introduction to tds

8/6/2019 Introduction to Tds

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PROJECTED BY:

SIDDHI NAIK

ROLL NO:29

SYMMS(IMS)


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(T I T L E )

Summer Internship Report submitted to University of Mumbai in

Partial Fulfillment for the award ofMaster of ManagementStudies in

VIVA INSTITUTE OF MANAGEMENT STUDIES (IMS)By SIDDHI

N.NAIK (Roll No) :29

For the summer Internship at, VALERIAN RODRIGUES AND CO

VIVA INSTITUTE OF MANAGEMENT STUDIES

(Affiliated to University of Mumbai, Approved by AICTE New

Delhi) INDIA.

Month (MAY & JUNE) Year 2011


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Evaluation Report

Summer Internship 2010-11

Basic Information

Name of the Student-SIDDHI N.NAIK

Year and Roll No-29

Name of the Company- VALERIAN RODRIGUES AND CO.

Name of the Training Supervisor ELISITA RODRIGUES

Designation of the Training Supervisor OFFICE ADMINISTRATOR

Area of Training--VIRAR

Special Project if any TAXATION

Score Card

Please rate the following attributes on a scale of 01-05.

(01=Average, 02=Good, 03=Very Good, 04=Excellent and 05=Outstanding)

1. Attendance 52. Punctuality 53. Attitude 44. Performance 45. Initiative 56. Interpersonal Skills 47. Diligence Level 48. Subject Knowledge 49. Personal Grooming 410.Communication Skills 3

Total Score 42

Any other Special remarks and Appreciation: - During her summer internship she did excellent job and

took initiative in various part. I wish her best luck for her professional carrier

Signature of Training Supervisor Official Seal of the Company


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Certificate of Originality

This is to certify that the Summer Project titled TAX DEDUCTION AT SOURCE(TDS) is an original

work and is being submitted in partial fulfillment for the award of the Masters Degree in Management

Studies of University of Mumbai. This Summer Project report has not been submitted earlier either to

this university or to any other affiliated college of this university or to any other university /

institution for the fulfillment of the requirement of the MMS Course.

Signature of Student

Place:

Date:


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-:INDEX:-

SR.NO: CONTENT PAGE NO:

INTRODUCTION

WHAT IS TDS

COMES UNDER ACT?


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SECTION I:

INTRODUCTION TO TDS:

In this article I will be writing about the Tax Deduction at Source(TDS) and the rate for some of

the TDS. We all aware that we need to pay the Income Tax for our income. In some cases theemployer will be taking care of paying the total tax amount to the government in behalf of all theemployees by deducting the tax amount from their salaries. This process is called TDS or Tax

Deduction at Source. This article will explore some of the facts related to TDS.

What is TDS?

Taxes are deducted at the time of calculating your income. For example, you are working for a

company X. Every money they will be paying you the salary of Rs.350000. If you are lookinginto your pay slip there is a Colum name IT which mention the tax amount deducted from your

salary. Actually the tax amount is deducted by your company and then pays to the government.

Whereas if you are not working for any company or doing the professional jobs like Doctor,Charted Accountant(CA),etc. You are liable to pay the tax to the government.

Who is eligible for TDS:

Not everyone can deduct the tax at source. You have to apply for the Tax Deduction Account

Number(TAN). TAN or Tax Deduction and Collection Account Number is a 10 digit alphanumeric number required to be obtained by all persons who are responsible for deducting or

collecting tax. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCSreturn), any TDS/TCS payment challan and TDS/TCS certificates.

How to apply for TAN?

An application for allotment of TAN is to be filed in Form 49B and submitted at any of the TIN

Facilitation Centers meant for receipt of e-TDS returns. Addresses of the TIN FC are available atwww.incometaxindia.gov.in orhttp://tin.nsdl.com. TAN is allotted by the Income Tax

Department on the basis of the application submitted to TIN Facilitation Centers managed byNSDL. NSDL will intimate the TAN which will be required to be mentioned in all future

correspondence relating to TDS/TCS.


