----- Forwarded Message -----
From: rajesh <rajeshmehta_indore@yahoo.com>
To: ghaziabad_ca@yahoogroups.com
Sent: Saturday, 27 July 2013 10:10 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] How to calculate Interest on late payment of TDS, Pl. refer para No. 15
From: rajesh <rajeshmehta_indore@yahoo.com>
To: ghaziabad_ca@yahoogroups.com
Sent: Saturday, 27 July 2013 10:10 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] How to calculate Interest on late payment of TDS, Pl. refer para No. 15
CA RAJESH MEHTA,
FCA, DISA (ICAI)
203 MANAS BHAWAN EXTN.,
11, RNT MARG, NEAR HOTEL SHREEMAYA,
INDORE (M.P.)
9827036956, 9424818719, 0731-2520111
rajeshmehta_indore@yahoo.com
DATE 17th JAN, 2013
Some useful provisions relating to TDS :-
Nowadays TDS/TCS are the main tool of collecting taxes by the Government. It is a way to collect taxes, like a bee which collects honey without causing pain to the flower. It is similar to "pay as you earn" scheme, known as withholding tax in many countries like USA. Government has made possible fastest issue of refunds through ECS, so now persons from whose income TDS is deducted are now not uncertain over the fate of their refund arising out of TDS. However persons who are deducting TDS has to be much regular so that correct and timely credit is reflected in deductees form 26AS. Some of the TDS/TCS provisions, mainly with reference to salary, which are of routine use are summarized as under :-
1. Tax deduction at source from salaries Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries".The income-tax is required to be calculated on the basis of the tax rates applicable to current financial year and shall be deducted at the time of each payment. No tax will, however, be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year 2012-13 exceeds Rs. 2,00,000/-, or as the case may be, depending upon the age of the employee. Deduction U/s 80CCF regarding investment in Infrastructure bonds is not available from Fin. Yr. 2012-13, but deduction U/s 80CCG regarding investment in equity will be allowed to new investors upto maximum of Rs. 25000/- on investment of Rs. 50000/-, only once, not in subsequent year, if a persons has bank interest income he will be allowed deduction of maximum of Rs. 10000/- U/s 80TTA, in addition to mediclaim premium paid, a person will be allowed Rs. 5000/- incurred for preventive health check-up, paid even cash, for him and his family dependant on him, subject to maximum limits specified U/s 80D.
2. Income under any Other head: (i) Section 192(2B) enables a taxpayer to furnish particulars of income under any head other than "Salaries" ( not being a loss under any such head other than the loss under the head " income from house property") received by the assessee for the same financial year and of any tax deducted at source thereon. Such particulars may be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under Rule 26B(2) of the Rules and shall be annexed to the simple statement, as under:
I, _________ (name of the assessee), do declare that what is stated above is true to the best of my information and belief.
(ii) Such income should not be a loss under any such head other than the loss under the head "Income from House Property" for the same financial year. DDO shall take such other income and tax deducted at source, if any, on such income and the loss, if any, under the head "Income from House Property" into account for the purpose of computing tax deductible in terms of section 192(2B) of the Act. However, this sub-section shall not in any case have the effect of reducing the tax deductible (except where the loss under the head "Income from House Property" has been taken into account) from income under the head "Salaries". In other words, the DDO can take into account any loss (negative income) only under the head "income from House Property" and no other head for working out the amount of total tax to be deducted.
3. Relief When Salary Paid in Arrear or Advance: Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89(1) he may furnish to the person responsible for making the payment, such particulars in Form No. 10E duly verified by him, and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars and take the same into account in making the deduction
4. Adjustment for Excess or Shortfall of Deduction: The provisions of Section 192(3) allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within that financial year itself.
5. Form 15G/15H for interest on deposits :- w.e.f. 1st July, 2012 Form no. 15G is applicable for the age below 60 years & 15H for the persons who completes the age of 60 years at any time during the financial year. The age was 65 years upto 30 Jun 2012.
6. Income limit for furnishing 15G :- A person (other than senior citizen) including resident individual
(other than a company or firm) can furnish form No.
