The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
Tax Deducted at Source (TDS) – Online TDS return is a statement given to the IT department every quarter. It is essential for every deductor to deposit income tax and file for TDS return on time.
TDS is the abbreviation for tax deducted at Source. A Company or any person making payment is required to deduct tax at Source if the payment exceeds the prescribed threshold limit. The Income-tax Department of our country decides the rate at which the TDS will be deducted. The entity/individual which deducts the said amount is termed as Deductor, and the person whose tax is deducted is termed as Deductee. It becomes the responsibility of the Deductor to deduct the TDS before making the payment and deposit it to the government. With Corpbiz, TDS Return filing becomes easy as we have the Auto-PAN bulk verification to avoid chances of errors in TDS returns.
Contents hide
7.3 Minimum amount upto which tax is not deducted
7.3.1 The threshold limit for deduction of tax at source under various sections is as follows:
7.3.2 Following are the basic duties of any individual who is liable to deduct tax at source:
7.4 Payment made without deduction of TDS
7.5 Consequences of not depositing TDS
7.5.1 a) Disallowance of expenditure
7.6 Section 276B relating to Failure to pay TDS deducted to the credit of Central Government
7.10 Tax Collected at Source inclusive of GST
7.11 Remuneration to company’s director
7.12 Commission to Managing Director
7.13 Procedure of filing Form 15CA
7.14 Procedure of filing Form 15CB
7.16 Process of filing Form 15CB by Chartered Accountants is as follows:
7.17 TDS on payment made to Government
7.18 Things to remember before Filing TDS Return on time
7.19 Filing Revised TDS Returns
7.20 The period of filing TDS refund
7.21 Due dates for online TDS Return Submission
A person who is liable to deduct tax at source has to file the TDS return as part of compliance. A TDS return is submitted by Tax Deductor in respect of every quarter with the Income Tax Department. The return is a statement that entails the details of the tax collected, source of collection and tax paid to Government for the reporting period.
Generally, tax is deducted on transactions such as salaries, payment to professionals and contractual basis, payment of rents exceeding certain amount, etc. For every such type of transaction and payment, there is a prescribed rate of interest. The deductee can claim the benefit of the tax deducted while ITR filing, only if the deductor has filed the TDS return on time.
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For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction “Tax Deducted at Source”, commonly known as TDS. Under this system tax is deducted at the origin Government by the payer on behalf of the payee.
The provisions of deduction of tax at source are applicable to several payments such as salary, ipayments, etc. It is the duty of the person who is making payment to someone for specified goods or services to deduct TDS and file TDS return. The specified payment includes salary, interest, commission, brokerage, professional fees, royalty, contract payments, etc. The person who deducts TDS is called deductor and the person whose tax is being deducted is called deductee. TDS is not required to be deducted by Individuals and HUF.
It is mandatory for deductors and employees to submit their PAN details as well.
Tax is deductible at source at the rates given in table (infra). If PAN of the deductee is not intimated to the deductor, tax will be deducted at source by virtue of section 206AA either at the rate given in the table or at the rate or rates in force or at the rate of 20 per cent, whichever is higher. Further, under section 94A(5), if payment or credit is made or given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate given in the table or at the rate of 30 per cent, whichever is higher. TDS rates for the financial year 2020-21 are
| CATEGORY – WHEN RECIPIENT IS RESIDENT | |
| Nature of payment | TDS (SC : Nil, EC : Nil, SHEC : Nil) |
| • Sec. 192 – Payment of salary | Normal or Special Tax Rate plus surcharge and education cess Surcharge: 10% (if total income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 crore), 15% (If total income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore), 25% (If total income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore), 37% (If total income exceeds Rs. 5 crore) HEC : 4% |
| • Sec. 192A – Payment of taxable accumulated balance of provident fund | 10 |
| • Sec. 193 – Interest on securities— | |
| a. interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company [not being listed securities in demat form], (c) any security of the Central or State Government [i.e., 8% Savings (taxable) Bonds, 2003 or 7.75% savings (Taxable) Bonds, 2018, but not any other Government security] | 10 |
| b. any other interest on securities (including interest on non-listed debentures) | 10 |
| • Sec. 194 – Dividend— | 10 |
| • Sec. 194A – Interest other than interest on securities | 10 |
| • Sec. 194B – Winnings from lottery or crossword puzzle or card game or other game of any sort | 30 |
