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All about TDS and TCS


TDS Rate Chart for FY 2014-15 (AY 2015-16)
 
Deduction of Tax at correct rate is very important for deductor and minor mistake in deduction leads to penalty in shape of Interest on late deposit and dis allowance of Expenses. We have provided the Tax deduction rates chart (TDS rate chart) for financial year 2014-15. A minor change has been made in TDS rates for FY 2014-15 by FinanceMinister in Budget:


 

1. A new section 194DA has been inserted w.e.f. 01.10.2014 relating to payment in respect of life insurance policy

2. TDS u/s section 194A, the interest income payable by special purpose vehicle to a business trust has been withdrawn w.e.f. 01.10.2014.
 
3. TDS u/s 194LBA for income distributed u/s 115UA TDS is required to be deducted on 10% in case of resident and 5 % in case of payment to non-resident.
 
4. Disallowance of expenses under section 40(a) (ia) has been extended to all sections of TDS .However Disallowance % has been reduced to 30% from earlier 100%. It means if TDS has not been deducted and deposited on RS. 100 then only Rs. 30 will be disallowed in that year. Further disallowed amount will be allowed as exp.in year in which TDS has will be deducted & paid.
 
Complete details of TDS rate changes for financial year 2014-15, TCS rate changes, Due date to deposit TDS , Due date for Form 16, Due date for Form 16A , Due date for E-TDS return Form24Q,Penalty and interest provision for late deposit of TDS, consequences for default in filing of E-TDS Return, TDS rate applicable in case of Non submission of PAN, TDS rate applicable on service tax or not, on job work or not , which rate is applicable to individual, HUF, who should deduct TDS,who should not deduct TDS, whether TDS should be deducted on service tax on rent or professional services all such topics has been covered here under.
 
Rate Chart
 

Nature of Payment Made To Residents
Threshold(Rs.)
Company / Firm / Co-operative Society / Local Authority
Individual / HUF
If No / Invalid PAN
Section – Description
 
Rate (%)
Rate (%)
Rate (%)
192 – Salaries
-
-
Average rates
30
193 - Interest on securities
-
10
10
20
194 – Dividends
-
10
10
20
194A - Interest other than interest on securities - Others
5,000
10
10
20
194A - Banks
10,000
10
10
20
194B - Winning from Lotteries
10,000
30
30
30
194BB - Winnings from Horse Race
5,000
30
30
30
194 C - Payment to Contractors
- Payment to Contractor - Single Transaction
30,000
2
1
20
- Payment to Contractor - Aggregate During the F.Y.
75,000
2
1
20
- Contract - Transporter who has provided valid PAN
-
-
-
20
194D - Insurance Commission
20,000
10
10
20
194DA-Pament of Taxable Life Insurance Policy wef 01.10.2014
100,000
2
2
20
194E - Payment to Non-Resident Sportsmen or Sports Association
- Applicable up to June 30, 2012
-
10
10
20
- Applicable from July 1, 2012
-
20
20
20
194EE - Payments out of deposits under NSS
2,500
20
-
20
194F - Repurchase Units by MFs
1,000
20
20
20
194G - Commission - Lottery
1,000
10
10
20
194H - Commission / Brokerage
5,000
10
10
20
194I - Rent - Land and Building
180,000
10
10
20
194I - Rent - Plant / Machinery
180,000
2
2
20
194J - Professional Fees
30,000
10
10
20
194LA - Immovable Property
100,000
10
10
20
194LB - Income by way of interest from infrastructure debt fund (non-resident)
-
5
5
20
194LBA Income paid Under section 115UA we f 01.10.2014
Resident
-
10
10
20
Non resident
-
5
5
20
Sec 194 LC - Income by way of interest by an Indian specified company to a non-resident / foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India (applicable from July 1, 2012)
-
5
5
20
195 - Other Sums
-
Average rates
-
30
196B - Income from units
-
10
10
20
196C-Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend)
-
10
10
20
196D - Income of FIIs from securities
-
20
20
20
 
Note:
No TDS on service Tax: As per circular 01/2014 dated 13.01.2014 TDS is not applicable on service tax part if service tax is shown separately.
 
TDS at higher rate i.e., 20% has to be deducted if the deductee does not provide PAN to the deductor. (Read detail u/s206AA)
 
No TDS on Goods Transport. No deduction shall be made from any sum credited or paid or likely to be creditedor paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages on furnishing of his Permanent Account Number, to the person paying or crediting such sum.
 
Surcharge on tax is not deductible / collectibleat source in case of resident individual/HUF/Firm/AOP/ BOI/Domestic Company in respect of payment of income other than salary.
 
