192. Under section 195, tax is deductible only if income is taxable in the hands of recipient in India. In any other case, gross payment is subject to tax deduction.
  2. In Category B, tax is deductible at the above rates or the rates specified in ADT agreements entered into by the Central Government under section 90 (whichever is lower) [ section 2(37A)(iii)].
  3. Tax is not deductible under section 193, 194, 194A, or 194EE if the recipient makes a declaration in Form No. 15G/15H under the provisions of section 197A.
  4. Under section 197 the recipient can apply the Assessing Officer in Form No. 13 to get a certificate of lower/no tax deduction. This benefit is, however, not available if tax is deductible under section 194B, 194BB, 194E, 194EE, 194F, 194-IA, 194LB, 194LC, 196B, 196C or ​196D​.
  5. Royalty payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern after March 31, 1976, where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to ​section 115A(1A) to the Indian concern or in respect of computer software referred to in the second proviso to ​section 115A(1A), to a person resident in India.
  6. Not being royalty of the nature referred to above, payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy.
  7. Fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy.​

​Is there any minimum amount upto which tax is not deducted?

In respect of various items liable to TDS, the Income-tax Law has prescribed a threshold limit. If the expenditure incurred/payment made during the year is below the threshold limit, then there is no requirement to deduct tax at source. Following list gives the threshold limit in respect of various items covered by TDS provisions: ​​

S. No. Particular Section Threshold limits
1. No deduction of tax at source from salaries 192

If net taxable income is less than maximum amount which is not chargeable to tax (Rs. 2,50,000 for an individual, Rs. 3,00,000 for Senior Citizens and Rs. 5,00,000 for Super Senior Citizens)

2. No TDS from interest paid on debentures issued by a company in which public are substantially interested. Provided interest is paid by account payee cheque to resident individual or HUF 193 If amount paid or payable during the financial year does not exceed Rs. 5,000
3. No TDS from interest on 8% Saving (Taxable) Bonds 2003 paid to a resident persons 193 If amount paid or payable during the financial year does not exceed Rs. 10,000
3A. No TDS from interest on 6.5% Gold bonds, 1977 or 7% Gold bonds, 1980 paid to resident individual 193 If a declaration is made that the nominal value of such bonds did not exceed Rs. 10,000 at any time during the previous year
4. No TDS from dividend paid by account payee cheque to resident persons 194 If amount paid or payable during the financial year does not exceed Rs. 2,500
5. No TDS from interest other than on securities paid by a banking company or co-operative bank on time deposits 194A If amount paid or payable during the financial year does not exceed Rs. 10,000
6. No TDS from interest on deposit with a post office under Senior Citizens Saving Scheme Rules, 2004 194A If amount paid or payable during the financial year does not exceed Rs. 10,000
7. No TDS from interest other than on securities (in any other case) 194A If amount paid or payable during the financial year does not exceed Rs. 5,000
8. No TDS from interest on compensation awarded by Motor Accident Claims Tribunal 194A If amount paid or payable during the financial year does not exceed Rs. 50,000
9. No TDS from Lottery / Cross Word Puzzles 194B If amount paid or payable during the financial year does not exceed Rs. 10,000
10. No TDS from winnings from horse races 194BB If amount paid or payable during the financial year does not exceed Rs. 5,000
11. No TDS from sum paid or payable to contractor 194C a) If sum paid or payable to a contractor in a single payment does not exceed Rs. 30,000

b) If sum paid or payable to contractor in aggregate does not exceed Rs. 75,000 during the financial year

12. No TDS from insurance commission paid or payable during the financial year 194D If amount paid or payable during the financial year does not exceed Rs. 20,000
12A No TDS from sum payable under a life insurance a police (including bonus) to a resident (w.e.f. 01-10-2014) person 194DA If amount paid or payable during the financial year does not exceed Rs. 1 lakh
13. No TDS from payments made out of deposits under NSS 194EE If amount paid or payable during the financial year does not exceed Rs. 2,500
14. No TDS from commission paid on lottery tickets 194G If amount paid or payable during the financial year does not exceed Rs. 1,000
15. No TDS from payment of commission or brokerage 194H If amount paid or payable during the financial year does not exceed Rs. 5,000. Further no tax to be deducted from commission payable by BSNL/ MTNL to their PCO Franchisees.
16. No TDS from payment of rent in respect of land &building, furniture or fittings or plant and machinery 194-I If amount paid or payable during the financial year does not exceed Rs. 1,80,000
17. No TDS from payment of consideration for purchase of an immovable property (other than agriculture land) 194-IA If amount paid or payable during the financial year does not exceed Rs. 50 Lakhs
18. No TDS from payment of professional fees, technical fees, royalty and directors’ remuneration 194J If amount paid or payable during the financial year does not exceed Rs. 30,000
19. No TDS from payment of compensation on compulsory acquisition of immovable property (other than Agricultural Land) 194LA If amount paid or payable during the financial year does not exceed Rs. 2 Lakhs
20. Furnishing of quarterly return in respect of payment of interest (other than interest on securities) to residents without deduction of tax 206A If amount paid or payable during the financial year does not exceed:

a) Rs.10,000 where payer is banking company or co-operative society;

b) Rs.5,000 in other case

Can the payee request the payer not to deduct tax at source and to pay the amount without deduction of tax at source?

​ A payee can approach to the payer for non-deduction of tax at source but for that they have to furnish a declaration in Form No. 15G/15H, as the case may be, to the payer to the effect that the tax on his estimated total income of the previous year after including the income on which tax is to be deducted will be nil.

Form No. 15G is for the individual or a person (other than company or firm) and Form No. 15H is for the senior citizens.

The following assessee who is in receipt of the specific incomes can approach to the payee for non-deduction of tax at source:-

a) A resident individual who is in receipt of income as referred to in 192A, 194 or 194EE if the amount of  such income does not exceed the maximum amount which is not chargeable to income-tax.

b) Any person (other than a company or a firm) who is in receipt of income as referred to in section 193, 194A or 194DA if the amount of such income does not exceed the maximum amount which is not chargeable to income-tax.

c) A resident senior citizen ( i.e., an individual resident in India who is of the age of sixty years or more at any time during the previous year) who is in receipt of income as referred to in section 192A, 193, 194, 194A, 194EE or 1

Alternatively, a payee who is in receipt of income referred to in section 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA or 195​ can apply in Form No. 13 to the assessing officer to get a certificate authorizing the payer to deduct tax at lower rate or deduct no tax as may be appropriate.

On receiving such an application, the AO may issue appropriate certificate in this regard if he is satisfied that the total income of the payee justifies the deduction of income-tax at any lower rate or nil deduction of income tax.