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SECTION: 2

WHAT IS TDS and WHAT IS TCS:

TDS means Tax Deducted at Source. The concept of TDS was introduced in the Income Tax

Act, 1961, with the objective of deducting the tax on an income, at the source of income. It isone of the methods of collecting Income Tax, which ensures regular flow of revenue to theGovernment.

What is TCS:

The seller has to collect tax from the payer who has purchased the following items :

y Alcoholic liquor for human consumptiony Tendu leavesy Timber obtained under a forest leasey Timber obtained by any mode other than under a forest leasey Any other forest produce not being timber or tendu leavesy Scrapy Parking loty Toll plazay Mining and quarrying

The TCS on the above mentioned items vary from 1% to 5%

Deposit of TCS amount- within seven days of the following month.

Issue of TCS certificate- within in one month of collection /debit(form 27D)

The rates of TCS for representative purpose (Financial Year 2010-11):


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(TAX COLLECTION AT SOURCE).Profits and gains from business of trading in alcoholic

liquor, forest produces scrap etc. Every persons ,being a seller shall, at the time of debiting of theamount 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 drafts or b any other mode, whichever

is earlier, collect from the buyer of any goods of the nature specific in column o the table below a

sum equal to the percentage ,specified in the corresponding entry in column of the said table of

such amount as income tax:

Sr.no No. of goods percentage

1) Alcoholic liquor for human consumption One per cent

2) Tendu leaves Five percent

3) Timber obtained under a forest lease Two & one-halfpercent

4) Timber obtained by any mode other than under forest lease. Two & one-halfpercent

5) Any other forest production not being timber or tenduleaves.

Two & one-halfpercent

6) Scrap. One per cent

Please note :

The information given above is to convey the general understanding of TDS and TCS provisions.

For detailed information Income Tax Act 1961 shall be consulted. The changes in the Act maybe incorporated in the information as and when required.


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SECTION: 3

WHAT IS DEDUCTORMUST DO?

1. Obtain TAN

Every deductor is required to obtain a unique identification number called TAN (Tax DeductionAccount Number) which is a ten digit alpha numeric number e.g.DELH90468K.

This number has to be quoted by the deductor in every correspondence related to Income Tax

matters concerning TDS.

2. He/She should obtain PAN of the deductee.

3. He/She should deduct the tax at correct rate.

4. The tax deducted has to be deposited in the designated banks within specified time.

(Govt. deductors shall transfer the tax deducted through book entry in Government account).Thisis detailed below:

By or on behalf of the Government: on the same day,

By or on behalf of any other person: before the 7th

of the following month.

However, if the amount is credited in the books on 31stMarch then the tax should be remitted by

31stMay.

Note: w.e.f., 01.04.2008 electronic payment of tax has to be done by all corporate assesses andall persons whose cases are auditable under section 44B.

5. Use challan no. 281 for depositing TDS amount.

6. File statements of tax deduction in the prescribed time.

The due dates for filing of TDS/TCS statement are :

y 15th of July forQuarter 1,y 15th of October forQuarter 2,y 15th of January forQuarter 3 andy 15th June for last Quarter however for TCS statements the due date is 30th April.

7. Use correct form to file TDS/TCS Returns. They are:


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y Form 24Q for salariesy Form 26Q for non salariesy Form 27EQ for TCSy Form 27A/27B Control sheet for electronic TDS/TCS

It may be noted that the following persons have to compulsorily file e-TDS /e-TCSstatements

y All government offices/Departmentsy All companies /corporationsy All persons whose cases are auditabley All persons whose TDS statements contain more than 50 deductees.

Dos & Dont's for filing TDS Returns

Dos

y Ensure that TDS return is filed with same TAN against which TDS paymenthas been made & TDS certificate is issued.

y Ensure that correct challan particulars including CIN and amount ismentioned.

y Correct PAN of the deductee is mentioned.y Correct section is quoted against each deductee record.y Correct rate is quoted against each deductee record.y File correction statement as soon as discrepancy is noticedy Retain the original FVU file to enable future correctionsy Make use of free of charge RPU provided through TIN-NSDL.comy Download details of challan from challan status enquiry (TAN based view)

from TIN-NSDL.com

y Registration for TAN enables you to avail additional facilities from TaxInformation System.

y Always verify status of TDS returns from Tin NSDL to ascertain thediscrepancy, if any, and/or whether your TDS return stands accepted or

rejected by the system.

