Latest Changes in TDS and TCS

Latest Changes in TDS and TCS

TDS (tax Deducted at source) Rate chart for Financial year 2012-13 is given below for your reference. 

In Budget 2012 Very few changes has been made in TDS rates and cut off amounts. However few new items have been inserted on which TDS is required to be deducted .Like Purchase of Immovable property etc. Complete details Of TDS rate changes , TCS rate changes, Due date to deposit TDS , Due date for Form 16, Due date for Form 16A , Due date for ETDS return Form 24Q,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 queries has been provided.

I am updating this post, if there is any mistake, error then please point out this in comment section.

Sl. No.	Section Of Act	Nature of Payment in brief	Cut Off Amount		Rate %
			1-Apr-12	1-Jul-12	HUF/IND	Others
1	192	Salaries	Salary income must be more then exemption limit after deductions.		Average Rate i.e. Salary/12
2	193	Interest on debentures	2500	5000	10	10
3	194	Deemed dividend	-	-	10	10
4	194A	Interest other than Int. on securities (by Bank)	10000	10000	10	10
4A	194A	Interest other than Int. on securities (By others)	5000	5000	10	10
5	194B	Lottery / Cross Word Puzzle	10000	10000	30	30
6	194BB	Winnings from Horse Race	5000	5000	30	30
7	194C(1)	Contracts	30000	30000	1	2
8	194C(2)	Sub-contracts/ Advertisements	30000	30000	1	2
9	194D	Insurance Commission	20000	20000	10	10
10	194EE	Payments out of deposits under NSS	2500	2500	20	-
11	194F	Repurchase of units by MF/UTI	1000	1000	20	20
12	194G	Commission on sale of lottery tickets	1000	1000	10	10
13	194H	Commission or Brokerage	5000	5000	10	10
14	194I	Rent (Land & building) furniture & fittings)	180000	180000	10	10
14A	194I	Rent (P & M , Equipment	180000	180000	2	2
15	194J	Professional/Technical charges/Royalty & Non-compete fees	30000	30000	10	10
16	194J(1)(ba)	Any remuneration or commission paid to director of the company(Effective from 1 July 2012)	NA	NIL	10	10
17	194LA	Compensation on acquisition of immovable property	100000	200000	10	10
18	194LLA	Payment on transfer of certain immovable property other than agricultural land (Finance Minister has withdraw TDS on such transaction on 07/05/2012)	(a) INR 50 lakhs in case such property is situated in a specified urban agglomeration; or(b) INR 20 lakhs in case such property is situated in any other area)		withdrawn by Finance Minister on 07/05/2012 no tds on such transactions	withdrawn by Finance Minister no  TDS on transfer of immovable property

Note:

1. Yearly Limit u/s 194C: Also where the aggregate of the amounts paid/credited or likely to be paid/credited to Contactor or Sub-contractor exceeds Rs.75, 000 during the financial year, TDS has to be made u/s 194C.
2. TDS at higher rate i.e., 20% has to be made if the deductee does not provide PAN to the deductor.(read detail u/s 206AA)
3. No TDS on Goods Transport  :No deduction shall be made from any sum credited or paid or likely to be credited or 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.
4. Surcharge on Income-tax is not deductible /collectible at source in case of individual/ HUF /Firm/ AOP / BOI/Domestic Company in respect of payment of income other than salary.
5. In the case of Company other than Domestic Company, the rate of surcharge is @ 2% of Income-tax, where the income or the aggregate of such income paid or likely to be paid exceeds Rs.1, 00, 00,000. 
6. No Cess on payment made to resident: Education Cess is not deductible/collectible at source in case of resident Individual/HUF/Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary. Education Cess @ 2% plus secondary & Higher Education Cess @ 1% is deductible at source in case of non-residents and foreign company.

TCS (Tax collection rate chart) for financial year 2012-13 is also given here under. In Budget 2012 Very few changes has been made in TCS like TCS on jewellery sale etc.

I am updating this post, if there is any mistake, error then please point out this in comment section.

TCS (tax collection at source rates FY 2012-13

Sl.No.	Nature of Goods	Rates in %
1	Alcoholic liquor for human Consumption	1
2	Tendu leaves	5
3	Timber obtained under  forest lease	2.5
4	Timber obtained by any mode other than a forest lease	2.5
5	Any other forest produce not being timber or tendu leaves	2.5
6	Scrap	1
7	Parking lot	2
8	Toll plaza	2
9	Mining & Quarrying	2
10	Minerals, being coal or lignite or iron ore	1 wef 01.07.2012
11	Bullion or jewellery (if the sale consideration is paid in cash exceeding INR 5 lakhs in jewellery and two lakh in case of Bullion)	1 wef 01.07.2012

Due date to Deposit TDS and TCS

“Time and mode of payment to Government account of tax deducted at source or tax paid under sub­ section (1A) of section 192.

Rule :30

(1) All sums deducted in accordance with the provisions of Chapter XVII‐B by an office of the Government shall be paid to the credit of the Central Government ‐

(a) On the same day where the tax is paid without production of an income‐tax challan; and

(b) on or before seven days from the end of the month in which the deduction is made or income‐tax is due under sub‐section (1A) of section 192, where tax is paid accompanied by an income‐tax challan.