As per Income-tax (Ninth Amendment) Rules, 2014, Certificate for non-deduction of income-tax shall be issued directly to the person responsible for deducting the tax under an advice to the payee (i.e. who made an application for issue of such certificate).Whereas, certificate of lower deduction of income-tax shall be issued to payee itself.

 If AO has issued certificate for no deduction of tax or lower deduction of tax, as the case may be, then payer should deduct tax accordingly.

​ What are the consequences a deductor would face if he fails to deduct TDS or after deducting the same fails to deposit it to the Government’s account?

A deductor would face the following consequences if he fails to deduct TDS or after deducting the same fails to deposit

it to the credit of Central Government’s account:-

a) Disallowance of expenditure

As per section 40(a)(i) of the Income-tax Act, any sum (other than salary) payable outside India or to a non-resident,  which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid  without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due  date of filing of return.

However, if tax is deducted or deposited in subsequent year, as the case may be, the expenditure shall be allowed as  deduction in that year.

Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not  deposited with the Central Government till the due date of filing of return.

However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the  expenditure so disallowed shall be allowed as deduction in that year.

b) Levy of interest

As per section 201 of the Income-tax Act, if a deductor fails to deduct tax at source or after the deducting the same fails to deposit it to the Government’s account then he shall be deemed to be an assessee-in-default and liable to pay simple interest as follows:-

(i) at one per cent for every month or part of a month 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

(ii) at one and one-half per cent 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 paid.

c) Levy of Penalty

Penalty of an amount equal to tax not deducted or paid could be imposed under section 271C.​

​ Under what circumstances a deductor would not be deemed as an assessee-in-default even after he fails to deduct TDS or after deducting the same fails to deposit it to the Government’s account?

​ A deductor who fails to deduct the whole or any part of the tax on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee-in-default in respect of such tax if such resident—

(i) has furnished his return of income under section 139;

(ii) has taken into account such sum for computing income in such return of income; and

(iii) has paid the tax due on the income declared by him in such return of income,

and the deductor furnishes a certificate to this effect in Form No.26A from a chartered accountant.

​What to do if tax is deducted but the ultimate tax liability of the payee is nil or lower than the amount of TDS?

In such a case, the payee can claim the refund of entire/excess amount of TDS (as the case may be) by filing the return of income.​​

​ If the payer does not deduct tax at source, will the payee face any adverse consequences by means of action taken by the Income-tax Department?

It is the duty and responsibility of the payer to deduct tax at source. If the payer fails to deduct tax at source, then the payee will not have to face any adverse consequences. However, in such a case, the payee will have to discharge his tax liability. Thus, failure of the payer to deduct tax at source will not relieve the payee from payment of tax on his income. ​

​What are the duties of the person deducting tax at source?

Following are the basic duties of the person who is liable to deduct tax at source.

  • He shall obtain Tax Deduction Account Number and quote the same in all the documents pertaining to TDS.
  • He shall deduct the tax at source at the applicable rate.
  • He shall pay the tax deducted by him at source to the credit of the Government (by the due date specified in this regard*).
  • He shall file the periodic TDS statements, i.e., TDS return (by the due date specified in this regard*).
  • He shall issue the TDS certificate to the payee in respect of tax deducted by him (by the due date specified in this regard*).

*Refer tax calendar for the due dates.​

​How can I know the quantum of tax deducted from my income by the payer?

To know the quantum of the tax deducted by the payer, you can ask the payer to furnish you a TDS certificate in respect of tax deducted by him. You can also check Form 26AS from your e-filing account at https://incometaxindiaefiling.gov.in

You can also use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in​

​What to do if the TDS credit is not reflected in Form 26AS?

​ ​Non-reflection of TDS credit in Form 26AS can be due to several reasons like non-filing of TDS statement by the payer, quoting incorrect PAN of the deductee in the TDS statement filed by the payer. Thus, in case of non-reflection of TDS credit in Form 26AS, the payee has to contact the payer for ascertaining the correct reasons for non-reflection of the TDS credit in Form 26AS.​

​At what rate the payer will deduct tax if I do not furnish my Permanent Account Number to him?

As per section 206AA​ , if you do not furnish your Permanent Account Number to the payer (i.e., deductor), then the deductor shall deduct tax at the higher of the following rates :

  • At the rate specified in the relevant provision of the Act.
  • At the rate or rates in force, i.e., the rate prescribed in the Finance Act.
  • At the rate of 20%.​
  • ​I do not have PAN. Can I furnish Form 15G/15H for non-deduction of TDS from interest?

As per section 206AA​ ​, a declaration in Form No. 15G or Form No. 15H is not a valid declaration, if it does not contain PAN of the person making the declaration. If the declaration is without the PAN, then tax is to be deducted at higher of following rates :

  • At the rate specified in the relevant provision of the Act.
  • At the rate or rates in force, i.e., the rate prescribed in the Finance Act.
  • At the rate of 20%.​
  • Would I face any adverse consequences if instead of depositing TDS in the government’s account I use it for my personal needs?

​ Yes, failure to remit tax deducted by me in the government’s account within stipulated time-limit would attract interest, penalty and rigorous imprisonment of upto seven years.

​I have not received TDS certificate from the deductor. Can I claim TDS in my return of income?

​ ​Yes, the tax credit in your case will be reflected in your Form 26AS and, hence, you can check Form 26AS and claim the credit of the tax accordingly. However, the claim of TDS to be made in your return of income should be strictly as per the TDS credit being reflected in Form 26AS. If there is any discrepancy in the tax actually deducted and the tax credit being reflected in Form 26AS then you should intimate the same to the deductor and should reconcile the difference. The credit granted by the Income-tax Department will be as per Form 26AS. ​

​If I buy any land/building then is there any requirement to deduct tax from the sale proceeds to be paid by me to the seller?

Yes, Finance Act, 2013 has introduced section 194-IA which provides for deduction of tax at source in case of payment of sale consideration of immovable property (other than rural agricultural land) to a resident. S​ection 194-IA is not applicable if the seller is a non-resident. Tax is to be deducted @ 1%. No tax is to be deducted if the consideration is below Rs. 50,00,000. If the sale consideration exceeds Rs. 50,00,000, then tax is to be deducted on the entire amount and not only on the amount exceeding Rs. 50,00,000.

If the seller is a non-resident then tax is be deducted under section 195 and not under section 194-IA. Thus, in case of purchase of property from non-resident TDS provisions of section 195​ will apply and not of section 194-IA​

​What is the difference between PAN and TAN?

P ​AN stands for Permanent Account Number and TAN stands for Tax Deduction Account Number. TAN is to be obtained by the person responsible to deduct tax, i.e., the deductor. In all the documents relating to TDS and all the correspondence with the Income-tax Department relating to TDS one has to quote his TAN.

PAN cannot be used for TAN, hence, the deductor has to obtain TAN, even if he holds PAN.