Dont's


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y Don't file late returns as it affects deductee tax credity Don't quote incorrect TAN vis--vis TDS payments

The process of filing of e-TDS /e-TCS returns is available in detail at

following websiteswww.incometaxindia.gov.in orhttp://tin-nsdl.com.

8.Issue TDS certificates as per existing procedure and within the time prescribed

as stated below:

The certificate should be issued within one month from the end of the month in

which the income is credited however for credit entries made on 31stMarch, due

date is 7th

June, except in the case of salary where the certificate has to be

issued by 30th

of April of the following financial year in which the income was

credited.

9.Filee-TBAF (In case of Govt. DDO's where TDS is credited in Central Govt.

account through book adjustments)


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SECTION 3:

Procedure:


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TAN:

Every deductor is required to obtain a unique identification number called TAN (Tax DeductionAccount Number) which is a ten digit alpha numeric number. This number has to be quoted by

the deductor in every correspondence related to TDS.

Format of TAN:

Procedure for getting TAN :

It can be obtained by filing an application in form no. 49B to any of the TIN facilitation Centres

(TIN-FC) namely NSDL. Addresses of the TIN-FC as well as the forms can be downloaded fromthe website www.incometaxindia.gov.in orhttp://tin-nsdl.com. The fee for processing TAN

application is Rs. 60/-. This can be paid by:

Cash at TIN-FC counter

Demand draft or

Cheque or

Credit card

The demand draft/ cheque shall be in favour of 'NSDL-TIN'.


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TAN number will be communicated to the deductor by NSDL.

Nature of payments attracting TDS and rates thereon:

Salary

DDOs must calculate the tax payable by an employee for the year and start deducting tax at

average rate. The term salary includes wages, any annuity or pension, gratuity, any fees,commission, perquisites or profits in lieu of or in addition to any salary or wages. (These

payments are covered under sec. 192 of the Income Tax Act 1961). The income from salaries isrequired to be computed on estimated basis at the beginning of each financial year, taking into

account salaries or remuneration paid or allowed. Income Tax payable on the basis of suchestimated salary income should be deducted at the rate applicable to the corresponding slab of

income every month in equal instalments subject to adjustments depending upon tax savinginvestments made by the deductee.

When an employee is working with more than one employer simultaneously or has changedemployment from one employer to another during the relevant financial year, the employer will

deduct tax on considering the aggregate salary from all sources and tax deducted thereon, if any.

Interest on securities/Dividends/Interest/Insurance commission-

The tax has to be deducted @ 20% fordomestic companies and 10% forothers with somebasic exemption limits, in the case of interest if the amount of interest is up to Rs. 5000/- duringa financial year. however, in the case of interest paid by a banking company, Co-operative

society engaged in the business of banking and a public company engaged in the financing orconstruction of residential houses in India, this limit is Rs. 10000/-.

(These payments are covered under sec. 193, 194, 194A& 194D of the Income Tax Act 1961

resp.).

Winning from lottery, puzzle or games of any sort-

The DDO/deductor must deduct tax @ 30% on any payment above Rs. 5000/-.

(However from 1st

July 2010,the DDO/deductor must deduct tax @ 30% on any payment above

Rs. 10000/-)(These payments are covered under sec. 194B of the Income Tax Act 1961).

Winning from horse races-

The DDO/deductor must deduct tax @ 30% on any payment above Rs. 2500/-.

(However from 1st

July 2010,the DDO/deductor must deduct tax @ 30% on any payment above

Rs. 5000/-).

(These payments are covered under sec. 194BB of the Income Tax Act 1961).