| •Sec. 194BB – Winnings from horse races | 30 |
| •Sec. 194C – Payment or credit to a resident contractor/sub-contractor— | |
| a. payment/credit to an individual or a Hindu undivided family | 1 |
| b. payment/credit to any person other than an individual or a Hindu undivided family | 2 |
| • Sec. 194D – Insurance commission | 10 |
| – if recipient is a resident (other than a company) | 5 |
| – if recipient is a domestic company | 10 |
| • Sec. 194DA – Payment in respect of life insurance policy | 1 |
| • Sec. 194EE – Payment in respect of deposits under National Savings Scheme, 1987 | 10 |
| • Sec. 194F – Payment on account of repurchase of units of MF or UTI | 20 |
| • Sec. 194G – Commission on sale of lottery tickets | 5 |
| • Sec. 194H – Commission or brokerage | 5 |
| • Sec. 194-I – Rent— | |
| a. rent of plant and machinery | 2 |
| b. rent of land or building or furniture or fitting | 10 |
| • Sec. 194-IA – Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land) | 1 |
| • Sec. 194-IB – Payment of rent by an individual or HUF not subjected to tax audit under Section 44AB | 5 |
| • Sec. 194-IC – Payment under Joint Development Agreement to a resident individual or HUF who transfers land or building as per such agreement | 10 |
| • Sec. 194J – Fees for professional or technical services. Note: 2% if payee is engaged in the business of operation of call center | 10 |
| i. sum paid or payable towards fees for technical services | 2 |
| ii. sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; | 2 |
| iii. Any other sum | 10 |
| Note: 2% if payee is engaged in the business of operation of call center | |
| • Sec. 194LA – Payment of compensation on acquisition of certain immovable property | 10 |
| • Sec. 194LBA(1) – Payment of the nature referred to in section 10(23FC) or section 10(23FC)(a) or section 10(23FCA) by business trust to resident unit holders | 10 |
| • Sec. 194LBB – Payment in respect of units of investment fund specified in section 115UB | 10 |
| • Sec. 194LBC(1) – Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016) | – |
| section 194M – Payment of contractual work, commission (not being insurance commission referred to in section 194D), brokerage or professional fees, by an individual or a HUF not covered under section 194C, section 194H and 194J | 5 |
| section 194N – Payment in cash by banking company or co-op. bank or post office | 2/5 |
| section 194K – Income in respect of units payable to resident | 10 |
The Income-tax Act has prescribed a different threshold limit for deduction of tax at source under various sections. If the expenditure incurred/payment made during the year is below the threshold limit, then there is no requirement to deduct tax at source.
| S.No. | Particulars | Section | Threshold limit |
| 1. | No deduction of tax at source from salaries | 192 | If net taxable income is less than the maximum amount which is not chargeable to tax (i.e. Rs. 2,50,000 for an individual other than senior citizen, Rs. 3,00,000 for Senior Citizens and Rs. 5,00,000 for Super Senior Citizens) |
| 1A. | No TDS from payment of accumulated balance of provident fund account due to an employee | 192A | If taxable premature withdrawal amount is less than Rs. 50,000. |
| 2. | No TDS from interest paid on debentures issued by a company in which public are substantially interested. Provided interest is paid by account payee cheque to resident individual or HUF | 193 | If amount of interest paid during the financial year does not exceed Rs. 5,000 |
| 3. | No TDS from interest paid on 8% Saving (Taxable) Bonds 2003 or 7.75% Savings (Taxable) Bonds, 2018 (applicable from A.Y 2019-20) to resident persons | 193 | If amount of interest paid or likely to be paid during the financial year does not exceed Rs. 10,000 |
| 3A. | No TDS from interest on 6.5% Gold bonds, 1977 or 7% Gold bonds, 1980 paid to resident individual | 193 | If bonds held by other than non-resident individual (or behalf of any other person) and makes declaration to the payer that the nominal value of such bonds does not exceed Rs. 10,000 at any time during the period to which interest relates. |
| 4. | No TDS from dividend paid by Indian company by an account payee cheque to individual | 194 | If aggregate amount of dividend paid or credited during the financial year does not exceed Rs. 5000. |
| 5. | No TDS from interest other than on securities paid by a banking company or co-operative society engaged in carrying on the business of banking | 194A | If amount of interest paid or credited on time deposit during the financial year exceeds Rs 10,000 (*) (for all type of payee)/Rs 50,000 (from 01/04/2018 if payee is resident senior citizen)(*) w.e.f. 01/04/2019, the threshold limit is increased from Rs. 10,000 to Rs. 40,000. |
| 6. | No TDS from interest on any deposit with a post office under Senior Citizens Saving Scheme Rules, 2004( Notified scheme) | 194A | If amount of interest paid or credited on time deposit during the financial year exceeds Rs 10,000 (*) (for all type of payee)/Rs 50,000 (from 01/04/2018 if payee is resident senior citizen)(*) w.e.f. 01/04/2019, the threshold limit is increased from Rs. 10,000 to Rs. 40,000. |
