CBDT had issued many circulars/notification regarding collection of Tax as TDS or TCS. First of all, Tax Deductee or Collectee knows "Tax Collection Mechanism". An assessee requires to pay tax on his income by way of Direct Payment by assessee u/s. 191 as an Advance Tax or Self Assessment Tax as well as when Taxpayee has pay tax on his taxable income by way of TDS or TCS u/s. 192 to 196D it is part of collection of TAX.
TDS ON SALARY
- The salaried employee may deduct Income Tax as TDS on his annual taxable income.
- Deduct at Average rate of Income Tax compute on the basis of rate in force
- TDS has to be deducted at the time of Payment (Not on due basis)
- Employee may furnish details of other income to employers to deduct higher tax. (Losses will not be adjusted other than loss from House property)
- Two employer or more employer details of previous employer may be collected in the prescribed format.
- 80G deduction to be ignored while calculating avg. tax rate.
TDS ON INTEREST ON SECURITIES
- TDS Rate 10% (Limit Rs 5000/-)
- No TDS on certain Govt. sponsored Bonds savings certificates. Interest on Securities payable to LIC, GIC etc.
- Debenture interest payable to Individual and HUF by a public company limit Rs. 5000.
- Payment by A/c Payee cheque
TDS ON DIVIDENDS
- Dividends are exempt u/s 115-O. – No TDS
- Dividend other than 115-O dividend TDS has to be deducted. Limit Rs 2500/-
- No TDS on Dividend payable to LIC, GIC Principle officer of Indian co. is required to deduct tax on deemed dividend u/s.2(22)(e) @ 10%.
TDS OTHER THAN ON SECURITIES
- Rate of TDS 10% (Limit – Rs. 10,000/- for Bank, Co-Op Soc., Post Office) and (Limit – Rs. 5,000/- for any other case) Accrual basis
TDS UNDER SECTION 194B-194BB
- 194B- WINNING FROM LOTTERY OR CROSS WORD PUZZLES :
- Limit > Rs.10000
- Rate-30%
- 194BB-WINNING FROM HORSE RACES
- Limit > Rs. 5000
- Rate-30%
TDS ON PAYMENTS TO CONTRACTORS
Tax is to be deducted at source:
- On the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or
- On the whole of the invoice value, if the value of the material is not mentioned separately in the invoice.
TDS rate
- 1% where payment/credit is to an individual/HUF
- 2 % where recipient is any other person.
PAYMENTS TO CONTRACTORS U/s. 194C
- If the credit or the payment in pursuance of the single contract does not exceed Rs.30,000/-, no deduction has to be made at source.
- However , if the aggregate of all amounts paid/credited or likely to be paid /credited exceeds in F. Y. Rs. 75,000/- then tax at source is to be deducted.
- Individual/HUF covered under the Tax Audit U/s 44AB(a) or 44AB(b) are specified persons.
- Individual/HUF covered under the Tax Audit U/s 44AB(d) as required by Section 44AD(5) are not specified persons.
All other persons have been covered under the definition.
- No TDS on Transporters if PAN is provided
Work’ shall include:
Advertising;
- Broadcasting and telecasting including production of programmes for such broadcasting or telecasting
- carriage of goods or passengers by any mode of transport other than by railways
- catering ;
- manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer,
- If material purchased from others- it’s not work
Other TDS Sections
- 194D (Resident) (Insurance Commission > Rs.20,000 10%)
- 194E (NR) Sportsmen, Sport Association, Entertainer - 20%
- 194G (R/ NR) Commission on Sale of Lottery Tickets > Rs.1,000 10%
- 194H (Resident) Commission or Brokerage > Rs.5,000 10%
- Section 194-I, RENT Rent > Rs.1,80,000 p. a.
- Rent of Plant & Machinery @2%
- Rent of Land, Building, Furniture, etc. @10%
- Payment or credit whichever is earilier Limit of Rs 180000 applies upon the payee.
Section 194IA- Payment for non-agriculture land and building or its part
Applicable from 1.06.2013
- Transferee or buyer will deduct TDS @ 1%
- TDS is based on the consideration of the property being transferred.
- In case of co-owned property of > 50.00 Lac TDS will be deducted by all the buyers of all the sellers.
- PAN Compulsory of all the parties.
- No PAN- TDS @ 20% would apply
- TAN of the deductor (s) not required
- Form No 26QB Challan cum statement
- Form No 16B : TDS certificate
Section 194J-Fees for professional or Technical Services
- Applicable on payments or credit towards - Fees for Professional or Technical Services
- Any remuneration or commission paid to director of the company (Effective from 1 July 2012). Other than those covered under section 192
Royalty
- Any sun referred to in Section 28(va) payable towards not carrying out any business activity or not sharing any know-how patent, CR,TM, Licence, commercial rights etc.
- Limit > Rs. 30000 TDS Rate @ 10%
Other TDS Sections
- 194K- Income in respect of units
- 194L- Compensation on Acquisition of Capital Asset
- 194LA- Compensation on Acquisition of certain immovable property
- 194LB- Income by way of Interest from Infrastructure debt fund
- 194LC- Income by way of Interest from Indian Companies.
- 194LD-Income by way of interest on certain bonds and Govt. Securities.
- 195- Other Sums
- 196-196A-196B-196C-196D