15G if :-
(i)His income from interest does not exceed the maximum
amount which is not chargeable to income tax and
(ii) Tax on his estimated total income will be nil for that
assessment year.
7. Income limit for furnishing 15H :- A senior citizen can furnish form No. 15H if tax on his estimated total income will be nil for that assessment year.
8. When & where to submit 15G/H :- Form 15G/H must be obtained before or at the first moment, when the interest crosses the limit of Rs. 5000(other than banks)/10000/-(in case of banks) during the financial year, it should not be taken after crediting or paying the interest. After obtaining, one copy of it must be submitted by the payer to the Commissioner on or before 7th day of next following month in which the form is furnished to him.
9. 15G by charitable trusts & institutions :- In view of rule 28AB a charitable or religious trust or institution who claims exemption U/s 11 or 12 or educational institutions/hospital/university etc. required to file return U/s 139(4C) cannot furnish form no. 15G if their interest income exceeds the basic exemption limit i.e. Rs. 1.80 Lakh for A.Y. 2012-13 and Rs. 2 Lakh for A.Y. 2013-14, but it will have to apply in form No. 13 for nil deduction.
10. No TDS from income of notified institutions :- By insertion of Sec. 197A(1F) Finance Act 2012 has made a provision that no deduction of tax shall be made from such specified payment to such institution, association or body or class of institutions, associations or bodies as may be notified by the Central Govt. in the official Gazette in this behalf.
11. Certificate of lower rate :- Assessee can apply in new form No. 13 for lower rate or nil TDS. Form No. 13 has been amended w.e.f. 1st April 2011 in which information relating to 3 years assessed income, 3 years income tax returns alongwith enclosures, existing income tax dues, pending income tax and TDS returns, Gross turnover, gross profit, net profit, copies of P.& L. A/c, balance sheet, audit report, details of exempt income, has to be given. In case of charitable trusts and institutions it is necessary that all returns upto date have been filed. Certificate will be issued on plain paper generated through compuer system having serial number, its one copy will be sent directly to the payer and one copy to the payee. Trust and institutions will have to furnish to the assessing officer, half yearly details of income received without deducting tax on the basis of nil certificate issued to it.
12. Furnish PAN in all TDS/TCS correspondence :- It is necessary to quote PAN of the deductee and the deductor in all correspondence, bills, vouchers exchanged between them. However in case of Central/State Govt. departments pan is not required.
13. Credit of TDS to other person :- When whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, then credit of whole or part of that TDS shall be given to that other person and not to the deductee. For this, deductee will have to file a declaration with the deductor specifying name, address, pan of the person to whom credit of TDS is to be given alongwith reasons for giving credit to that other person, then deductor will file TDS return accordingly.
14. Credit of TDS to which year :- Credit for TDS shall be given for that assessment year for which the income is assessable. Where income is assessable over a number of years, credit for TDS shall be allowed across those years in the same proportion in which the income is assessable to tax. Credit for TDS shall be on the basis of TDS return and claim made by the claimant in his income tax return and subject to verification.
15. How to calculate interest on late payment of TDS :-
(a) If a person liable to deduct TDS fails to deduct whole or part of TDS then he will be liable to pay U/s 201(1A) simple interest @ 1% 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,
(b) if tds is deducted but not paid then @ 1.5% for every month or part of 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.
For example a person has deducted tds Rs. 12500/- on 25 April, 2011 then he is liable to deposit tds on 7 may 2011 but if he pay tds on 18 may 2012 then here delay is 13 months so interest will be 19.5%, if tds is deposited on 24 may 2012 even though delay is 13 months, but if tds is deposited on 26 may, 2012 then delay is 14 months, i.e. whole month is reckoned from the date of deduction and to the date of deposit of TDS.
16. Late fees for TDS/TCS returns :-Now w.e.f. 1st July, 2012, for TDS deductible on or after 1st Jul 2012, return is filed late, then U/s 234E late fees of Rs. 200/- per day will have to be deposited before filing TDS / TCS return, however it is specified that late fees should not exceed TDS/TCS for that quarter. In addition to this, if TDS and late fee and interest due thereon as well as TDS return is not deposited within one year from the due date then penalty U/s 271H ranging from 10 thousand to 1 lakh may be imposed.