| 7. | No TDS from interest other than on securities if payer is any other person other than post office or banking company or co-operative society engaged on the banking. | 194A | If amount of interest paid or credited on time deposit during the financial year exceeds Rs 5,000. |
| 8. | No TDS from Lottery / Cross Word Puzzles | 194B | If amount paid during the financial year does not exceed Rs. 10,000. |
| 9. | No TDS from winnings from horse races | 194BB | If amount paid during the financial year does not exceed Rs. 10,000. |
| 10. | No TDS to contractor to resident person | 194C | If sum paid/credited to a contractor in a single payment does not exceed Rs. 30,000If sum paid/credited to contractor in aggregate does not exceed Rs. 1,00,000 during the financial year (Rs. 1,00,000 w.e.f. 01/06/2016) |
| 11. | No TDS from insurance commission paid or payable during the financial year to resident person | 194D | If amount paid or credited during the financial year does not exceed Rs. 15,000 |
| 12 | No TDS from sum payable under a life insurance policy (including bonus) to a resident person (w.e.f. 01-10-2014) | 194DA | If amount paid or payable during the financial year is less than Rs. 1 lakh. |
| 13. | No TDS from payments made out of deposits under NSS | 194EE | If amount of payment or aggregate amount of payments in financial year is less than Rs. 2,500. In case of payment is received by legal heirs no tax shall be deducted. |
| 14. | No TDS from commission paid on sale of lottery tickets | 194G | If amount of income the financial year does not exceed Rs. 15,000 |
| 15. | No TDS from payment of commission or brokerage | 194H | If amount paid or credited during the financial year does not exceed Rs. 5,000 (Rs. 15,000 w.e.f. 01/06/2016). Further no tax to be deducted from commission payable by BSNL/ MTNL to their Public call office franchisees. |
| 16. | No TDS on payment of rent in respect of any land or building, furniture or fittings or plant and machinery to a resident person | 194-I | If amount paid or credited during the financial year does not exceed Rs. 1,80,000 (Rs. 2,40,000 w.e.f. 01/04/2019). No tax deductions shall be made under this section if rent is paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in 10(23FCA), owned directly by such business trust. |
| 17. | No TDS on payment of consideration for purchase of an immovable property (other than agriculture land) to a resident transferor | 194-IA | If consideration paid or payable for transfer of an immovable property is less than Rs. 50 Lakhs. |
| 17A. | No TDS on payment of rent of any land or building or both by an individual/HUF [whose books of account are not required to be audited under section 44AB to resident person.] | 194-IB | If amount of rent does not exceed Rs. 50,000 for a month or part of a month. |
| 18. | No TDS on payment of fee for professional services, fee for technical services, royalty, any sum referred to in section 28(va) to a resident person | 194J | If amount paid or credited during the financial year does not exceed Rs. 30,000 |
| 19. | No TDS from income in respect of units payable to resident | 194K | If the amount of income paid or payable exceeds Rs. 5,000 during the financial year |
| 20. | No TDS on payment of compensation/enhanced compensation on compulsory acquisition of immovable property (other than Agricultural Land) to a resident person | 194LA | If such sum amount does not exceed Rs. 2,50,000 during a financial year. |
| 21. | No TDS is required to be deducted on sum payable to a person with respect to contractual work, commission, brokerage or for professional services | 194M | If the aggregate amount paid or credited during the financial year does not exceed Rs. 50 lakhs |
| 22. | No TDS is required to be deducted on the amount withdrawn in cash from any account | 194N | If the aggregate amount withdrawn does not exceed Rs. 1 crore during the previous year.However, the threshold limit shall be Rs. 20 lakh if the person, has not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under 139(1) has expired. |
| 23. | No TDS from payment to participants of e-commerce | 194-O | If amount paid or payable Resident Individual or HUF during the financial year does not exceed Rs. 5 Lakhs |
In the Landmark Supreme Court Judgment of CIT v Bharti Cellular Ltd[2] it was held that Department had not adduced any expert evidence to show that any human intervention is involved during the process when calls take place so as to bring the payments of interconnect charges/access/pot charges made by the assessee to BSNL/MTNL within the ambit of “fees for technical services” under section 194J, the matter is remitted to AO to examine a technical expert and to decide it afresh. Department is not entitled to levy interest under section 201(1A), or impose a penalty for non-deduction of TDS on the facts and circumstances of the case for the reasons that there is no loss of revenue as tax has been paid by the recipient and the moot question involved in the case is yet to be decided.