However, in case of TDS on purchase of land and building (as per section 194-​IA) as discussed in previous FAQ, the deductor is not required to obtain TAN and can use PAN for remitting the TDS.​

Clarifications to issues some of the issues relating to TDS:

Whether capitalization of interest payable attracts TDS U/S 194A?

A) Yes, Capitalization of interest payable attracts the provisions of TDS.

TDS is to be made on interest payment regardless of the fact whether borrower uses funds for acquiring fixed assets, capital assets or stock-in-trade or for making payments of trading debts.

How TDS U/S 194B is deducted in case where gift (prize by way of winnings from lottery) is given in kind?

A) Generally we come across two types of situations in case gift is given in kind-

(i) If prize is given partly in cash and partly in kind- Tax will be deducted from cash prize with reference to the aggregate amount of the cash prize and the value of price in kind. And where in the part of cash is not sufficient to meet the liability for tax deduction in respect of whole of the winnings then payer has to collect the balance from the payee.

(ii) Where the prize is wholly in kind- The payer has to collect the liability for tax deduction from payee.

Example – Mr.” X “wins a Maruthi-Zen value of Rs.3,70,000/- on August 20, 2014, in a draw of lot organized by Maruthi Udyog. Tax liability on prize in kind comes to Rs.1,14,330/- (i.e., 30.9% of Rs.3,70,000/-) which may be recovered by the Maruthi Udyog from Mr. “X” and the same can be deposited with the government on account of tax deduction.

Whether payment made to Disk jokey (DJ) is covered under 194C or 194J, explain briefly?

A) Artistic performances and services provided by persons are covered U/S 194J. Even though a contract is entered with him, he is rendering professional services only and hence it is subjected to TDS u/s 194J.

Whether definition of profession U/S 194J is inclusive or exclusive?

Exclusive, almost all the definitions in the act which are favorable to the revenue is not inclusive in nature.

Whether TDS U/S 194J is to be made inclusive of reimbursement of expenditure or exclusive?

 TDS on reimbursement is not required to be made if separate bills are raised one is for professional fee and the other is for reimbursement of expenditure.

If a single bill is raised for the professional fee inclusive of reimbursement of expenditure, in such a case TDS is to be made on gross amount.

The above view is supported by a case law ITO v. Dr. Willmar Schwabe (2005) 3 SOT 71 (ITAT).

Where as per CBDT circular No. 715 dated 8-8-1995, TDS should be on total payment including reimbursement of expenses. But ITAT in the above decision it was held that reimbursement of expenses for which bill is separately raised did not attract the provisions of section 194J, the above circular attracts only in case bill is raised inclusive of reimbursement of expenditure.

Whether contract U/S 194C must be in writing?

A contract may be written or oral. Even implied contracts are also attract provisions of section 194C. Circular: No. 433 [F.No. 275/30/82-IT(B)], dated 25-9-1985.

Whether order of visiting cards, scribbling pads, letter heads in the name of company attracts TDS provisions?

Yes, section 194C would apply in respect of supply of printed material as per prescribed specifications.

Circular: No. 715, dated 8-8-1995.

Whether TDS U/S 194I to be made on rent is inclusive of maintenance or exclusive?

TDS U/S 194I on maintenance charges is not required to be made if separate bills are raised one is for rent and the other is for maintenance charges .

How ever payments made towards maintenance charges attracts sec 194C.

What are the due dates for filing quarterly TDS Returns?

The due dates for filing quarterly TDS returns, both electronic and paper are as under:

Quarter Due Date for Government Deductors Due Date for Other deductor
April to June 31 July 15 July
4July to September 31 October 15 October
October to December 31 January 15 January
January to March 15 May 15 May

 What is due date for remittance of TDS certificates? (Form-16 and Form-16A)

In this regard, your attention is invited to the CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or http://www.tdscpc.gov.in (hereinafter called TRACES Portal).

In view of above circulars, it may kindly be noted that the TDS Certificates downloaded only from TRACES Portal will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf from time to time.

Please be advised that under the provisions of section 203 of the Income Tax Act, 1961 read with rule 31A, Certificate of tax deducted at source is to be furnished within fifteen (15) days from the due date for furnishing the statement of tax deducted at source. Failure to comply with the provisions of the Act will attract penalty under the provisions of section 272A of the Act, a sum of one hundred rupees for every day during which the failure continues.

Whether plant include vehicle? Whether payment of hire charges attracts Sec 194I (TDS on rent)?

A) (i) Yes, plant includes vehicle. According to Sec.43 (3) Plant includes-

  • Ships,
  • Vehicles,
  • Books,
  • Scientific apparatus and
  • Surgical equipment used for the purpose of business or profession.

But it excludes-

  • Tea bushes,
  • Livestock,
  • Buildings,
  • Furniture and fittings.

(ii) Yes, payments made towards hire charges of vehicles attracts Sec194I

W.e.f. A.Y.2007-08, rent means any payments by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for use of (either separately or together) any-

  • Land, or
  • Building (including factory building), or
  • Land appurtenant to a building (including factory building), or
  • Machinery, or
  • Plant, or
  • Equipment, or
  • Furniture, or
  • Fittings,
  • Whether or not any or all of the above are owned by the payee.

Difference between TDS and TCS?

TDS is Tax deducted at source and TCS is tax collected at source. The meaning can be understood from its definition itself. TDS is for expense and where as TCS is for revenue (Ex- scrap sale).

Whether any person is exempted from TDS deduction? Is there any such relaxation? If so what is the procedure that should be followed?

A) Yes, if the assessing officer is satisfied that the total income of the recipient is below the basic exemption limit or the tax liability of the person is NIL, he should, on an application in Form-13, may issue a certificate on a plain paper for deduction of tax at lower rate or no deduction of tax.

Difference between Form-15G and Form-15H?

Form-15G: It is declaration given by an individual or other person (not being a company or firm) to the person responsible for deducting tax at source not to deduct tax, since the total income including the current receipts will not exceed the maximum amount which is not chargeable to income tax.

Form-15H: It is declaration given by an individual who is the age of 60 years or more to the person responsible for deducting tax at source not to deduct tax, since the total income including the current receipts will not exceed the maximum amount which is not chargeable to income tax.

Whether conversion of out standing interest on loan into loan attracts TDS?

There are two situations generally we come across while dealing the above case-

(i) Interest payment to banks/financial institutions- Any interest paid or credited to the banks/financial institutions is not subject to tax deduction U/S 194(3)(iii), hence TDS is not required to be made on interest payments.

Even the interest payments does not attract TDS provisions, hence there is no question of TDS in case of capitalization of interest on loan as loan.

(ii) Interest payments to others (other than persons those who are covered under 194(3)(iii))- According to sec-194A, TDS is to be made at the time of credit or payment which ever earlier.

