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

  1. Flag “Y” should be selected in the field of ‘Reason for non deduction/ lower deduction/higher deduction/ threshold’ to highlight transactions where TDS is not deducted as the threshold for deducting tax has not exceeded.
  2. If threshold flag is provided then rate of deduction should be ‘0.0000’ and tax deducted/ deposited (deductee) amount should be ‘0.00’.
  3. Threshold flag is can be quoted only  against the following section codes in corresponding challan details:
    193,194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194G, 194H, 194I, 194J, 194LA
  4. Example:
    • In case there is no deduction of tax in the first two quarters of a F.Y., where the prescribed rate of deduction as per Income Tax Rules is 10%, the deductor should report those transactions in the respective quarterly TDS statements with zero rate of deduction (‘0.0000’), zero tax deducted/ deposited (‘0.00’) and amount paid in the respective quarters with threshold flag.
    • In the third quarter the threshold limit exceeds, the deductor will mention the prescribed rate of deduction, the amount paid in the third quarter, tax deducted/ deposited (deductee) on the total amount paid till that quarter. The same is represented as follows:
PAN Rate of
paid (Rs.)
deducted (Rs.)
deposited (Rs.)
Reason for non deduction /
lower deduction
PAN1 0.0000 1,00,000.00 0.00 0.00 Threshold flag ‘Y’ present
PAN1 0.0000 1,00,000.00 0.00 0.00 Threshold flag ‘Y’ present
PAN1 30.000 1,00,000.00 30,000.00 30,000.00 No flag present

Source: NSDL Website

More Under Income Tax


  1. Ganesh Shetty says:

    for eTDS returns, corrections, or any other consultancy services you may contact SWIFT BUSINESS SOLUTIONS at No.36, ANUGRAHA, 4th A Cross, Subedarpalya, Yeshwanthpur, Bangalore – 560022 or contact them @ 9845114411 or email [email protected]. They also provide excellent services for Service Tax, VAT, ESI, EPF, Accounts outsourcing and payroll outsourcing services.

  2. C R Dedhia says:

    There is no need to file revised returns for the previous qtrs.  Although the TDS is made for the previous (ie pertaining to previous quarters) payments where in they were below the threshold limit, as the marking of Y indicates that it is below the thresh hold limit.  Also there can be no liability of interest for non payment/late payment on such payments pertaining to the earlier quarters payments.

  3. naresh mody says:

    The required provision is announced now. however, should the deductor file revised return for earlier quarter, that is not specified by the announcement.Hence, the matter remains little confused. could any body clarify on this?

  4. VIVEK KASAT says:

    Considering this example as given above, do we require to pay the tax deducted at source in the 3rd quarter, on the whole amount paid/credited upto 3rd quarter, along with interest?

  5. Sadashiv Rupchand says:

    For eTDS, returns, challans=, corrections, PAN search, challans verifications,Taxation on Nationalised Branches contact to Sadashiv Rupchand Gaikwad Tax Consultants B4 jeevanjyot, Ganjmal, N D patel Rd, Nashik 2593507,2596104

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

September 2021