Navneet Singal

Through the Finance Act, 2015, no. of changes has been introduced In Income Tax Act, 1961 (‘Act’) in respect of TDS Compliance provisions. Some of these changes has taken effect from April 1, 2015 and some of the changes will take effect from June 1, 2015. I have tried to summarize these changes which can effect to the corporates. A Gist of the same is as follows: Changes applicable w.e.f. June 1, 2015

General Provisions:

1. Exemption of TDS on payments to transporters (Section 194C): No TDS will be deducted on payment to those transporters who own ten or less goods carriages at any time during the previous year. The transporter is required to furnish a declaration to that effect along with his PAN, to the person paying or crediting such sum.

2. Furnishing of information in respect of payment to non-resident in Form 15CA/15CB has been made mandatory to all payment irrespective of whether that income is taxable in India or not. Further, penalty u/s 271-I has also been introduced in respect of non-furnishing of information or furnishing of inaccurate information in Form 15CA/15CB of Rs.  1,00,000/-.

3. Fee chargeable on late filing of TDS Return u/s 234E will be considered at the time of processing of the return u/s 200A and if there is any refund/demand that will be determined after adjusting the fees u/s 234E.

4. Concessional Rate of TDS on Income by way of certain bonds and government securities earned by FII/Qualified Foreign Investor as defined u/s 194LD has been extended from 1st June, 2015 to 1st July, 2017.

5. Obtaining or quoting of TAN has been relaxed for certain notified person u/s 203A. However, the category of those person has still to be notified by the CBDT.

6. Processing of TCS return has also been prescribed in the Act on the same lines as in TDS return. (Section 206CB).

7. An assessee can file Form 15G/15H as self-declaration for non-deduction of TDS from life insurance payments on which TDS is applicable u/s 194DA.

Related to Salary (u/s 192)

1. U/s 192 of the Act, after sub-section (2C), the section 192 (2D) has been inserted. For the purpose of estimating income or computing tax deductible under sub-section (1) of the employee, employer will obtain the evidence or proof or particulars of the prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed.

However, the form and manner still has to be prescribed by the CBDT. (Form 12C has been omitted by the IT (24th Amendment) Rules, 2003 w.e.f. 1-10-2003 which was earlier there for the purpose of declaration of other income other than the income from salary and has been substituted by simple verification/declaration).

Related to Payment of Provident Fund from EFPO

1. TDS on premature withdrawal (Section 192A & 197A): Trustees of RPFs shall, at the time of payment of the accumulated balance due to the employee, deduct tax at source at the rate of 10%, where the aggregate withdrawal is Rs. 30,000/- or more. However, Form No. 15G/15H is available for non-deduction of TDS.

Further, in case PAN is not provided by the assessee, TDS will be deducted at the Maximum Marginal Rate i.e. 34.608%.

Further, the following changes will also be applicable w.e.f. April 1, 2015 in respect of deduction of Tax.

1. 2% additional surcharge to be considered at the time of making payment while deducting TDS.

2. The rate of Income Tax on Royalty or Fee for technical services (as described u/s 115A (1) (b)) has also been reduced from 25% to 10%. (Important while comparing of rate in DTAA or rates as per normal provision under the Act for deduction of TDS u/s 195 on payment to non-resident)

(Author may be contacted at navneet.singal@gmail.com )

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0 responses to “Changes in TDS provisions vide Finance Act, 2015”

  1. Atul Verma says:

    MICROSOFT is having TRC of USA.
    There are two queries
    1 TDS % (Note : The vendor says that TDS should be 10% a per sec 115A .. refer the extract from vendor as below..
    Before the applicability of the Finance Act,2015 the rate under section 115A was 25% and the rate in DTAA between India and USA was 15%. The applicable rate earlier was 15% since it was lower of the two.
    Now, after the new applicability of the Finance Act,2015 the rate under section 115A has been revised from 25% to 10% and the DTAA rate is same i.e. 15%. So now considering that we need to take the rate lower of the two, the new applicable rate would be 10% (excluding cess).

    2. Whether we need to file Form 15CA & CB as though INVOICE is from outside India (in INR) but we are making payment in India in INR.