So the liability to deduct TDS arises at the time of credit or payment, where as the conversion of interest out standing into loan arises after a long period from the time interest liability becomes due for payment. This is due to inability of the borrower in making the interest payments.

There is a point of timing difference between the interest due and conversion of interest into loan.

Hence the liability to deduct TDS arises only at the time the interest becomes due but not at the time of conversion of interest outstanding into loan.

(Article was First Published on 18.12.2009 and updated from time to time with Inputs from FAQ on TDS on Income Tax Website. Article is last been updated on 27.09.2015 after taking into consideration amendment made by Finance Act, 2015))


  • Sharath

    Dear Sir,

    I am an NRE, I had opened Fixed deposit of 29 Lacs in Central Bank for 1 year in Sept 2010 with option of automatic renewal with interest. From Sept 2011 to August 2014 every year bank renewed my fixed with accumulated interest. In the month of may 2014, I was in need of funds so I prematurely withdrawn my FD. Bank has paid me interest up to September 2013. They have not paid any interest for the period Oct 2013 to May 2014.

    They explained me that no interest on NRE Premature withdrawal.

    Please let me know if bank is Right.

  • seby

    I am working in two wheeler vehicle dealership, we are collecting insurance premium from customers & paid to insurance companies, we are not deduct tds against their payments. Insurance companies are exempted from tds or not ?

    Only insurance companies are exempted from tds. Please advise about When TDS is not Deducted?

    • AMIT JAIN

      HELLO SIR,
      IF YOU HAVE INDIVIDUAL PROPRITORSHIP TAN NO. OR YOU HAVE YOUR OFFICE (COMPANY OR FIRM) TAN NO. THEN YOU HAVE AN AUTHORITY TO DEDUCT THE TAX BEFORE THE PRIMIUM PAID.U/S 194 D WITH 10 % DEDUCT THE TAX AND THEN FILL THE PREMIUM. THIS PROCESS IS STARTED NEWLY BY THE INCOME TAX DEPARTMENT.
      THANK YOU

  • sushil mohatta

    Dear Sir,

    Please reply to my queries on tds on rent pvt ltd company taken on rent from 1.11.2015@19200/rent per month till march2016 totalrent payable is Rs 96000/ whether we are liable to deduct TDS on rent payable monthly or can we saythat rent is less than Rs 180000/ in FY 2015-16.Please do sent me your reply because as per Landlord no TDS to be deducted
    Regards/ sushil

    • AMIT JAIN

      HELLO SIR,
      I HAVE READ YOUR QUREY.IN THAT FINANCIAL YEAR IF YOU ARE NOT CROSSING THE LIMIT OF RENT U/S 194ib ABOVE 180000/-. THEN DON’T DEDUCT TAX BUT FROM NEXT YEAR YOU SHOULD DEDUCT THE TAX AND SUBMIT TO THE INCOME TAX DEPARTMENT BECAUSE YOU ARE GOING TO CROSS THE RENT LIMIT U/S 194ib.

      THANK YOU

  • himanshu

    We have debited Rs.38500 on account of Testing Charges in Profit &
    Loss a\c. We are a contractor out of amount Rs. 38500 an amount of Rs
    32500 is deducted from our payment(i.e from contract receipt) by the
    Panchayati Raj, Hisar for whom we have worked.

    Now the Assessing officer has issued notice for not deducting the TDS.
    Kindly suggest me any case law/study regarding the above situation. I
    will be thankful.

    • AMIT JAIN

      HELLO SIR,

      IF PANCHAYTI RAJ HISAR DEDUCT YOUR TDS FROM YOUR CONTRACTOR BILL. THEN TAKE FORM NO.16A CERTIFICE OF (TRACES WEB CITE)INCOME TAX GENERATED FROM PANCHAYTI RAJ HISAR.IF THEY DEDUCT YOUR TAX IT MEANS THEY HAVE TAN NO. UNDER HIS TAN NO. THEY CAN GIVE YOU FORM NO.16A CERTIFICATE(TRACES WEB CITE) AND SHOW TO THE INCOME TAX DEPARTMENT THAT CERTIFICATE.THEN INCOME TAX TAKE HIS ACTION BACK.
      THANK YOU

  • Jitendra

    Sir
    I RUN INDIVIDUAL FIRM & TAKE UNSECURED LOAN FROM FATHER & UNCLE RS. 6 LACS EACH.
    PLS GUIDE ME THAT WHAT LIMIT OF INTEREST PAYNENT & TDS DEDUCTION.
    IF I DEDUCT TDS THEN WHAT PERIOD OF TDS DEPOSIT QTRLY OR ANNUALY?
    THANKS WITH REGARDS
    JITENDRA

    • AMIT JAIN

      HELLO SIR,

      I HAVE READ YOUR QUERY. U/S 194A IF YOU ARE CROSSING INTEREST LIMIT RS.5000-/. THEN YOU SHOULD DEDUCT THE TAX AND SUBMIT TO THE INCOME TAX DEPARTMENT WITH QUARTERLY.BECAUSE YOU ARE GOING TO PAY THE INTERST MONTHLY.SO YOU SHOULD ALSO FILE THE TDS RETUN QUARTERLY.
      THANK YOU

  • R.C AGARWAL

    our school organize annual function , our management some event managment services highering whic rate tds applicable ( 194 C or 194J) ???. pLEASE help me

  • Dahale S S

    Though My bank ( SBH) used to deduct TDS on interest generated on 1000 days FD’s of mine ( a Senior citizen)for 2 years , and I used to show the same in my ITR ,as per 26 AS ,everything was running smooth,then ,in the third year , in the month of July , as TDS was neither deducted by SBH -nor shown in 26 AS , hence after inquiry, SBH asked me to PAY amount equivalent to TDS to them , and then SBH PAID to IT authorities as TDS on interest, on my behalf .

    after maturity of those FD’s,it was seen that , i received CONTRACTUAL MATURITY AMOUNT (after deducting TDS), but i was not reimbursed-refunded-credited with amount equivalent to TDS (of the third year)that was CREDITED by me to SBH and then that bank has CREDITED TO IT authorities.
    when it was brought to SBH , they agreed to reimburse-refund that amount with 18% comp.interest

    Now bank is neither refunding that amount …what to Do…..

  • kafeel

    can TDS be deducted on wharfage charges if the deductor is a government entity / public sector and also deductee is a goverment entity ? TDS Applicable ? ( Chennai petroleum corpration ltd can deduct TDS on wharfage charges ? )

  • Dinesh P

    Hello,
    What shall be the rate of tds in case of rent paid on Software Parks Pvt Ltd.

  • Mahendra Patil

    If government organisation is getting commission form any sours, is this commission is taxable? if taxable then even tho government organisation having TAN no. is there any requirement of PAN no.