17. Deemed date of payment of Tax :- presently if the assessee has failed to deduct TDS and the payee has discharged his tax liability , even though deductor is liable to pay interest U/s 201(1A) from due date of TDS to the date of tax paid by the payee. Now w.e.f. 1-7-2012 it is proposed to amend U/s 201 that if the payee has furnished the return of income and paid tax on such income and payer furnishes a certificate from Chartered Accountant to this effect, then date on which return is furnished by the payee will be treated as date of payment of TDS and not the date of actual date of payment of tax by the payee, i.e. payer will be required to pay interest U/s 201(IA)(i) till date of filing of return by the payee.
18. No interest U/s 220(2) :- When interest is charged U/s 201(1A) on the amount specified in the intimation issued U/s 200A(1), then no interest will be charged for the same amount for the same period U/s 220(2).
19. TDS on rent U/s 194-I :-
(i) TDS on rent is applicable in case of land, building ( incl. factory building, machinery, plant, equipment, furniture, fittings.
(ii) if there are more than one payee/co-owners, each having definite and ascertainable share then limit of Rs. 1.80 Lakh is applicable to each co-owner.
20. TDS on service tax component :- TDS is deductible on the entire consideration including service tax but in the case of TDS on rent, TDS will not be deducted on service tax component included in rent.
21. TDS on payment to transporter :- In view of Sec. 194C(6) no tds is required to be deducted on payment to transport contractor during the course of plying, hiring or leasing goods carriage, if he furnishes his PAN, however such information i.e. name of transporter, amount paid or credited, his PAN will have to be submitted in quarterly e-filing of tds return even in case of nil TDS . However TDS @ 20% will have to be deducted if the transporter does not furnish his PAN.
22. Due date of depositing TDS :- TDS deducted on income credited or paid on any day in the month of march can be deposited upto 30th April, and in any other month within 7 days from the end of the month.
23. 20% TDS for wrong PAN :- If deductee's PAN is not available or invalid then it will be assumed that deductee has not furnished his PAN to the deductor and then 20% TDS will be deductible.
24. Penalty for wrong information :- On furnishing incorrect information (e.g. wrong PAN & amount) in TDS return, w.e.f. 1st july, 2012 penalty ranging from 10 thousand to 1 lakh may be imposed U/s 271H(1)(b).
25. Issue of TDS / TCS Certificate :- Form no. 16A /27D are to be issued within 15 days from the due date of filing of quarterly TDS / TCS returns:-
. (i) i.e. in case of all deductors except deductors:- upto 30 July, 30 Oct, 30 Jan, 30 May ,
(ii) i.e. in case of Government deductors :- upto 15 Aug., 15 Nov., 15 Feb., 30 May).
& form no. 16 (Salary) is to be issued on or before 31 May. If the DDO fails to issue these certificates to the person concerned, as required by section 203, he will be liable to pay, by way of penalty, under section 272A(2)(g), a sum which shall be Rs. 100/-for every day during which the failure continues.
It is, however, clarified that there is no obligation to issue the TDS certificate in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions.
26. Due date of Deposit In case of TDS by Govt.:-
(i) without production of income tax challan, TDS/TCS has to be deposited on the same day,
(ii) in case of payment through challan within 7 days from the end of the month in which tax is deducted/collected.
Form No24G by Govt Deptt. :- In case of TDS/TCS without production of income tax challan deductor will report TDS to PAO (Pay & A/c officer) or DDO, then PAO/DDO will submit form no. 24G to NSDL within 10 days from the end of the month. BIN (Book Id. No.) will be generated for each deductor. The BIN details and amount of TDS reported in the quarterly TDS/TCS Statement filed by the DDO will be matched with the respective details filed in Form No.24G filed by the PAO at TIN Central System for accepting TDS/TCS Statement and for verification purpose.
27. Person responsible for paying :- presently person responsible for paying is not clear in case of Central or State Govt. deptt., now it proposed w.e.f. 1 July 2012 that Drawing and Disbursing Officer or any other persons ( by whatever name called) responsible for making payment shall be responsible for paying U/s 204.