Surcharge on TDS is applicable on payment made to non-resident other than company, if payment is in excess of onecrore @ 10 %
 
Surcharge on TDS on salary isapplicable if taxable salary is more than one crore @ 10 %
 
In the case of Company other thanDomestic Company, 
  1. atthe rate of two per cent. of such tax, where the amount or the aggregate ofsuch amounts collected and subject to the collection exceeds one crore rupeesbut does not exceed ten crore rupees;
  2. atthe rate of five per cent of such tax, where the amount or the aggregate ofsuch amounts collected and subject to the collection exceeds ten crore rupees.
 
No Cess on payment made to resident. EducationCess is not deductible / collectible at source in case of resident Individual /HUF / Firm / AOP / BOI / Domestic Company in respect of payment of income otherthan salary. Education Cess @ 2% plus secondary & Higher Education Cess @1% is deductible at source in case of non-residents and foreign company.
 
 
Various situations and Surcharge /Cess applicable on TDS/TCS
Payment to
Payment
Surcharge
Cess
Resident
Non-corporate
salary(up to 1 crore)
No
yes (3%)
Non-corporate
salary(> I crore)
yes (10%)
yes (3%)
Non-corporate
other than salary
No
No
Corporate
other than salary
No
No
Non-Resident
Non-corporate
salary(up to 1 crore)
No
yes (3%)
Non-corporate
salary(> I crore)
yes (10%)
yes (3%)
Non-corporate
other than salary up to 1 Crore
No
yes (3%)
Corporate
other than salary (> 1 Crore to 10 crore)
yes(2%)
yes (3%)
Corporate
other than salary > 10 Crore
yes(5%)
yes (3%)
 
TDS by Individual and HUF (Non Audit)case not deductible
 
An Individual or a Hindu UndividedFamily whose total sales, gross receipts or turnover from business or professioncarried on by him does not exceeds the monetary limits(Rs.100,00,000 in case ofbusiness & Rs.25,00,000 in case of profession) under Clause (a) or (b) ofSec.44AB during the immediately preceding financial year shall not be liable todeduct tax u/s.194A,194C, 194H, 194I & 194J. So no tax is deductible byHUF/Individual in first year of operations of business even sales/Fees is morethan 100/25 Lakh.
 
TCS Rates for F. Y. 2014-15
Section
Nature of Payment
Individual / HUF
Other
206C
Scrap
1
1
206C
Tendu Leaves
5
5
206C
Timber obtained under a forest lease or other mode
2.5
2.5
206C
Any other forest produce not being a timber or tendu leave
2.5
2.5
206C
Alcoholic Liquor for human consumption
1
1
206C
Parking Lot, toll plaza, mining and quarrying
2
2
206C
Minerals, being coal or lignite or iron ore (applicable from July 1, 2012)
1
1
206C
Bullion if consideration (excluding any coin / article weighting 10 grams or less) exceeds Rs. 2 Lakhs or jewellery if consideration exceeds Rs. 5 Lakhs (and any amount is received in cash) (applicable from July 1, 2012)
1
1
 
Due date to Deposit TDSand TCS
 
“Time and mode of payment toGovernment account of tax deducted at source or tax paid under sub­ section(1A) of section 192."
 
Rule 30
 
1. All sums deducted in accordance withthe provisions of Chapter XVII-Bby an office of the Government shall  be paid to the credit of the CentralGovernment -  
(a) On the same day where the tax is paidwithout production of an income-taxchallan; and  
(b) on or before seven days from the endof the month in which the deduction is made or income-tax is due under sub-section (1A) of section 192, where taxis paid accompanied by an income-taxchallan.
Tax to be deducted/collected by Govt Office
1
Tax deposited without challan
Same day
2
Tax deposited with challan
7th of next month
3
Tax on perquisites opt to be deposited by the employer
7th of next month


2. All sums deducted in accordance withthe provisions of Chapter XVII-Bby deductors other than an office of the Government shall be paid to the creditof the Central Government  
(a)on or before 30th day of April where theincome or amount is credited or paid in the month of March; and  
(b) in any other case, on or before sevendays from the end of the month in which-the deduction is made; or income-taxis due under sub-section(1A) of section 192.
Tax deducted/collected by other
1
tax deductible in March
30th April of next year 
In case of TCS 7th April
2
other months & tax on perquisites opted to be deposited by employer
7th of next month


3. Notwithstanding anything contained insub-rule(2), in special cases, the Assessing Officer may, with the prior approval ofthe Joint Commissioner, permit quarterly payment of the tax deducted undersection 192 or section 194A or section 194D or section 194H for the quarters ofthe financial year specified to in column (2) of the Table below by the datereferred to in column (3) of the said Table: -  
Sr. No.
Quarter ended On
Date of payment
1
30th June
7th July
2
30the September
7th October
3
31st December
7th January
4
31st March
30th April
 
Person required to file ETDS ReturnFiling due Dates
 
NOTIFICATION No. 238/2007, dated30-8-2007.Now following person are liable to file etds / etcs return.
 