  2. Sejal says:

    What is the difference between the transaction date and booking date related to 26AS

    • K BHARGAV says:

      TRANSACTION DATE MEANS THE DATE WHEN PURCHASE OR SALE OCCURS AND BOOKING DATE MEANS THE DATE WHEN IT IS ACCOUNTED IN THE BOOKS

  3. b.s.bhatia says:

    kindly let me know that :can any body download 26AS form without the consent of the concerned person and circulate that form to other persons?

  4. SANDIP JHUNJHUNWALA says:

    DEAR SIR,
    MY QUERY IS THAT DISTRICT LAND AQUISITION OFFICE, PATNA HAS PURCHSED MY LAND FOR RS. 72,39,315.00 ON WHICH TDS OF RS.723931.00 HAS BEEN DEDUCTED @ 10.00 % UNDER SEC 194LA. I WANT TO KNOW HOW TO FILE THE RETURN AND WHAT WILL BE THE IMPLICATION OF FUND RECD. TO ME OF RS. 72.39 LACS. WHETHER THIS WHOLE AMOUNT WILL BE TAXABLE IN MY HAND IN THE ASST. YEAR 2015-16. HOW TO CLAIM FOR THE REFUND OF TDS, KINDLY LET ME KNOW.,
    REGARDS,
    SANDIP JHUNJHUNWALA
    9931503060

    • M.S.TIGADI says:

      Dear Sandip

      First of all find out whether the land acquired is a rural agricultural land or urban agricultural land. If it was rural agricultural land it is exempt from Capital Gain Tax, and SLAO should not have deducted tax at source. However, if its a NA land or urban agricultural land then the capital gain tax will arise, and accordingly the capital gain needs to be calculated considering the cost of acquisition (with indexation) and year of acquisition, as compulsory acquisition is a transfer by virtue of Income Tax Act, and attracts capital gain tax ONLY if LAND ACQUIRED IS URBAN AGRICULTURAL LAND OR NA LAND.

      Regards
      M.S. TIGADI,
      Chartered Accountant
      9844304375

  5. Vijay says:

    The revision under section 115 from 25% to 10% is effective from 1-4-16 only

  6. AMIT S says:

    I just checked the Income Tax Act and Rules on income tax site

    and it doesnt seems to have changed it…

    since the rule 37BB still doesnt say about chargeable or not.

  7. John says:

    we have to make payment on account of Sales force to a foreign entity. the foreign entity does not have a PAN No. do i have to deduct TDS @ 25% +3 % Cess or is it 20% +3 % cess or is it 10 % +3% cess

  8. Sonakshi says:

    Sir can you kindly elaborate the surcharge point mentioned at the end… i am unable to understand that.. since while deducting tds, we only considered the flat tds rate.. no surcharge.

  9. Arpit Singhal says:

    Dear Sir,

    In the last two points you have mentioned that 2% additional surcharge is to be considered while deducting TDS. Is it applicable for every single deduction or for any specific deduction like foreign payments.

    Kindly let us know as early as possible.

  10. VIRAL SHAH says:

    Very Good Sir.

    Under Section 195(6), still no clerity given as to file form no.15CA / CB while making other paymets ( Material Payment etc.) So, Can you please provide any concreate evidence ?

  11. Anuj Malhan says:

    Sir…you have mentioned in the last point that surcharge is applicable @10%. for deduction under various sections of TDS. Is this new provision which is applicable from 1sr June as earlier we are not deducting any surcharge on TDS for 194C payments paid to domestic contractors ( Non company )

  12. N Sripathi says:

    Kindly let me know the TDS on payments made to a foreign service provider located in Netherlands providing cloud computing services to whom payment is made via credit card

  13. Gopalakrishnan S says:

    Kindly let me know the income tax (TDS) applicable (flat rate + cess) on installation charges paid to foreign supplier with relevant Notification No. Is it 20% plus cess @3% (aggregating to 20.6%) since the foreign supplier does not have PAN. Payment to foreign supplier is made in foreign currency.

  14. Gopalakrishnan S says:

    Kindly let me know the income tax (TDS) applicable (flat rate
    + cess) on installation charges paid to foreign supplier with relevant Notification No.
    Is it 20% plus cess @3% (aggregating to 20.6%) since the foreign supplier does not have PAN.

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