|Section||Payment of Salary and Wages|
|Section 192||Criterion of Deduction : |
TDS is deducted if the estimated income of the employee is taxable.
Employer must not deduct tax on non-taxable allowances like conveyance allowance, rent allowance, medical allowance and deductions allowed under sections 80C to 80U.
No tax is required to be deducted at source if the estimated total income of the employee is less than the minimum taxable income.
TDS Rate :
As per Income Tax, Surcharge and Education Cess rates applicable on the estimated income of employee for the year.
|Section 192A|| Payment of accumulated balance of provident fund exceeding Rs. 50,000/- (Rs. 30,000/- upto 31.05.2016) which is taxable in the hands of an employee.
TDS Rate : 10%
|Section||For Payment of||TDS Rate|
|194 B||Winnings from Lotteries / Puzzle / Game exceeding Rs. 10,000 in financial year||30%|
|194 BB||Winnings from Horse Race exceeding Rs. 5,000 in financial year (Rs. 10,000/- till 31.5.2016)||30%|
|194 E||Payment to non-resident sportsmen/sports association||20%|
|194 EE||Payment of NSS Deposits exceeding Rs. 2,500 in financial year||10% |
(20% till 31.5.2016)
|194 F||Repurchase of units by Mutual Funds / UTI||20%|
|194 G||Commission on Sale of Lottery tickets exceeding Rs. 1,000 in financial year (Rs. 1,000/- till 31.5.2016)||5% |
(10% till 31.5.2016)
|194 LB||Interest on infrastructure debt fund||5%|
|194 LBA(2)||Interest income distribution by a Business Trust||5%|
|194 LBA(3)||Real Estate income distribution by a Business Trust||30% |
(10% till 31.5.2016)
|194 LBB||Income distribution by a Investment Fund u/s 115UB||30%|
(10% till 31.5.2016)
|194 LBC||Income distribution by a Securitisation Trust u/s 115TCA||30%|
|194 LC||Interest income from Indian company on money borrowed in foreign currency||5%|
|194 LD||Income by way of interest on certain rupee denominated bonds and Government securities||5%|
|195||Payment of any other sum to a Non-resident|
|a) Income in respect of investment made by a Non-resident Indian Citizen||20|
|b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen||10|
|c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112||10|
|d) Income by way of short-term capital gains referred to in Section 111A||15|
|e) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of Section 10]||20|
|f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC)||20|
|g) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India||10|
|h) Income by way of royalty [not being royalty of the nature referred to point g) above E] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy||10|
|i) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy||10|
|j) Any other income||30|
|196 B||Income from Units (including long-term capital gain on transfer of such units) to an offshore fund||10%|
|196 C||Income from foreign currency bonds or GDR of an Indian company (including long-term capital gain on transfer of such bonds or GDR)||10%|
|196 D||Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)||10%|
Salary : At the time of payment
Other Payments : When income paid or credited including credit to "Payable" or "Suspense" account.
Tax deducted at source shall be deposited to the credit of Central Government in accordance with the following provisions:
Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of 30 days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB.
Taxes deducted at source shall be deposited to the credit of the Central Government in following modes:
By furnishing the Challan No. 281 in the authorized bank branch
Note : When tax is deducted/collected by government office, it can remit the amount to the Central Government without production of an Income-tax challan and by making only book adjustment. In such a case, it has to furnish Form No. 24G to NSDL with in prescribed time-limit.
A deductor would face the following consequences if he fails to deduct TDS or after deducting the same fails to deposit it to the credit of Central Government's account:
Disallowance of expenditure: As per section 40(a)(i) of the Income-tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
However, if tax is deducted or deposited in the subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year.
Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.
However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.
The certificate on Form No. 16 should be issued by the deductor by 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted.
2. In all other cases :
The certificate on Form No. 16A should be issued within fifteen days from the due date for furnishing the "statement of TDS" under rule 31A.
Penalty on Failure to Issue TDS Certificate: Rs. 100/- every day for the period failure continues subject to a maximum of TDS amount.
(a) Statement of deduction of tax under section 192 in Form No. 24Q
(b) Statement of deduction of tax under sections 193 to 196D in :
|Particulars||Forms||Quarter Ending||Due Date|
|TDS on Salaries / Perquisites u/s 192(1A)||24 Q||June||31st July|
|TDS in cases other than TDS on Salaries/Perquisites||26 Q|
|TCS||27 EQ||June||15th July|
Where the tax deductor/collector is a Government Office and the TDS / TCS has been deposited without an accompanyine challan, the PAO/TO/DDO etc. shall be required to furnish a statement of TDS/TCS in form 26G within 15 days from the end of the relevant month and by 30th April (for the month of March) in the prescribed manner.
|Section||Failure type||Penal Provisions|
|Section 234E||Failure to submit TDS/TCS statement in time||Fine of Rs. 200/- every day during which the failure continues will be levied on deductor as long as the default continues, subject to a maximum of TDS amount.
The interest is to be paid from the date on which TDS was deducted and not from the date on which deposit of TDS was due.
|Section 272A(2)||Failure to submit returns prescribed under Section 200(3)||Penalty between ranging from Rs 10,000 to Rs 1,00,000, is payable TDS return is not submitted within a year of the due date or if the submitted return has incorrect details (such as PAN, Challan, TDS amount).|
|Section 271H||If deductor defaults for more than 1 year in filing TDS Statement or if deductor furnishes incorrect details like PAN, TDS amount, Challan particulars etc.||Penalty which shall not be less than ten thousand rupees but which may extend to one lakh rupees.|
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