Tax to be deducted 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 with the provisions of Chapter XVII‐B by deductor other than an office of the Government shall be paid to the credit of the Central Government ‐

(a) On or before 30th day of April where the income or amount is credited or paid in the month of March; and

(b) In any other case, on or before seven days from the end of the month in which‐

1. the deduction is made; or 
2. Income tax is due under sub‐section (1A) of section 192. 

Tax deducted by other
1	Tax deductible in March	30th April of next year
2	Other months & tax on perquisites opted to be deposited by employer	7th of next month

(3) Notwithstanding anything contained in sub‐rule (2), in special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year specified to in column (2) of the Table below by the date referred to in column (3) of the said Table: ‐

Si.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 Return Filing due Dates

NOTIFICATION No. 238/2007, dated 30-8-2007.Now following person are liable to file E-TDS/E-TCS return.

1. All Government department/office or

2. All companies. or

3. All person required to get his accounts audited under section 44AB in the immediately preceding financial year; or

4 The number of deductee’ records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty,

CONSEQUENCES OF DEFAULT

Failure to deduct or remit TDS /TCS (full or part)

• Interest: Interest at the rates in force (12% p.a.) from the date on which tax was deductible /collectible to the date of payment to Government Account is chargeable. The Finance Act 2010 amended interest rate wef 01.07.2010 and created a separate class of default in respect of tax deducted but not paid to levy interest at a higher rate of 1.5 per cent per month, i.e. 18 per cent p.a. as against 1 per cent p.m., i.e. 12 per cent p.a., applicable in case the tax is deducted late after the due date. The rationale behind this amendment is that the tax once deducted belongs to the government and the person withholding the same needs to be penalized by charging higher rate of interest Penalty equal to the tax that was failed to be deducted/collected or remitted is leviable.
• In case of failure to remit the tax deducted/collected, rigorous imprisonment ranging from 3 months to 7 years and fine can be levied.
• Failure to apply for TAN in time or Failure to quote allotted TAN or Wrong quoting of TAN :Penalty of Rs.10,000 is leviable u/s.272BB(for each failure)
• Failure to issue TDS/TCS certificate in time or Failure to submit form 15H/15G in time or Failure to furnish statement of perquisites in time or Failure to file Quarterly Statements in time: For each type of failure, penalty of Rs.100/- per day for the period of default is leviable. Maximum penalty for each failure can be up to the amount of TDS/TCS.

New Section for Penalty for non submission of ETDS /ETDS return (section 271H) (applicable from 01.07.2012)

• Failure to deliver statement within time prescribed u/s 200 (3) or to the proviso to sub-section (3) of section 206C may liable to penalty which shall not be less than Rs. 10,000/- but which may extend to Rs. 1, 00,000/-. No penalty if payment of tax deducted or collected along with fee or interest and delivering the statement  aforesaid before the expiry of 1 year from the  time prescribed for delivering the such statement. However No penalty shall be imposed u/s 271H if the person proves that there was reasonable cause for the failure.(section 273B) 

 Assessee In default (amendment in section 201)

The Deductor will not to be treated as Assessee in Default provided the resident payee has furnished his return u/s 139 and has taken into account such amount for computing income in such Return of Income and has paid the Tax Due on the income declared by him in such return of 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 not deducting tax would be payable from the date on which such tax was collectible till the date of furnishing of return of income by the resident payee. 

The limit of passing orders under section 201(1) increased from 2 years to 6 years (retrospective amendment wef 1-04-2010) 

Due Dates For ETDS returns (Form 24Q for 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 on wards For Govt. offices		For other deductor
		E-TDS return	Form 16A	E-TDS 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)

Issuance of TDS certificate Form 16 and Form 16A

Tax deducted on or after 01.04.2012, it is mandatory for all type of deductor to issue quarterly form 16A (non salary TDS certificate) only after downloaded the same from the TIN-NSDL website. Earlier this was mandatory for only companies ,Banks and co-operative societies engaged   in Banking services with effect from 01.04.2011 through circular number 3/2011.

Form 16A downloaded from TIN-NSDL can be signed manually or can be authenticated through digital signature only.

Though this will be an increase in work load on small traders also but it is welcome step as it will reduce arbitrary demands by department due to mismatching of TDS claimed and TDS shown on form 26AS. Moreover small traders are also not small now .TDS is to be deducted by HUF and Individual only if their turnover/Receipt is during the immediately preceding year more than limit prescribed under section 44AB .Present limit for FY 2012-13 is proposed to be increased to 1 crore for business and 25 lakh for Professionals.

GENERAL INFORMATION

1. Deduction at lower or nil rate requires certificate u/s.197, which will take effect from the day it is issued. It cannot be used retrospectively.
2. If TDS/TCS certificate is lost, duplicate may be issued on a plain paper giving necessary details marking it as duplicate.
3. Refund can be claimed by the deductee on filing of return of income.