28. Form for TDS returns :- Form 24Q applicable for TDS on salary, 26Q in case of other TDS, 27Q for payment to non-resident, 27EQ for TCS.
29. Intimation of TDS :- presently intimation of TDS processing ( issued U/s 200A) cannot be subject of rectification U/s 154 of the act or appeal, presently only notice U/s 156 of TDS can only be rectified or appealed now w.e.f. 1 July 2012 it is proposed that intimation of TDS processing can also be subject to rectification U/s 154, appealable U/s 246A and deemed to be notice of demand U/s 156.
30. Order against TDS statement not filed :- Presently U/s 201 if TDS statement has been filed then order against it can be passed within 2 years from the end of the financial year in which the statement is filed and in four years from the end of the financial year in which the payment (without TDS) is made or credited. Now time limit of 4 years is extended to 6 years with retro. Effect, and it will be applicable from 1 April 2010.
31. Furnishing of form No. 16A/27D :- For TDS deducted on or after 1-4-2011 by companies including banking companies and cooperative banks , form no 16A is to be issued directly downloaded from the tin website ( www.tin-nsdl.com) and this provision will be applicable to all deductors issuing form no. 16A for tax deductible on or after 1-4-2012, and all such deductors will have to verify and authenticate the correctness of this form.
32. PENALTIES :-
(i) Sec. 271C/271CA :- If a person fails to deduct/collect whole or any part of tax, then such persons shall be liable to penalty equal to the amount of tax, which such person failed to deduct or pay.
(ii) Sec. 271H :- w.e.f. 1 july 2012 penalty ranging from 10000 to Rs. 1 Lakh may be imposed on failure to submit or on furnishing incorrect TDS/TCS return.
(iii) Sec. 272A(2) :- Penalty of Rs. 100/- per day on failure to furnish TDS/TCS returns [U/s 200(3)/206C(3)/], or failure to furnish any statement referred U/s 206/206A(1) or 206C, or failure to deliver in due time form no 15G/15H/27C, or failure to furnish form no. 16/ 16A/ 12BA/ 27D . Penalty should not exceed the tax deductible or collectible. Penalty for delay in filing TDS/TCS returns (Sec. 200(3)/206C(3) will not be applicable w.e.f. 1-7-2012 because it is replaced by Sec. 234E.
(iv) Sec. 272BB(1)/(1A)/BBB :- If a persons fails to apply for TAN or to quote TAN number in returns or certificates then penalty of Rs. 10000/- may be imposed.
(v) Sec. 273B provides that if the assessee proves that there was reasonable cause for delay or default then penalty cannot be imposed under aforesaid sections.
33. Prosecution Sec. 276B- TDS/276BB-TCS :- If a person fails to deposit TDS/TCS then he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. Failure to deduct or collect Tax is not an offence but failure to deposit TDS/TCS is an offence U/s 276B/BB. In view of Sec. 278AA no person shall be punishable for any failure referred to in Sec. 276B (not Sec. 276BB) , if he proves that there was reasonable cause for such failure . Offences U/s 276B/BB can be compounded by the Chief Commissioner or Director General. Compounding fee is 2% p.m. of the tax. As per Sec. 279A offence U/s 276B (not 276BB) is a non-cognizable (in which no FIR or arrest can be done without specific permission of the court.).
In case of Govt. deductors TDS return due date is 31st july, 31st Oct., 31st Jan. and 15 May.
Conclusion :- In conclusion it can be said that provisions relating to TDS are very wide and has huge penal consequences, so before taking any action relating to TDS matter it is advisable to refer Act and rules and latest provisions and case laws, and even more may take expert advice to avoid any penal consequences.
--- In ghaziabad_ca@yahoogroups.com, "Vinod" <sancheti_v@...> wrote:
>
> Dear Sir
> One of my client received a Intimation under section 200A of Income Tax Act. The sum has been determined as per intimation.
>
> Date of TDS Dedution is 31-July-2012
> Due date for Payment of TDS : 07-Aug.-2012
> Date of Actual Payment of TDS : 29-Aug-2012
>
> He paid one month interest for late payment of TDS Amount. But as per justification Report and Intimation Interest is payable for 2 Months.
