• Oct
  • 13
  • 2014

FAQs on Tax Deducted at Source (TDS)

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​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 the same is directly 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 by 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 as TDS mechanism.

​What are the payments covered under the TDS mechanism?

​ sections 192 to 196D give various items in respect of which tax is to be deducted at source. Following is the list of items covered under the TDS mechanism:

Section

 

reference

Nature of payment

192

Salary (to resident as well as non-resident)

193

Interest on securities

194

Dividends (dividends on which dividend distribution tax is levied under section 115-O​ are exempt from tax and hence are not liable to TDS)

194A

Interest other than interest on securities

194B

Winnings from lottery or crossword puzzle or card game or other game of any sort (to resident as well as non-resident)

194BB

Winnings from horse races (to resident as well as non-resident)

194C

Payment or credit to a resident contractor/sub-contractor

194D

Insurance commission

194E

Payment to non-resident sportsman or sports association

194EE

Payment in respect of deposits under National Savings Scheme, 1987

194F

Payment on account of repurchase of units of Mutual Fund or Unit Trust of India

194G

Commission on sale of lottery tickets

194H

Commission or brokerage

194I

Rent of land or building or furniture or fitting or plant or machinery

194IA

Payment/credit of consideration to a resident-transferor for transfer of any immovable property (other than rural agricultural land)

194J

Professional fees, technical fees, royalty or remuneration to a director

194LA

Payment of compensation on compulsory acquisition of certain immovable property

194LB

Payment/credit by way of interest by infrastructure debt fund to a non-resident

194LC

Payment/credit of interest by an Indian specified company on foreign currency approved loan/long-term infrastructure bonds from outside India

194LD

Interest on a rupee denominated bond of an Indian company or Government security (from June 1, 2013)

195

Payment/credit of other sum to a non-resident

196B

Payment/credit of income from units (including long-term capital gains on transfer of such units) to an offshore fund

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)

​196D

Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors

​At what rate tax is to be deducted by the deductor?

​ Under the Income-tax Law, different rates of TDS are prescribed for different payments. The rates of TDS for various payments are as follows :

Rate of TDS

Nature of payment

Normal rate (*)

Salary (to resident as well a​​s non-resident)

10%

Interest on securities

10%

Dividends ( other than dividend on which dividend distribution tax is paid under section 115-O)

10%

Interest other than interest on securities

30%

Winnings from lottery or crossword puzzle or card game or other game of any sort (in case of payment to non-residents, surcharge and cess will apply as per the applicable rates)

30%

Winnings from horse races (in case of payment to non-residents, surcharge and cess will apply as per the applicable rates)

​1%

2%

Payment or credit to a resident contractor/sub-contractor :

(a) payment/credit to an individual or a Hindu undivided family

(b) payment/credit to any person other than an individual or a Hindu undivided family

10%

Insurance commission

20%

Payment to non-resident sportsman or sports association (surcharge and cess will apply as per the applicable rates)

20%

Payment in respect of deposits under National Savings Scheme, 1987 (in case of payment to non-residents, surcharge and cess will apply as per the applicable rates)

20%

Payment on account of repurchase of units of Mutual Fund or Unit Trust of India (in case of payment to non-residents, surcharge and cess will apply as per the applicable rates)

10%

Commission on sale of lottery tickets (in case of payment to non-residents, surcharge and cess will apply as per the applicable rates)

10%

Commission or brokerage

10%

2%

Rent

(a) land or building or furniture or fitting

(b) Plant and machinery

1%

Payment/credit of consideration to a resident-transferor for transfer of any immovable property (other than rural agricultural land)

10%

Professional fees, technical fees, royalty or remuneration to a director

10%

Payment of compensation on compulsory acquisition of certain immovable property

5%

Payment/credit by way of interest by infrastructure debt fund to a non-resident (surcharge and cess will apply as per the applicable rates)

5%

Payment/credit of interest by an Indian specified company on foreign currency approved loan/long-term infrastructure bonds from outside India (surcharge and cess will apply as per the applicable rates)

5%

Interest on a rupee denominated bond of an Indian company or Government security (from June 1, 2013), (surcharge and cess will apply as per the applicable rates)

(#)

Payment/credit of other sum to a non-resident

10%

Payment/credit of income from units (including long-term capital gains on transfer of such units) to an offshore fund (surcharge and cess will apply as per the applicable rates)

10%

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​) (surcharge and cess will apply as per the applicable rates)

20%

Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors (surcharge and cess will apply as per the applicable rates)

(#)

Payment/credit of other sum to a non-resident

(*) Normal rate means the rate of tax applicable to an individual on the basis of his income. Further, surcharge @ 10% (if net income exceeds Rs. 1 crore) and education cess @ 2% and secondary and higher education cess @ 3% will also apply.

(#) Rates will be determined on the basis of nature of payment.

Note :

(1) Generally tax is to be deducted at above rates, however, if the payee does not furnishes his Permanent Account Number (PAN), then the payer has to deduct tax at the higher of following rates:

  • At the rate specified in the relevant provision of the Income-tax Act; or
  • At the rate or rates in force, i.e, the rate prescribed in the Finance Act; or
  • At the rate of 20%.​

(2) In case of TDS on payments to non-resident, tax is deductible at the above rates or the rates specified in Double Taxation Avoidance Agreements (DTAA) entered into by the Central Government (whichever is lower).