  • Somil K Chheda

    I have got my clients TDS No. on 03rd. Dec. 2015 so from which he shall start cutting TDS

  • Shiwali

    Can anyone tell me that whether we have to deduct tax on service tax component if payment is made to non resident and service tax is paid on reverse charge basis

  • suresh

    NoNo,TDS is deducted on income excluding S.T. since S.T is not income for u

  • sushma paliwal

    My PAN NO.entered wrong during the e-filling, so no income tax is deposited against my PAN no. from last three year. what should I do now ?

  • subhasis mukherjee

    In case of a company ( Pvt Ltd ) availing term loan from NBFC and paying EMIs on a monthly basis . Kindly suggest if the borrower needs to mandatorily deduct TDS on the interest portion and pay the EMI every month as a compliance.

    • jinal

      TDS is to be deducted on provision of expense or its payment w.e. is earlier. Hence in this case TDS is to be deducted monthly and paid monthly.

  • MANOJ

    I have purchased Materials from a foreign company in india along with a valid bill with tin number , do we have to deduct TDS from such payments made to them

  • Santosh

    Sir …I have made a payment of 15000 i the month of June to a contractor and have not deducted tds on that payment assuming no further transaction with the party in future. Later on one more transaction was done with same party and made a payment of 20000 in the month of July……And i deducted TDS on entire amt of 35000 with a view of further business…..now plz guide me regarding the tds provision about date of payment and date of deduction in respect of 15000 …(TDS deducted on this 15000 in the month of july along with payment of 20000 and paid RS 350in the month of August )

  • jagjitan

    Sir my tax is deducted from the salary but during filing itr it shows the diffrence.whereas the pay slip shows that tax is deducted as per regulation.sir what to do now.

  • VENKAT

    respected all,

    i am an mobile recharge distributor, my nature of business is to sell mobile recharges both e-recharge and recharge cupons , pls suggest that on which system it need to submit income tax return

    weather tax audit case or commission basis.

    what is the procedure for filing returns for mobile recharges distributors , pls suggest

  • Balasubramanian

    I have deducted TDS U/s 194J while making provision at the year-end and paid the same and filed the Q-TDS for the same. But now we have received the actual bill which is more than what we have provided. So, we have dedcuted the TDS on the excess amount. But how to show in the Q-TDS

  • pravin

    ss pandey consultancy services paid rs. 71652 ( amount rs. 70000 @ tds 7000) hot pass th entry in tally erp-9

  • Akshay

    Whether TDS Deducter can pay amount to Deductee in CASH after Deducting TDS ?

  • Sravanalakshmi

    took a loan from tata finance, paid instolment regularly. but did not deduct the tds as per provison, but the payment for TDS is received from payee on may of next financial year. what is the due date for depositing the TDS received from payee and filing of statement on TDS and what are the interest rate applicable for TDS?

  • Pankaj Patel

    took a loan from tata finance, paid instolment regularly. but did not deduct the tds as per provison, pls give me a advice we claim Interest As a Expense or Not

  • Pankaj Patel

    took a loan from Religar finance, paid instolment regularly. but did not deduct the tds as per provison, pls give me a advice for We Sow Interest in P & L A/c or Capitalaise

  • Rohit Chona

    penalty charges levied by the terminal for violation of the terminals regulations and ISGOTT safety requirements.

    service provider is : port service

    my question is he is charging me with a service tax bill. should i deduct tds on the bill amount or not if yes then why and how much. please thanks

  • babli

    Hello,

    I am working as a consultant and i get professional fee every month. Out of my fee TDS is deducted every month and now I would like to get the return of my entire TDs amount as my income for the previous year is not taxable.
    Kindly let me know the procedure. i will get TDS certificate from the company.

    Regards & Thanks

  • http://taxguru.in M.Srinivasan

    I have a Fixed Dep in a bank I have furnished my PAN the bank was deducting TDS @ 10% from the qtrly int suddenly without any intimation or alert this qtr they have deducted 50% as TDS when I asked the branch they said TDS is done by a centralized system and the branch has no say in TDS what should I do

  • Rajan S

    While remitting TDS deducted from salary of staffs, we wrongly remitted it mentioning “(0020)COMPANY DEDUCTEES” instead of “(0021)NON-COMPANY DEDUCTEES” under Tax Applicable column. Return is yet to be filed. What may be its possible consequences?
    Kindly guide me how to rectify.

    Thanks in anticipation.

  • shanthi

    I M A banker
    kindly clarify whether we have to deduct tds if pan no is not submitted by customer but interest income is below Rs.10000/-( interest on term deposits).Urgent

    • HARJINDER SINGH

      Yes you should deduct tax @20% unless party submits PAN

  • swaroop b v

    Dear Sir,

    We are HR consultants with contract agreement with our clients can I ask my clients to deduct 2% TDS if so under which notification.

    regards
    swaroop

  • SUNIL MANOCHA

    i am a banker and deducting tds from FD SINCE LAST 5 YEAR. ASSESSEE DID NOT APPROACH ME FOR ANY TDS CERTIFICATE. DOES BANK IS RESPONSIBLE FOR DISPATCHING TDS BY POST OR COURIER TO HIS CORRESPONDENCE ADDRESS.

  • ajay purohit

    mr A has made some deposit with mr b AMr A asks for payment of intrest without deduction of TDS as he is having income below the eemption limit, He has furnished the Gorm 15g what will be the duty of Mr b in this case.

  • SWAPNIL PATIL

    Dear Sir,

    If foreign contractor work for rework of our job in his country. please consult that whether TDS is applicable or not?

  • Shankar

    I was taken Loan from Bank and i am paying interest on loan. kindly tell me any TDS applicable on interest amount….. urgent…

    • MMMM

      YES

  • Ganapati Hegde

    My query is that for FY 2011-12 I filed 24Q Q4 TDS return , I furnished 2 employes name and salary details in the return. I have not deducted TDS from their salaries. Income tax not applicable because their salary is below Rs. 180000/- PA( Rs.168510/- & Rs. 166810/-) I have not furnished their PAN No. because they have no PAN No.

    The income tax Assessing Officer, DCCT , centralized processing cell- TDS sent intimation u/s 200A for Rs. 61720/- with reason short deduction and interest on short deduction.

    Please tell me whether it is correct or not. Whose mistake it is.

    Ganapati Hegde

    • matarghasti

      yo yo.. you can.. go ahead

  • Viral Patel

    Very good article. Very important question/query i have.

    Some company have wrongly deposited around 25k TDS u/s 194j in my PAN number account and i can see it in my form 26AS. I am salaried person. What should i do? Shall i use that TDS as my tax liability and i should pay only remaining amount of my tax liability after deducting 25k?

    Expecting response.