>
>
> Guide in this Matter.
>
> CA Vinod Sancheti
> Jodhpur.
>
FCA, DISA (ICAI)
203 MANAS BHAWAN EXTN.,
11, RNT MARG, NEAR HOTEL SHREEMAYA,
INDORE (M.P.)
9827036956, 9424818719, 0731-2520111
rajeshmehta_indore@yahoo.com
DATE 17th JAN, 2013
Some useful provisions relating to TDS :-
Nowadays TDS/TCS are the main tool of collecting taxes by the Government. It is a way to collect taxes, like a bee which collects honey without causing pain to the flower. It is similar to "pay as you earn" scheme, known as withholding tax in many countries like USA. Government has made possible fastest issue of refunds through ECS, so now persons from whose income TDS is deducted are now not uncertain over the fate of their refund arising out of TDS. However persons who are deducting TDS has to be much regular so that correct and timely credit is reflected in deductees form 26AS. Some of the TDS/TCS provisions, mainly with reference to salary, which are of routine use are summarized as under :-
1. Tax deduction at source from salaries Every person who is responsible for paying any income chargeable under the head "Salaries" shall deduct income-tax on the estimated income of the assessee under the head "Salaries".The income-tax is required to be calculated on the basis of the tax rates applicable to current financial year and shall be deducted at the time of each payment. No tax will, however, be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year 2012-13 exceeds Rs. 2,00,000/-, or as the case may be, depending upon the age of the employee. Deduction U/s 80CCF regarding investment in Infrastructure bonds is not available from Fin. Yr. 2012-13, but deduction U/s 80CCG regarding investment in equity will be allowed to new investors upto maximum of Rs. 25000/- on investment of Rs. 50000/-, only once, not in subsequent year, if a persons has bank interest income he will be allowed deduction of maximum of Rs. 10000/- U/s 80TTA, in addition to mediclaim premium paid, a person will be allowed Rs. 5000/- incurred for preventive health check-up, paid even cash, for him and his family dependant on him, subject to maximum limits specified U/s 80D.
2. Income under any Other head: (i) Section 192(2B) enables a taxpayer to furnish particulars of income under any head other than "Salaries" ( not being a loss under any such head other than the loss under the head " income from house property") received by the assessee for the same financial year and of any tax deducted at source thereon. Such particulars may be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under Rule 26B(2) of the Rules and shall be annexed to the simple statement, as under:
I, _________ (name of the assessee), do declare that what is stated above is true to the best of my information and belief.
(ii) Such income should not be a loss under any such head other than the loss under the head "Income from House Property" for the same financial year. DDO shall take such other income and tax deducted at source, if any, on such income and the loss, if any, under the head "Income from House Property" into account for the purpose of computing tax deductible in terms of section 192(2B) of the Act. However, this sub-section shall not in any case have the effect of reducing the tax deductible (except where the loss under the head "Income from House Property" has been taken into account) from income under the head "Salaries". In other words, the DDO can take into account any loss (negative income) only under the head "income from House Property" and no other head for working out the amount of total tax to be deducted.
3. Relief When Salary Paid in Arrear or Advance: Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89(1) he may furnish to the person responsible for making the payment, such particulars in Form No. 10E duly verified by him, and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars and take the same into account in making the deduction
4. Adjustment for Excess or Shortfall of Deduction: The provisions of Section 192(3) allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within that financial year itself.
5. Form 15G/15H for interest on deposits :- w.e.f. 1st July, 2012 Form no. 15G is applicable for the age below 60 years & 15H for the persons who completes the age of 60 years at any time during the financial year. The age was 65 years upto 30 Jun 2012.
6. Income limit for furnishing 15G :- A person (other than senior citizen) including resident individual
(other than a company or firm) can furnish form No.
15G if :-
(i)His income from interest does not exceed the maximum
amount which is not chargeable to income tax and
(ii) Tax on his estimated total income will be nil for that
assessment year.
7. Income limit for furnishing 15H :- A senior citizen can furnish form No. 15H if tax on his estimated total income will be nil for that assessment year.