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Contracts (including work land labour contract) -

The tax has to be deducted @ 2% on contract payments and 1% forsubcontract andadvertisement contract payments. The tax is required to be deducted if a single payment exceeds

Rs. 20000/- or if the aggregate payments exceed Rs. 50000/- per annum.

(However from 1st

July 2010, Rate of deduction is @ 2% on all contract payments includingsubcontract and advertisement contract payments. The tax is required to be deducted if a single

payment exceeds Rs. 30000/- or if the aggregate payments exceed Rs. 75000/- per annum).

(These payments are covered under sec. 194C of the Income Tax Act 1961).

Insurance commission-

Any person responsible for paying to a resident any remuneration or reward whether by way of

commission or otherwise, for procuring insurance business is required to deduct tax @ 20% for

companies and 10% for other person if the amount credited or paid is more than Rs. 5000/- ina financial year.

(However from 1st

July 2010, any person responsible for paying to a resident any remuneration

or reward whether by way of commission or otherwise, for procuring insurance business isrequired to deduct tax @ 20% for companies and 10% for other person if the amount credited or

paid is more than Rs. 20000/- in a financial year).

Payments to Non residents sportsmen or sport association.-

The tax has to be deducted @10% on making any payment.

(These payments are covered under sec. 194E of the Income Tax Act 1961).

Commission on sale of lottery tickets and on brokerage-.

The tax has to be deducted @10% with some basic exemption.

(These payments are covered under sec. 194G & 194H of the Income Tax Act 1961).

Rent-

Any amount paid as rent above Rs. 120000/- per year will attract TDS provisions @ 10%forIndividual & HUF and 20% for others. (TDS will be 2% for the use of any machinery or plant

or equipment).

(However from 1st

July 2010, any amount paid as rent above Rs. 180000/- per year will attract

TDS provisions @ 10% for Individual & HUF and 20% for others).

(These payments are covered under sec. 194I of the Income Tax Act 1961).


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Fees for professional or technical services/royalty/Income on units of mutual

funds/compensation on acquisition of certain immovable assets-

The tax has to be deducted @10% with some basic exemption limits.

(These payments are covered under sec. 194J, 194K & 194LA of the Income Tax Act 1961).

Payment on Acquisition of certain immovable property-

Any amount above Rs. 100000/- paid as compensation or enhanced compensation on account ofcompulsory acquisition under any law in force, of any immovable property other than

agricultural land will attract TDS provisions @ 10%.

TDS Process

1. Deductee (Seller) provides Services and Bill to the Deductor (Buyer).2. Deductor makes the payment after deducting TDS.3. Deductor remits the TDS amount into Bank (Treasury).4. Bank (Treasury) remit the amount to the Government Account.5. Deductor Issues Form 16A to Deductee for the TDS amount deducted.6. Deductor Files the e-TDS to NSDL.7. NSDL uploads the e-TDS information to Income Tax Department.8.

Deductee Files the Return with Form 16A to Income tax Department.


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SECTION: 4

TDS certificate

TDS certificates:

The certification from the deductor, for the deduction and payment of the respective TDSamount to the bank, issued to the deductee is a TDS certificate.

How it will be useful:

The deductee should produce the details of this certificate, during the regular assessment ofincome tax, to adjust the amount of TDS against the Tax payable by the Deductee [assessee].

Mandatory/Optional:

1. It is mandatory for all the deductors to issue the Certificate of tax Deducted to therespective deductee. [Refer Section 203(1) and 203(2)].

2. However, there will be no requirement to furnish a certificate for the deductions made onor after 01st April 2010 [Refer Section 203(3)]

1. This has been amended four times on 01/04/2005, 01/04/2006, 01/04/2007 and01/04/2008 by respective finance acts.

Types of TDS certificates:

1. SalariesIn case of Salaries, the certificate should be issued in FORM 16 containing the Tax computation

details and the Tax deducted & Paid details. This refers to the details submitted over Form 24Q.

1. Non-salaries:In case of Non-Salaries, the certificate should be issued in FORM 16A containing the Tax

deducted & Paid details. Separate certificates should be prepared for each Section [nature ofpayment]. This refers to the details submitted over Form 26Q and 27Q.

