Heading towards the next section, in the series of TDS articles, the present article covers the rarely touched section 194E of the Income Tax Act, 1961. Section 194E deals with the provisions of TDS deduction on payment to a non-resident sportsmen / sports association. Let us have a look into the provisions governing the same.
Understanding the basic provisions of section 194E
As per section 194E of the Income Tax Act, 1961, any person making payment of income referred to in section 115BBA of the Income Tax Act, 1961 to the following persons shall be liable to deduct TDS –
- A non-resident sportsman (including an athlete); or
- An entertainer who is not a citizen of India; or
- A non-resident sports association / institution.
Time of deduction of TDS under section 194E
If the provisions of section 194E of the Income Tax Act, 1961 gets attracted in a given transaction, then, the Deductor is required to deduct TDS within earlier of the following dates –
- At the time of payment in cheque, draft, cash or any other mode; or
- At the time of credit of the income to the account of the recipient.
The Rate at which TDS under section 194E is to be deducted
The Deductor liable to deduct TDS under section 194E is required to deduct TDS @ 20%.
TDS return filing –
The Deductor, under section 194E of the Income Tax Act, 1961, is required to furnish TDS return in Form 27Q. The TDS return in form 27Q is to be filed on a quarterly basis within the following prescribed due dates –
1. April to June – 31st July
2. July to September – 31st October
3. October to December – 31st January
4. January to March – 31st May
Issuance of TDS certificate –
Provisions of section 203 of the Income Tax Act, 1961 makes it mandatory for the Deductor to issue the TDS certificate to the payee. The Deductor deducting TDS under section 194E is required to furnish TDS certificate in Form 16A within the following prescribed dates –
1. April to June – 15th August
2. July to September – 15th November
3. October to December – 15th February
4. January to March – 15th June
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Author Bio
Please clarify whether Form 15CA and 15CB are required to be filled for remittance of money to non resident sports Federation less than 5 lakh.
Section 194E.