8. When & where to submit 15G/H :- Form 15G/H must be obtained before or at the first moment, when the interest crosses the limit of Rs. 5000(other than banks)/10000/-(in case of banks) during the financial year, it should not be taken after crediting or paying the interest. After obtaining, one copy of it must be submitted by the payer to the Commissioner on or before 7th day of next following month in which the form is furnished to him.
9. 15G by charitable trusts & institutions :- In view of rule 28AB a charitable or religious trust or institution who claims exemption U/s 11 or 12 or educational institutions/hospital/university etc. required to file return U/s 139(4C) cannot furnish form no. 15G if their interest income exceeds the basic exemption limit i.e. Rs. 1.80 Lakh for A.Y. 2012-13 and Rs. 2 Lakh for A.Y. 2013-14, but it will have to apply in form No. 13 for nil deduction.
10. No TDS from income of notified institutions :- By insertion of Sec. 197A(1F) Finance Act 2012 has made a provision that no deduction of tax shall be made from such specified payment to such institution, association or body or class of institutions, associations or bodies as may be notified by the Central Govt. in the official Gazette in this behalf.
11. Certificate of lower rate :- Assessee can apply in new form No. 13 for lower rate or nil TDS. Form No. 13 has been amended w.e.f. 1st April 2011 in which information relating to 3 years assessed income, 3 years income tax returns alongwith enclosures, existing income tax dues, pending income tax and TDS returns, Gross turnover, gross profit, net profit, copies of P.& L. A/c, balance sheet, audit report, details of exempt income, has to be given. In case of charitable trusts and institutions it is necessary that all returns upto date have been filed. Certificate will be issued on plain paper generated through compuer system having serial number, its one copy will be sent directly to the payer and one copy to the payee. Trust and institutions will have to furnish to the assessing officer, half yearly details of income received without deducting tax on the basis of nil certificate issued to it.
12. Furnish PAN in all TDS/TCS correspondence :- It is necessary to quote PAN of the deductee and the deductor in all correspondence, bills, vouchers exchanged between them. However in case of Central/State Govt. departments pan is not required.
13. Credit of TDS to other person :- When whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, then credit of whole or part of that TDS shall be given to that other person and not to the deductee. For this, deductee will have to file a declaration with the deductor specifying name, address, pan of the person to whom credit of TDS is to be given alongwith reasons for giving credit to that other person, then deductor will file TDS return accordingly.
14. Credit of TDS to which year :- Credit for TDS shall be given for that assessment year for which the income is assessable. Where income is assessable over a number of years, credit for TDS shall be allowed across those years in the same proportion in which the income is assessable to tax. Credit for TDS shall be on the basis of TDS return and claim made by the claimant in his income tax return and subject to verification.
15. How to calculate interest on late payment of TDS :-
(a) If a person liable to deduct TDS fails to deduct whole or part of TDS then he will be liable to pay U/s 201(1A) simple interest @ 1% 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,
(b) if tds is deducted but not paid then @ 1.5% for every month or part of 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.
For example a person has deducted tds Rs. 12500/- on 25 April, 2011 then he is liable to deposit tds on 7 may 2011 but if he pay tds on 18 may 2012 then here delay is 13 months so interest will be 19.5%, if tds is deposited on 24 may 2012 even though delay is 13 months, but if tds is deposited on 26 may, 2012 then delay is 14 months, i.e. whole month is reckoned from the date of deduction and to the date of deposit of TDS.
16. Late fees for TDS/TCS returns :-Now w.e.f. 1st July, 2012, for TDS deductible on or after 1st Jul 2012, return is filed late, then U/s 234E late fees of Rs. 200/- per day will have to be deposited before filing TDS / TCS return, however it is specified that late fees should not exceed TDS/TCS for that quarter. In addition to this, if TDS and late fee and interest due thereon as well as TDS return is not deposited within one year from the due date then penalty U/s 271H ranging from 10 thousand to 1 lakh may be imposed.