    Thanks
    Viral

  • rajesh

    We are the security service providers. Let me know whether the service tax is applicable on interest or not. (Interest on late payment / out standing dues received from clients)

  • Ganesh

    Sir/Madam,

    we hired a lorry for only deliver the construction material from quary to site,
    My question is the person is a liable for deduction of tds? if yes which percent

    • MMMM

      14.5%

  • CASDANDCO

    I HAVE GIVEN CONSTRUCTION OF BUILDING CONTRACT ON MY OWN LAND. I AM A SALARIED PERSON. COST OF CONSTRUCTION IS 65 LAKHS. WHETHER I HAVE DEDUCT TDS U/S 194-IA OF THE INCOME TAX ACT

  • Syed Shanavaz

    IS Ttds appplicable for software upgradation by resident to resident ….????

  • Manjiree

    Sir,
    we are a owner of one office in one premises. We are receiving maintenance charges ( a fixed amount) along with service tax of @12.36%. Whether we should deduct tds while making payment for the same.

  • ssm

    Is there any provision which allows that if the employer has failed to DEDUCT tds on salary so CA of employee can issue a certificate that TDS has been taken care of by the CA

  • Arun

    Plz clarification. My company sale a cisco support pack only applicable for service tax. But customer Detuct TDS amount for 10%. My doubt Support Pack Is not Applicable TDS. Plz send Currect Answer

  • Rinkle

    Sir,
    Please tell me if in case of any bill raised by contractor include service tax also, then at which rate TDS will be deducted, whether @1%,2%(as contractor) or @10%(because service tax is charged on the bill)

  • Nikita Kejariwal

    Sir,
    where an individual/HUF has proprietorship business and TAN under firm name, is he required to get a new TAN for deducting TDS on Expenses other than those related to firm

  • Nikita Kejariwal

    Sir,
    I want to know if assessee is having TAN registered in the name of the firm, being propreitorship business, and is also liable to deduct tax at source on the interest on loans taken in personal name (other than those used in the firm), is the assessee liable to take a new TAN in personal name to deduct TDS on interest payable on loans taken in personal loan.
    Kindly explain.

  • amit

    Q. If “x” is dealing in two business first is on which he charges commission & in other business his tds is deductible in section 194 C to single party Z. his limit under commission i.e. 194H head exceeds the chargeable limit to Tds, but does not exceeds the limit under the head 194C. Can anyone suggest me Either Z should deduct Tds under both the heads due to it exceeds in any one head or should wait for limit in 194C.

  • Dilip kumar paliwal

    assessee covered by audit u/s 44AB in preceding f.y.,and in current fy only liable to deduct tds u/s 194A (interest exp.to one person more than Rs.5000 ). but the receivers’ total income does not exceeds MANCT(Rs. 200000)ie. he can submit form 15G.
    Is the assessee is required to take TAN no. in this year?
    please reply.

    • MMMM

      YES

  • HEMANT

    can i pay cash in a single day Rs50000/= as repairing charge for my car?

    Thnx

  • pintu

    I am proprietor of company.I am resident on rent and I am paid rent Rs 50000/- per month. I want to know on this rent Tds is applicable or not ?

  • Moses

    I am a business consultant to a group of Companies numbering six. Group had undertaken supply of foodgrains and other items to Government Department through a nominated Govt. agency during the A.Y. 2009-10; 2010-11 and 2011-12 under tie-up arrangement on back to back basis. The Department treated Govt Agency as Contractor (though not supposed to be) and deducted TDS under 194-C and issued Form 16-A in lieu of that. The TDS amount, so deducted , was subtracted from our payments by the Agency. But the Govt Agency is not releasing the TDS amount even after 3 years, saying that its Income Assessment has not been completed and also few entries (less than Rs .10 lakhs) are to be converted from “P” to “F” in 26AS. Our plea to release the amount through various correspondences have gone to the deaf years of the Agency. The claim amount runs in few crores of rupees.
    My question is as to the reasons given by the Agency is justified ? How long the Agency can dilly-dally the matter and the limitations? Whether Our group is entitled to get the refund with interest? Please clarify.

  • http://taxguru.in/income-tax/frequently-asked-questions-on-tax-deducted-as-source-tds.html Pankaj

    Sir,

    I was working with firm in year 2010-2012 and in FY 2010-2011 Employer deducted TDS of Rs. 2.47 L and never deposited to IT department. At the year end, Employer provided Form 16 in which it is stated that “Employer has deducted TDS but yet not deposited the same and Employer will deposit the same at earliest.” I have filed ITR with same understanding attaching that Form 16. Then after in 2012-13 I got notice from IT department of outstanding of Sum of Rs. 2.47 L. I replied to this note is very polite and positive manner confirming all possible details and also providing some reference court cases confirming that it is Employer’s responsibility to deposit TDS deducted. But IT department is possibly not accepting my humble request and they have sent me another notice asking for interest component as well. To which I have replied in formal commercial language with help of my C.A. and awaiting revert from IT Department. Now I request you to guide how to proceed with this case as explained above as IT department has started deducting /not paying my refund and adjusting the same against so claimed outstanding…..Your valuable inputs will be appreciated. Please let me understanding in case any additional details are sought from my end to facilitate your quick and valuable response.

  • aqqi

    A Non Resident party issued an Invoice detailing Software Upgradation Charges to our Resident client. I want to know whether our client needs to deduct TDS of such Non Resident. If Yes then under which Section??

  • http://taxguru.in/income-tax/frequently-asked-questions-on-tax-deducted-as-source-tds.html Namitha

    should we deduct TDS on Corporation Tax?

  • jayashalini

    Per Year (2013-14) Rs.104162 paid to Contract Basis person ok.How Much the TDS rate for TDS Deducted with Pan Card or Without pan card

    • Anand

      Ms. Jayashalini:

      Madam,

      TDS Rate = 1% (if the payee is individual or HUF having valid PAN)
      TDS Rate = 2% (if the payee is not an individual or HUF)

      TDS @ 20% to be deducted if the payee is not having PAN or not willing to share PAN (in case of resident).

      Hope this information serves the purpose. For more information on TDS, you may email happyanandch@yahoo.co.in.

      Thanks,
      Anand Prakash Choudhary

  • Pankaj Pandit

    Sir,

    Pl. inform me about Capital Gain Tax.

    P.G.Pandit

  • sujit

    sir
    TDS deducted without making a payment of bill. pl let us know how to claim the bill or procedure

    • Anand

      Sri Sujit:

      Sir,

      1. Deposit the TDS already deducted,
      2. File details of TDS in quarterly return whenever due,
      3. TDS is payable at the time of payment or payment becoming due (making provision for payment by book entry),
      4. I am not sure about the second part of your question, plz elaborate this – “let us know how to claim the bill or procedure”

      Thanks,
      Anand Prakash Choudhary

  • Anand

    Smt. Rita Bedi,

    Madam,

    1. Deposit TDS now.
    2. Inform Circle TDS Officer voluntarily.
    3. Request him for condonation of delay.
    4. Mention the case law of – Jaslok Hospital & Research … vs Department Of Income Tax on 7 November, 2012 and Mls Eli Lilly & Co. (India)(P) Ltd., 312 ITR 225 (SC).
    5. Also, there is a case law (unable to recall)that says – Penalty can not be imposed on deductor for failing to deduct TDS, if the deductee has discharged his tax liabilities well.