While paying TDS, e – payment is the compulsory process.
*Refer tax calendar for the due dates.
The Supreme Court held that an employer is under no obligation to collect and examine the supporting evidence to a declaration submitted by an employee to the effect that he has actually utilized the amounts for the specified purposes in deciding the liability to TDS u/s. 192.[3]
A payee can approach the payer for non-deduction of tax at source but for that they have to furnish a declaration in Form No. 15G/15H, as the case may be, to the payer to the effect that the tax on his estimated total income of the previous year after including the income on which tax is to be deducted will be nil.
Form No. 15G is for the individual or a person (other than company or firm) and Form No. 15H is for the senior citizens.
Note: The CBDT vide Order u/s 119, dated 03-04-2020 has clarified that if a person had submitted Form No. 15G and 15H for FY 2019-20 to banks and other institutions then these forms will be valid up to 30.06.2020 for FY 2020-21 also.
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:
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 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 the subsequent year, as the case may be, the expenditure so disallowed shall be allowed as a deduction in that year.
As per Section 58(1A) (as amended with effect from the assessment year 2018-19), the provisions of section 40(a) (ia) and 40(a)(iia) shall also apply in computing the income chargeable under the head “Income from other sources”.
As per section 201 of the Income-tax Act, if a deductor fails to deduct tax at source or after the deducting the same fails to deposit it to the Government’s account then he shall be deemed to be an assessee-in-default and liable to pay simple interest as follows:
(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and
(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.
Penalty of an amount equal to tax not deducted or paid could be imposed under section 271C.
Note: The CBDT vide the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 dated 31-03-2020 has extended all respective due dates, falling during the period from 20-03-2020 to 29-06-2020, till June 30, 2020.
The benefit of extended due date shall not be available in respect of payment of tax. However, any delay in payment of tax which is due for payment from 20-03-2020 to 29-06-2020 shall attract interest at the lower rate of 0.75% for every month or part thereof if same is paid after the due date but on or before 30-06-2020.
TAN is an alphanumeric 10-digit number required by a person who is liable to deduct TDS and file TDS return. Thus such a person must make an application within a month of deducting TDS for allotment of Tax Deduction and Collection Number (TAN) in Form 49B. This number allotted is mandatory to mention in all TDS Certificates issued, returns, challans etc. If a person fails to apply for TAN he may be penalized up to Rs. 10,000/-.
A deductor who fails to deduct the whole or any part of the tax on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee-in-default in respect of such tax if such resident—
and the deductor furnishes a certificate to this effect in Form No.26A from a chartered accountant.
Payment can be done using net banking online on NSDL by selecting Challan 281. The TDS payments should be made before filing the TDS return. E-payment is compulsory for all corporate assesses and non-corporate assessees who are liable for audit u/s 44AB. Physical payment can be made using Challan 281 in an authorized bank branch.
It is a document which serves as an annexure to the intimation to be sent to the deductor. Intimation will be sent to the deductor through mail/post but a justification report will have to be downloaded from the portal.
To view Refund/ Demand Status, follow the below steps:
– Login to e-Filing website with the user ID, password, date of birth/date of incorporation and captcha.
– Go to “My Account” and click on “Refund/Demand Status”.
– Below details would be displayed.
Assessment Year, Status, and Reason (for refund failure, if any):
– Login to e-Filing website with the User ID, Password, Date of Birth / Date of Incorporation and Captcha
– Go to My Account and click on “Refund/Demand Status”.
Below details would be displayed. Assessment Year, Status. Reason (for refund failure, if any)
As per section 206C(1) every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer. Hence, amount debited to the account of buyer or payment shall be received by seller inclusive of VAT/ excise/GST. TDS to be collected on inclusive of GST.