1. TCS:In case of Tax Collected at Source, the certificate should be issued in FORM 27D containing theTax Collected & Paid details. Separate certificates should be prepared for each Section [nature of

collection]. This refers to the details submitted over Form 27EQ.


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SECTION: 5

Issuing the certificate:Form 16:

1.

Form 16 should be issued to each employee within one month from the close of thefinancial year in which such deduction was made [refer Rule 31(3)].2. If the certificate is lost, deductor may issue a duplicate Certificate on a plain paper giving

necessary details as contained in Form No. 16 [or Form 16Aa as applicable]. [Refer Rule31(4)].

3. Deductor can issue the certificate to the employee, within one-month from the end ofthe month during which salary is paid, anytime during the financial year. This will be

applicable mainly where employee changes the job during the financial year.

Form 16A:

1.

Form 16A should be issued to the deductee within one month from the end of themonth during which the credit has been given or the sums have been paid [referRule 31(3)].

2. Where more than one Form 16A is required to be furnished to deductee for TDS madeduring a financial year, deductor may on request from deductee, issue within one month

from the close of such financial year a consolidated certificate in Form No. 16A for TDSmade during whole of such financial year. [Refer Rule 31(3)].

3. If the certificate is lost, deductor may issue a duplicate Certificate on a plain paper givingnecessary details as contained in Form No. 16A. [Refer Rule 31(4)].

Generating Numbers for certificate:

The deductor has provision to generate Form 16A for any duration from the software. This canbe achieved in manually giving the numbers to the certificates or making the numbers

automatically!!

Below are the main points for generation of numbers.

1. Every certificate number will be contain following in the same order, separated byforward-slash.

a. Deductee IDb. Sectionc. Certificate Number

2. Deductor can generate the numbers automatically, per deduction/Month/Quarterly/or forwhole Year, as per his convenience.

3. The certificate will be generated referring these numbers and one certificate will begenerated for unique number.

4. If there are no certificate numbers assigned to deductions, software will not generateForm 16A for that/those deduction.


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SECTION: 6

How to deduct correct TDS

The sections 192 to 196 of Income Tax Act, directs Any person responsible for paying any

income chargeable to tax to deduct income-tax thereon at the rates specified respectively.

Salaries:While making the payment of Salary, deductor should consider the following and deduct correct

TDS from the payment being made.

1. Calculate the annual Approximate/Actual Salarya. Calculate the Exact Taxable Salary amount Paid/Payable till current month for the

financial year.

b. Calculate the approximate salary that will be paid for rest of the FY, assuming thecurrent month salary for rest of the year salary.

2. Add any other income reported by the Assesses [Employee].3. Deduct if any Loss declared by the Employee, from the annual taxable salary. Note that,

only House property loss (interest in case of Self Occupied House Property) should beconsidered.

4. Deduct the allowed deductions declared by employee under Section 80C, 80D, 80G, etc.5. Calculate the Income Tax, Surcharge and cases on the net Income, as per the Rates in

Force6. Deduct if any rebate U/s 88E or Relief U/s 89. (explain the heads)7. Keeping it as total tax, now deduct the TDS made till last month from it.8. Divide the net TDS by Remaining number of months in the FY, including current

month.9. Deduct this amount from employees Salary

Non Salaries:A deductor accordingly, should follow the below points while making/preparing each payment.

1. Categorizing each payment to relevant type ofPayment or Section.2. Check that the payment is not a payment is being done to Government, Reserve Bank,

certain corporations established under Central Act, orMutual Funds. [comes under

Section 196]3. Refer the Threshold limit for such section or Type ofPayment.4. Refer the Rate of Tax

a. Check the Assesses [party] has not submitted his declaration under Section 197Afor non-deduction of TDS. [Only for payment of Interest (Securities and Otherthan securities), Dividends and Interest on NSC, Via: sections 194, 194A, 193,

194EE]b. Check the Assesses [party] has not submitted a certificate by Assessing Officer

under Section 197 for non-deduction of TDS or deduction at a Lower Rate.c. Check the relevant rate of TDS under respective type of payment [sections 193 to

196]5. Get the effective rate TDS, including Surcharge and Cass [if any].