    This is not an expert opinion.

    Anand Prakash Choudhary

  • Anand

    Sri Vashisth,

    Sir,

    TDS provisions are applicable on the basis that vendor account being credited or payment made whichever is earlier. It can also differ in case to case scenario.

    Anand Prakash Choudhary

  • Anand

    Sri Vashisth,

    Sir,

    TDS on service Tax portion of a bill is not to be made as per circular no. 01/2014 of CBDT. Also, do not get confused with the words agreement/contract mentioned in it. It is applicable to all bills/invoices.

    Anand Prakash Choudhary

  • Anand

    Sri Joginder Sud,

    Sir,

    For your information: the deductors are made liable for this. Once you file your ITR and if there is mismatch between the TDS claimed and TDS credit in your TRACES account, then the Assessing Officer (A.O.) will first issue a demand notice of the differential amount of TDS and interest. Then, you are supposed to present the TDS certificate to the AO clearing your position of TDS mismatch. The AO will then issue notice to the deductor (via respective TDS jurisdictional officer)for difference in the TDS certificate provided to you and TDS statement filed by them. The deductor will either explain the reasons or will file a correction statement. This solves the problem.

    Anand Prakash Choudhary

  • Vashishth

    Even I want to ask the same question that whether TDS is to be deducted on gross amount including service tax u/s 194J? Plz anyone?

  • Vashishth

    i receive a bill of contractor , there is a debit note to be issue to same party , should i deduct tds on bill amt or on the balance amt after deducting the debit note amt.

    • Anand

      Sri P K Chopra,

      Sir,

      As per my understanding, you are not covered with the provisions of section 192, rather you are covered under section 194J. You can check the TDS statement (form 26AS) that under which section TDS is being made.

      Anand Prakash Choudhary

  • rita bedi

    sir,my known to person doing some business of transport and this year sale of Rs.19300000/- taken a loan from private financer and Banks (2013-2014) but he could not deducted the TDS on Intt.Paid to private Financer Rs.573000/-) ,could pay the TDS month of october 2014 ;or can impose the penalty /

  • joginder sud

    So much has been written on TDS problems faced by tax payers. No body has tackled the issue as to what can tax payer do if the deductor fails to file correction for TDS mismatch on form 26As.There is need to hold deductor responsible if he fails to correct the mismatch.

  • p.k.chopra

    working on contract basis in a autonomous body of central govt against a regular post at initial of pay scale plus grade pay plus d.a. admissible.my drawing and disbursing officer deducting income tax @ of 10% ignoring the basic exemptions i.e. 3,00,000 for senior citizen plus investment made under relevant sections upto a limit of 150000 and asked me to take refund of tax from income tax department. Isit correct on the part of my employer. kindly reply.

  • Anand

    Sri Dilip Patel:

    Sir,

    Please go through section 37BA, that may help.

    Thanks,
    Anand Prakash Choudhary

  • Anand

    Sri Manish Tanwar:

    Sir,
    You can not deduct Tax on purchase of office items like stationery etc. TDS is not required to be deducted on supply of goods. If the bill consist of any type of service charges, then TDS is required to be deducted on whole amount u/s 194C.

    Thanks,
    Anand Prakash Choudhary

  • Anand

    Sri G.K.Sharma:

    Sir,

    The TDS will be deducted from the payment to be made to the Bank if it exceeds Rs. 50,00,000/-. The irony is that, the Bank is not entitled to claim this TDS credit in the Annual Income Tax Return.

    Thanks,
    Anand Prakash Choudhary

  • Anand

    Sir, your answer to the FAQ – Whether any person is exempted from TDS deduction? Is there any such relaxation? If so what is the procedure that should be followed? seems not to be correct. The assessing Officer is required to issue a certificate for lower deduction of tax or nil deduction of tax u/s 197(1) only from ITD system (internal software of Income Tax Department) and not on the palin paper.

    Thanks,
    Anand Prakash Choudhary

  • Brij Kishore sinha

    Dear sir
    your website is very useful and knowledgeworthy.I appreciate your efforts.
    There is a question for you.
    I am a university employee in the state of Bihar.Our PF have been beeng deposited
    in a commercial bank’s saving a/c.Why is it not deposited in EPF or GPF?
    The bank used to deduct tds on intrest generated from PF a/c?The int.which being
    cummulated.Paid only on books of the bank.
    We know till now that int.of the PF a/c is tax free.So can we claim for the refund of tds from PF a/c from the Income tax dept.

  • Manoj Kumar

    I want to know that if TDS wrongly deposit in other TDS Account, then how can I rectify?

  • prakash

    in truck loan,

    i took a loan from tata finance, paid instolment regularly. but did not deduct the tds as per provison,
    pls give me a advice for relief if any judjement come pls inform

  • CA. Subhash Chandra Podder

    Good write up, every tax payers should know about this TDS Mechanism .

    CA, Subhash Chandra Podder ,FCA
    Kolkata
    13/10/2014

  • S.CHANDRAMOULI

    ONE OF CLIENT RAISE SERVIE BILL BUT PARTY NOT PAID MY BILL AMOUNT BUT ONLY REMITTED TO GIVE TDS, WHETHER I CAN CLAIM MY BILL AMOUNT BASED ON THIS TDS REMITTANCE

  • G.K.Sharma

    My Question is this: Bank acquired a immovable property under SARFAESI Act and sold by e auction to some body. whether TDS liability is there if yes who will pay and how much.

  • manish tanwar

    My Question is can i deducte the Tds on
    Purchases like Stationery and all office Materials.

  • Sanjay Bhagat

    I want to know about interest on borrowing capital for housing, whether company can give deduction of interest on housing loan, which is let out from salary.

    Please clarify the same immediately

  • Dilip Patel

    Money credited in the account or in the name of 1st account holder any credit in the account is treated as 1st name holder. after that second holder makes deposit in her/his name alone, is there any violation of IT rules ?

  • Dilip Patel

    Declaration given by individual for submitting 15G require presence for verification or if he is NRI or living abroad.