Sec 194J levies TDS on technical and professional services. As per the provisions of the Companies Act, director of the company is also a manager and thus, technical personnel. As per Section 194J(1)(ba), any payment made to director in the nature of sitting fees, remuneration or any other sum other than those on which tax deductible under section 192 is to be considered for deduction of tax at source @ 10% under section 194J. Further, there is no threshold limit for deduction of tax at source.
Form 15CA shall be furnished electronically online. Procedure for filing of Form 15CA at e-filing portal is given below-
1 Step – Log on to the “E-filing ‘ portal at https://incometaxindiaefiling.gov.in/ by the assessee by using his credentials
2 Step – Go to the “E-file” menu located at the upper side of the page and click on Income Tax Forms.
3 Step – PAN of the assessee will be pre-filled. Select “Form 15CA” from the drop-down list in “Form Name” from the drop-down list.
4 Step – Select relevant part from “Select relevant part from the down”
5 Step – Fill Form 15CA of selected part and click on “submit” button.
6 Step– Fill up the verification part of relevant part of Form 15CA.
Note– It is mandatory to upload Form 15CB prior to filling Part C of Form 15CA. To fill up the details in Part C of Form 15CA, the acknowledgment number of e-Filed Form 15CB will be required.
If Form is submitted successfully, a message “successfully submitted” will appear on screen and a confirmation e-mail will be sent to the registered email account.
Before starting the filling the Form 15CA, please refer to instructions available at https://portal.incometaxindiaefiling.gov.in/eFiling/OnlineForms/CommonFormsLink.htm
To file Form 15CB, taxpayer is required to Add CA in his account. CA can be added by using the following steps:
Once CA has been entered by the taxpayer, afterwards CA can file Form 15CB in behalf of the taxpayer.
Note: DSC is Mandatory to file Form 15CB.
For details please refer to general instruction of java utility of Form 15CB.
No tax required to be deducted by any person from any sum payable to-
where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.
For any person who has TDS reduction in their pay, TDS return can be filed online. Return preparation has to be done within the prescribed time frame because for individuals who are deemed as a regular defaulter in India, a grave penalty can be charged. Therefore submitting e-TDS Return in the prescribed time is essential.
For the deductor, it is vital to deposit the subtracted TDS to the concerned government department along with the details.
The time period within which the deductor should deposit the amount and the deductee has to file for a TDS refund is given below. It is important to stick to the schedule to avoid incurring a penalty.
For online TDS returns, every single person who has made the TDS deduction should file the TDS return without fail. The deductor should make the quarterly submissions at the Income Tax department. There are different types of forms available in accordance with the change in the intent of the TDS deductions made. The PAN details of both the deductees and the deductor should be added to the statement. The statement should also contain information about the TDS challan and the tax details among other important details.
In online TDS return, the statement/ TDS return is defined as the summary of every transaction made in relation to the quarterly TDS payments. This statement should be submitted by the deductor to the department of income tax.
For all deductors, the submission of TDS return is mandatory. It contains the details of TDS deductions and deposits made by the deductor. It should also contain PAN card details of both deductees and deductor; tax paid particulars, information about TDS challan and any other extra information the form demands.
In the case of online TDS return, if there are any errors committed due to incorrect challan details, incorrect PAN details or lack of PAN card details, the amount which is credited as the tax will not be reflected in the Form 16A/Form16/Form 26AS. In such cases a revised TDS return must be filed.
To file a revised TDS return, you need two files – consolidated file containing the details of the deductions made in the quarter; and the justification report containing the information on the errors filed in the return.
While filing online TDS returns, if you pay in excess than the actual tax amount payable, you will be eligible to claim TDS refund.
The time within which the refund is done depends on whether you have made the income tax return filing before or after the due date. In case the returns were filed on time, then you will receive the refund of the excess amount within 3-6 months.
In online TDS return, if there is a case of late filing or failure to file the returns, the individual or the company will have to face two types of penalties:
A TDS return has a time frame same as a tax payment. Though the return can be filed online, there is a due date for each quarterly submission. To ensure you are ahead of the deadline, LawDocs’s Google Calendar has predefined compliance dates marked for every month. You will be receive a notification of the approaching due date well in advance and never incur a penalty for missing it.
[1]CIT v. Century Building & Industries Limited 293 ITR 194.
[2] [2011] 330 ITR 239 (SC).
[3] CIT v. Larsen & Toubro 181 Taxmann 71.
[4] Sonali Autos Pvt Ltd. v. State of Bihar (2017) 396 ITR 636 (Patna HC).
[5] CIT v. R. Lakshmi Narayan 202 CTR 125 (Mad).
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