17. Deemed date of payment of Tax :- presently if the assessee has failed to deduct TDS and the payee has discharged his tax liability , even though deductor is liable to pay interest U/s 201(1A) from due date of TDS to the date of tax paid by the payee. Now w.e.f. 1-7-2012 it is proposed to amend U/s 201 that if the payee has furnished the return of income and paid tax on such income and payer furnishes a certificate from Chartered Accountant to this effect, then date on which return is furnished by the payee will be treated as date of payment of TDS and not the date of actual date of payment of tax by the payee, i.e. payer will be required to pay interest U/s 201(IA)(i) till date of filing of return by the payee.
18. No interest U/s 220(2) :- When interest is charged U/s 201(1A) on the amount specified in the intimation issued U/s 200A(1), then no interest will be charged for the same amount for the same period U/s 220(2).
19. TDS on rent U/s 194-I :-
(i) TDS on rent is applicable in case of land, building ( incl. factory building, machinery, plant, equipment, furniture, fittings.
(ii) if there are more than one payee/co-owners, each having definite and ascertainable share then limit of Rs. 1.80 Lakh is applicable to each co-owner.
20. TDS on service tax component :- TDS is deductible on the entire consideration including service tax but in the case of TDS on rent, TDS will not be deducted on service tax component included in rent.
21. TDS on payment to transporter :- In view of Sec. 194C(6) no tds is required to be deducted on payment to transport contractor during the course of plying, hiring or leasing goods carriage, if he furnishes his PAN, however such information i.e. name of transporter, amount paid or credited, his PAN will have to be submitted in quarterly e-filing of tds return even in case of nil TDS . However TDS @ 20% will have to be deducted if the transporter does not furnish his PAN.
22. Due date of depositing TDS :- TDS deducted on income credited or paid on any day in the month of march can be deposited upto 30th April, and in any other month within 7 days from the end of the month.
23. 20% TDS for wrong PAN :- If deductee's PAN is not available or invalid then it will be assumed that deductee has not furnished his PAN to the deductor and then 20% TDS will be deductible.
24. Penalty for wrong information :- On furnishing incorrect information (e.g. wrong PAN & amount) in TDS return, w.e.f. 1st july, 2012 penalty ranging from 10 thousand to 1 lakh may be imposed U/s 271H(1)(b).
25. Issue of TDS / TCS Certificate :- Form no. 16A /27D are to be issued within 15 days from the due date of filing of quarterly TDS / TCS returns:-
. (i) i.e. in case of all deductors except deductors:- upto 30 July, 30 Oct, 30 Jan, 30 May ,
(ii) i.e. in case of Government deductors :- upto 15 Aug., 15 Nov., 15 Feb., 30 May).
& form no. 16 (Salary) is to be issued on or before 31 May. If the DDO fails to issue these certificates to the person concerned, as required by section 203, he will be liable to pay, by way of penalty, under section 272A(2)(g), a sum which shall be Rs. 100/-for every day during which the failure continues.
It is, however, clarified that there is no obligation to issue the TDS certificate in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions.
26. Due date of Deposit In case of TDS by Govt.:-
(i) without production of income tax challan, TDS/TCS has to be deposited on the same day,
(ii) in case of payment through challan within 7 days from the end of the month in which tax is deducted/collected.
Form No24G by Govt Deptt. :- In case of TDS/TCS without production of income tax challan deductor will report TDS to PAO (Pay & A/c officer) or DDO, then PAO/DDO will submit form no. 24G to NSDL within 10 days from the end of the month. BIN (Book Id. No.) will be generated for each deductor. The BIN details and amount of TDS reported in the quarterly TDS/TCS Statement filed by the DDO will be matched with the respective details filed in Form No.24G filed by the PAO at TIN Central System for accepting TDS/TCS Statement and for verification purpose.
27. Person responsible for paying :- presently person responsible for paying is not clear in case of Central or State Govt. deptt., now it proposed w.e.f. 1 July 2012 that Drawing and Disbursing Officer or any other persons ( by whatever name called) responsible for making payment shall be responsible for paying U/s 204.
28. Form for TDS returns :- Form 24Q applicable for TDS on salary, 26Q in case of other TDS, 27Q for payment to non-resident, 27EQ for TCS.