  • Santosh

    Dear Sir,
    Please let me know regarding TDS deduction, if 1 party raised 3 bills to us and one of that bill is Rs.40000/- second Rs.6000/- & third one is Rs.4000/- Total billing Rs.50000/- as per tds rule if single bill is over Rs.30000/- you will deduct tds Now in this situation i will deduct TDS of single bill which more than Rs.30000/- or three bills ?
    Thanks & Regards

  • Premlata Jain

    Dear Sir
    What if the builder is charging the maintenance charges to the unit holder for reimbursement as the builder has to pay
    the same to the agency who looks after housekeeping, security, Lift, & other facilities.
    1.Whether TDS to be deducted by the unit holder while reimbursing to the builder?
    2.Whether Service tax is applicable when reimbursement is made to the builder for maintenance charges?
    Please quote the section no.
    Thanks

  • ARUN KUMAR SINHA

    Bank has deducted and deposited excess tax to the income tax department in financial year 2010-11 fourth quarter (31st March 2011) , can deductor claim for refund before the income tax department

    Arun kumar Sinha

  • Bharat Chudasama

    We have need to pay 200000/- to government towards stall booking in abrod business fare. TDS is applicable or not ?

  • Ram sukhit choudhary

    Dear sir,

    we have to pay a private limited co as a ware house storage charges rs. 70000/- pm. and Repair and maintenancee charges including ground rent maintenance charges Rs. 30000/- p.m. My question is specially Repair and maintance charges including ground rent maintaince charges Rs. 30000/ is tds applicable if yes what Rate and other one ware house storage charges rs. 70000/- pm what rate od tds is applicable

    Thanku for your anticipation

    Urgent
    R.s.choudhary

    • Krishnendu

      TDS deduction will attract u/s 194I as the basic nanure is payment of rent.

  • PANKAJ

    Whether, TDS is deducted on Maintenance of gardening of Guest house.( %)

  • E.RAMESH

    Dear Sir,

    I am working with pharma company, whether we have to pay excise duty on RM samples , which is for Quality control samples , for example 100 kgs received 10gm using for testing.

    Kindly guid us.

    With Regards,

    E.Ramesh

  • vinit

    in provisional cases tds paid on 4th may 2011 so what is the interest

  • vinit

    in provisional cases tds paid on 4th may 2011 so what is the interest n how many month in shd be paid (ap n may or only may)

  • vinit

    in provisional cases tds paid on 4th may 2011 so what is the interest rate & for hw many month int will be paid (april n may or only may)

  • Chaithra

    Hii

    I am drawing Rs. 10000/- per month. Company is deduction Rs. 1000/- as TDS. Though I am not eligible to pay TDS as per my salary slab, one of my colleague suggested that this amount can be reimbursed from Income Tax. So please help how to get reimburse this amount.

    Regards
    Chaithra

  • http://rediffmail SANJAY BHUNIA

    I want clarification regarding TDS on interest income. Interest income upto 10000 is exempt from tax, but if interest income is (say) 11000 then 10% TDS will be deducted from (11000-10000=1000) or from entire 11000?

  • http://taxguru.in/members/srk1952/ S.Ramakrishnan

    TDS on the amount you are paying; say the amount you have to pay by cheque but subject to deduction of TDS, so you are duducting the TDS and paying the net amount/balance amount. For the TDS deducted you are the Treasurer and bound to remit the amount to the I.Tax Authorities and issue the Tax Deduction Certificate to the Payee.

    This is just a Source of Deduction from payment, and the payee will get the credit for the Income Tax Deducted at Source while computing his income for Income Tax purposes.

  • http://taxguru.in/members/uskmehta/ Dr. S.K.MEHTA

    I have not found the reply to my querry.

  • Gaurav

    Am i suppose to deduct TDS on Invoive Amount of A Profeesional Service Provider’s Bill including Services Tax…?

    Confused with Circular no 4 dated 28-04-2008 and Provisions under Section 194-I and 194-J.

  • harish

    Hello Sir,

    My wife would like to start investment in stock market. Initial Money will be borrowed on interest [from

    local private money lender].

    I want to know how tax will be calculated on profit of Stock Trading.

    Can she adjust the interest charges of borrowed money with share profit.

    Is it required that she has to maintain any document on Borrowed money Interest.

    if income does not cross 1.6 L/A then Income tax Return filling is required.

    It would be better if you provide an illustation on this.

    Thanks a lot in advance
    Harish

  • swati

    Would like to get clarification on section 54 F
    My client has sold long term capital asset. He is going to invest consideration in residential house and avail 54F.
    But, new house will be jointly in name of him and his brother.
    Shares will be separately mentioned in sale deed.
    Consideration will be paid by them separately as per their share.
    Whether he can get benefit of 54F?

  • arun karnwal

    i want to know about the travell deduction details. i travell from my home to office and vice-versa and spend nearly 500/- per month. will you please tell me, how i take deduction benefit in above said condition.

    thank you

  • Devi

    my doubt is ,’ll xplain with an example: Based on the sub contract agreement an amt of Rs.100000/- is payable to a party(not reflected at the time of agreement at that point of time), an amt of Rs.30000/- paid thru cheque and remaining bal paid in cash parts of < 20000/-.If the deductor pays TDS on Rs.30000 (Ch amt)when paid to the party and on the bal of 70000 also the deductor pays TDS at the time of paymnet. Whether this mode of transaction is allowable under the Act ?

    • http://www.taxguru.in Sandeep Kanoi

      Yes. It is allowable.

  • R. Sasidharan

    Yes TDS has to be deducted on gross amount credited or paid. This is applicable to all TDS sections, except TDS on Rent paid for building u/s 194 I . Further the landlord has to calculate the service tax amount after deducting the corporation tax paid to local authority from the gross rent amount.

  • http://www.castudentsforum.in Jitu

    Even I want to ask the same question that whether TDS is to be deducted on gross amount including service tax u/s 194J? Plz anyone?

  • SATISH CHANDRA AGARWALA

    I hold 8.00% G.O.I. RELIEF / SAVINGS BONDS CUMULATIVE (TAXABLE)purchased on 23-Sep-04 maturing on
    23-Sep-10. I understand that initially these bods were exempt from TDS. However subsequently made subject to TDS.

    Please appraise me how TDS amount would be computed and deductions made. Since TDS would cover interest income relating to more than one year I would be allowed to claim credit for the entire amount of TDS that may be deducted by ICICI bank from the income subjected to tax for the Financial Year ending on 31st. March 2011 corresponding to Assessment year 2011-2012.

    Rough computation of TDS on a token bond of say Rs. 10,000/= shakk be highly appreciate.

    Regards,

    Satish Chandra Agarwala
    PANAEYPA1397L

  • Rajesh

    My Questions is: My assessee has closed the business in F.Y. 2009-10 having TAN No. earlier due to turnover more than Rs. 40 Lacs. What is the procedure to surrender the TAN No.

  • bhaskar nagawade

    whether TDS is to be deducted on gross amount including service tax u/s 194J

    • suresh

      No,TDS is deducted on income excluding S.T. Since ST is not income for u