​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:

Limit

Nature of payment

(*)

Salaries

Rs. 5,000

Interest other than interest on securities (the limit is Rs. 10,000 for interest on time deposits with banks/ co-operative society engaged in banking business and Senior Citizen Saving Schemes, 2004 of post office)

Rs. 10,000

Winnings from lottery or crossword puzzle or card game or other game of any sort

Rs. 5,000

Winnings from horse races

Rs. 30,000 per contract and Rs. 75,000 for aggregate amount during the year

Payment or credit to a resident contractor/sub-contractor

Rs. 20,000

Insurance commission

Rs. 1,000

Commission on sale of lottery tickets

Rs. 2,500

Payment in respect of deposits under National Savings Scheme, 1987

Rs. 5,000

Commission or brokerage

Rs. 1,80,000

Rent of land or building or furniture or fitting or plant and machinery

Rs. 50,00,000

Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land)

Rs. 30,000

Professional fees, technical fees or royalty (no limit for remuneration to a director)

Rs. 2,00,000

Payment of compensation on compulsory acquisition of certain immovable property

(*) No tax is to be deducted if the taxable salary (after allowing certain deductions under section 80C to section 80U​) does not exceed the basic exemption limit applicable in case of an individual taxpayer (i.e., Rs. 2,00,000 or Rs. 2,50,000 or Rs. 5,00,000, as the case may be).

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

​ ​No, the payee cannot request the payer for non-deduction of tax at source. However, in respect of TDS on interest other than interest on securities, the payee (not being a company or a firm may) issue Form 15G/15H to the payer (if the conditions specified in this regard are satisfied) and on furnishing of such form, the payer will not deduct tax at source from interest.
Form No. 15G can be accepted only if the amount of interest to be paid does not exceed the exemption limit.
Further, the payee may approach the Assessing Officer by making an application in Form No. 13 for issuance of certificate for non-deduction of tax or lower deduction of tax at source.  If the payee has obtained such certificate, then on production of such certificate to the payer, the payer will not deduct tax or will deduct tax at lower rate as provided in the certificate issued by the Assessing Officer.

​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). ​

​ 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).​

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 TDS 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, Budget, 2013 has introduced section 194IA 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. section 194IA is not applicable if the seller is a non-resident. Tax is to be deducted @ 1% if the sale consideration of the property exceeds Rs. 50,00,000. However, if the sale consideration is below Rs. 50,00,000 then there is no need to deduct tax. 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 194IA. Thus, in case of purchase of property from non-resident TDS provisions of section ​195​ will apply and not of section 194IA.

​What is the difference between PAN and TAN?

​ ​PAN 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 194IA​) 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 republished with Inputs from FAQ on TDS on Income Tax Website)


58 Responses to “FAQs on Tax Deducted at Source (TDS)”

  1. Pankaj says:

    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.

  2. aqqi says:

    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??

  3. Anand says:

    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

  4. Namitha says:

    should we deduct TDS on Corporation Tax?

  5. jayashalini says:

    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

  6. Pankaj Pandit says:

    Sir,

    Pl. inform me about Capital Gain Tax.

    P.G.Pandit

  7. Anand says:

    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

  8. sujit says:

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

  9. Anand says:

    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

  10. Anand says:

    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

  11. Anand says:

    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

  12. Anand says:

    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

  13. Anand says:

    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

  14. Vashishth says:

    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?

  15. Vashishth says:

    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.

  16. rita bedi says:

    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 /

  17. joginder sud says:

    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.

  18. p.k.chopra says:

    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.

  19. Anand says:

    Sri Dilip Patel:

    Sir,

    Please go through section 37BA, that may help.

    Thanks,
    Anand Prakash Choudhary

  20. Anand says:

    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

  21. Anand says:

    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

  22. Anand says:

    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

  23. Brij Kishore sinha says:

    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.

  24. Manoj Kumar says:

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

  25. prakash says:

    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

  26. CA. Subhash Chandra Podder says:

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

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

  27. S.CHANDRAMOULI says:

    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

  28. G.K.Sharma says:

    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.

  29. manish tanwar says:

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

  30. Sanjay Bhagat says:

    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

  31. Dilip Patel says:

    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 ?

  32. Dilip Patel says:

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

  33. Santosh says:

    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

  34. Premlata Jain says:

    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

  35. ARUN KUMAR SINHA says:

    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

  36. Bharat Chudasama says:

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

  37. Krishnendu says:

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

  38. Ram sukhit choudhary says:

    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

  39. PANKAJ says:

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

  40. E.RAMESH says:

    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

  41. vinit says:

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

  42. vinit says:

    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)

  43. vinit says:

    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)

  44. Chaithra says:

    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

  45. 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?

  46. 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.

  47. I have not found the reply to my querry.

  48. Gaurav says:

    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.

  49. harish says:

    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

  50. swati says:

    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?

  51. arun karnwal says:

    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

  52. Yes. It is allowable.

  53. Devi says:

    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 ?

  54. R. Sasidharan says:

    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.

  55. Jitu says:

    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?

  56. SATISH CHANDRA AGARWALA says:

    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

  57. Rajesh says:

    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.

  58. bhaskar nagawade says:

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

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