29. Intimation of TDS :- presently intimation of TDS processing ( issued U/s 200A) cannot be subject of rectification U/s 154 of the act or appeal, presently only notice U/s 156 of TDS can only be rectified or appealed now w.e.f. 1 July 2012 it is proposed that intimation of TDS processing can also be subject to rectification U/s 154, appealable U/s 246A and deemed to be notice of demand U/s 156.
30. Order against TDS statement not filed :- Presently U/s 201 if TDS statement has been filed then order against it can be passed within 2 years from the end of the financial year in which the statement is filed and in four years from the end of the financial year in which the payment (without TDS) is made or credited. Now time limit of 4 years is extended to 6 years with retro. Effect, and it will be applicable from 1 April 2010.
31. Furnishing of form No. 16A/27D :- For TDS deducted on or after 1-4-2011 by companies including banking companies and cooperative banks , form no 16A is to be issued directly downloaded from the tin website ( www.tin-nsdl.com) and this provision will be applicable to all deductors issuing form no. 16A for tax deductible on or after 1-4-2012, and all such deductors will have to verify and authenticate the correctness of this form.
32. PENALTIES :-
(i) Sec. 271C/271CA :- If a person fails to deduct/collect whole or any part of tax, then such persons shall be liable to penalty equal to the amount of tax, which such person failed to deduct or pay.
(ii) Sec. 271H :- w.e.f. 1 july 2012 penalty ranging from 10000 to Rs. 1 Lakh may be imposed on failure to submit or on furnishing incorrect TDS/TCS return.
(iii) Sec. 272A(2) :- Penalty of Rs. 100/- per day on failure to furnish TDS/TCS returns [U/s 200(3)/206C(3)/], or failure to furnish any statement referred U/s 206/206A(1) or 206C, or failure to deliver in due time form no 15G/15H/27C, or failure to furnish form no. 16/ 16A/ 12BA/ 27D . Penalty should not exceed the tax deductible or collectible. Penalty for delay in filing TDS/TCS returns (Sec. 200(3)/206C(3) will not be applicable w.e.f. 1-7-2012 because it is replaced by Sec. 234E.
(iv) Sec. 272BB(1)/(1A)/BBB :- If a persons fails to apply for TAN or to quote TAN number in returns or certificates then penalty of Rs. 10000/- may be imposed.
(v) Sec. 273B provides that if the assessee proves that there was reasonable cause for delay or default then penalty cannot be imposed under aforesaid sections.
33. Prosecution Sec. 276B- TDS/276BB-TCS :- If a person fails to deposit TDS/TCS then he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. Failure to deduct or collect Tax is not an offence but failure to deposit TDS/TCS is an offence U/s 276B/BB. In view of Sec. 278AA no person shall be punishable for any failure referred to in Sec. 276B (not Sec. 276BB) , if he proves that there was reasonable cause for such failure . Offences U/s 276B/BB can be compounded by the Chief Commissioner or Director General. Compounding fee is 2% p.m. of the tax. As per Sec. 279A offence U/s 276B (not 276BB) is a non-cognizable (in which no FIR or arrest can be done without specific permission of the court.).
In case of Govt. deductors TDS return due date is 31st july, 31st Oct., 31st Jan. and 15 May.
Conclusion :- In conclusion it can be said that provisions relating to TDS are very wide and has huge penal consequences, so before taking any action relating to TDS matter it is advisable to refer Act and rules and latest provisions and case laws, and even more may take expert advice to avoid any penal consequences.
--- In ghaziabad_ca@yahoogroups.com, "Vinod" <sancheti_v@...> wrote:
>
> Dear Sir
> One of my client received a Intimation under section 200A of Income Tax Act. The sum has been determined as per intimation.
>
> Date of TDS Dedution is 31-July-2012
> Due date for Payment of TDS : 07-Aug.-2012
> Date of Actual Payment of TDS : 29-Aug-2012
>
> He paid one month interest for late payment of TDS Amount. But as per justification Report and Intimation Interest is payable for 2 Months.
>
>
> Guide in this Matter.
>
> CA Vinod Sancheti
> Jodhpur.
>
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