1  AllGovernment department/office or
2  Allcompanies. Or
3 All person required to get hisaccounts audited under section 44AB in the immediately preceding financialyear; or
4 The number of deductees’ records in aquarterly statement for any quarter of the immediately preceding financial yearis equal to or more than fifty.
 
DUTIES OF TAXDEDUCTOR/COLLECTOR
 
To apply for Tax Deduction AccountNumber (TAN) in form 49B, in duplicate at the designated TIN facilitationcenters of NSDL(please see www.incometaxindia.gov.in), within one month fromthe end of the month in which tax was deducted. To quote TAN (10 digit reformattedTAN) in all TDS/TCS challans, certificates, statements and othercorrespondence.
To deduct/collect tax at theprescribed rates at the time of every credit or payment, whichever is earlier,in respect of all liable transactions?
To remit the tax deducted/collectedwithin the prescribed due dates by using challan no. ITNS 281 by quoting theTAN and relevant section of the Income-tax Act.
To issue TDS/TCS certificate, completein all respects, within the prescribed time in Form No.16 (TDS on salaries), 16A(other TDS) 27D( TCS).
To file TDS/TCS quarterly statementswithin the due date. To mention PAN of all deductees in the TDS/TCS quarterlystatements.
 
CONSEQUENCES OF DEFAULT
 
Failure to deduct or remit TDS /TCS (fullor part)  
Interest: Interest at the rates in force (12%p.a.) from the date on which tax was deductible /collectible to the date ofpayment to Government Account is chargeable. The Finance Act 2010 amendedinterest rate wef 01.07.2010 and created a separate class of default in respectof tax deducted but not paid to levy interest at a higher rate of 1.5 per centper month, i.e. 18 per cent p.a. as against 1 per cent p.m., i.e. 12 per centp.a., applicable in case the tax is deducted late after the due date. Therationale behind this amendment is that the tax once deducted belongs to thegovernment and the person withholding the same needs to be penalized bycharging higher rate of interest Penalty equal to the tax that was failed to bededucted/collected or remitted is leviable.
 
In case of failure to remit the taxdeducted/collected, rigorous imprisonment ranging from 3 months to 7 years andfine can be levied.
 
Failure to apply for TAN in time orFailure to quote allotted TAN or Wrong quoting of TAN: Penalty of Rs.10,000 is leviableu/s.272BB(for each failure)
 
Failure to issue TDS/TCS certificate intime or Failure to submit form 15H/15G in time or Failure to furnish statementof perquisites in time or Failure to file Quarterly Statements in time: Foreach type of failure, penalty of Rs.200/- per day for the period of default isleviable. Maximum penalty for each failure can be up to the amount of TDS/TCS.
 
New Section for Penalty for non-submissionof ETDS /ETDS return (section 271H) (applicable from 01.07.2012)
 
Failure to deliver statement withintime prescribed u/s 200 (3) or to the proviso to sub-section (3) of section 206Cmay liable to penalty which shall not be less than Rs. 10,000/- but which may extendto Rs. 1,00,000/-. No penalty if payment of tax deducted or collected alongwith fee or interest and delivering the statement aforesaid before the expiry of1 year from the time prescribed for delivering the such statement. However Nopenalty shall be imposed u/s 271H if the person proves that there was reasonablecause for the failure. (Section 273B)
 
Assessee In default (amendment insection 201)
 
The Deductor will not to be treated asassessee in Default provided the resident payee has furnished his return u/s139 and has taken into account such amount for computing income in such Returnof Income and has paid the Tax Due on the income declared by him in such returnof income and furnishes a certificate to this effect, duly certified by a CA,in the prescribed form. This form is yet to be notified.
 
However, the interest for notdeducting tax would be payable from the date on which such tax was collectibletill the date of furnishing of return of income by the resident payee.
 
The limit of passing orders undersection 201(1) increased from 2 years to 6 years (retrospective amendment wef1-04-2010)
 
Due Dates for ETDS returns (Form 24Qfor salary and 26Q for contractors others, 27Q for Non-resident:
Due date ETDS return 24Q, 26Q 27Q and Form16 ,Form 16A
Sl. No.
Quarter ending
From 01.11.2011 onwards For Govt offices
For other deductors
Etds return
Form 16A
Etds return
Form 16A
1
30th June
31st July
15th August
15th July
30th July
2
30th September
31st October
15th November
15th October
30th October
3
31st December
31st January
15th Feburary
15th January
30th January
4
31st March
15th May 
30th May (31st May for form 16)
15th May
30th May (31st May for form 16)








Post on: 12Sep, 2014 By Dhiraj Satnalika 1 comments

1 comments

  1. Pankaj Agarwala

    Brief and helpful. Thank you for the new ammendements!!


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