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6. Deduct the amount as per the effective rate of TDS from the amount being paid.Consequences of not making Tax deduction:If Deductor fails to deduct the whole or any part of the tax as TDS, then,

1. Any payment made as interest, commission or brokerage, rent, royalty, fees forprofessional services or fees for technical services, or amounts payable to a contractor orsub-contractor, on which TDS is deductible and such TDS has not been deducted or after

deduction, has not been paid during the previous year [or within appropriate time limit],such amount will be added-back to the income chargeable to tax.

2. Simple interest will be payable at 1% per month on the amount of tax [TDS] from thedate on which such tax was deductible to the date on which such tax is actually paid.

Such interest should be paid before furnishing the quarterly statement for respectivequarter. [Refer Section 201(1A)]

3. Attracts penalty, which is equal to the amount of tax which such person failed to deduct.There can also be some additional penalty imposable Joint Commissioner. [Refer

Section 271C]

When to Deduct TDS

(i) At the time of actual payment or credit, whichever is earlier: -Tax is to be deducted at source a the time of credit to the payees account or on accrual of thepayment at the end of the accounting year or at the time of payment in cash or by cheque .

or draft or by any other mode, whichever is earlier, in respect of the following payments:(a) Interest on securities

(b) Internet on tome deposits with banks(c) Interest other than interest on securities

(d) Payment to contractors(e) Payment to sub-contractors

(f) Insurance Commission(g) Payments to non-resident sportsmen and sports associations

(h) Payment of commission, etc. on sale of lottery tickets(i) Payment of commission or brokerage

(j) Payment of rent(k) Payment of fees for professional and technical services

(l) Payment of income on units of UTI orMutual Funds upto 31.03.2003

(m)P

ayment of interest or any other sum (except salary and dividends subjected to additionalincome -tax u/s 115-O) to a non-resident(n) Payment of income/long-term capital gains in respect of units to an offshore fund

(o) Payment of interest/dividend/long-term capital gains(p) Payment of income in respect of securities to a foreign institutional Investor


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(ii) At the time of Actual Payment Tax is to be deducted at source at the time of actual payment in respect of the following

payments: -

(a) Salaries(b) Dividends(c) Winning from lotteries, crossword puzzles, card games of other games

(d) Winning from horse races(e) Payment on account of repurchase of units byMutual Fund or Unit Trust of India under

section 80CCB(f) Payment in respect of deposits under the National Saving Scheme

(g) Payment of compensation/consideration for compulsory acquisition of any immovableproperty(other than agricultural land)

Related posts:

1. Mutual Fund And Tax Benefit2. At What Rates Capital Gains is Taxed?3. Mutual funds loss allow or disallow after dividend recieved4. Penalties for Failure to Deduct and Deposit TDS5. Income Exempt Under Section 10

SECTION: 7

Due date of payment:

Due date for payment of TDS in respect of payments/Credit Related to March 2011 (Including

the Expenses/Provisions/ Credits on 31St March) is April 30. So those who have not made TDS

payment by 7th April can relax and pay the same by 30th April without any late payment Interest

and without worrying for disallowance of expenses. The amendment in due date is made vide

Notification No. 41/2010 dated 31 May 2010 (new Notification), notified Income-tax (Sixth

Amendment) Rules, 2010 which amends the Rules. The Notification is effective from 1 April

2010 and applies to tax deducted/collected on or after 1 April 2010.

So now the time limit for deposit of TDS for the entire month ofMarch is rationalized to 30April instead of two separate time limits viz. 7 April for TDS up to 30 March and 31 May for

TDS as of 31 March.Deductors will also need to note that the time limit for filing quarterly TDSstatements for last quarter of FY has been advanced to 15 May instead of 15 June.

The time tested 'TDS certificate' in form 16A is being abolished. But it is being replaced by on-line

credit as evidenced by form an annual statement in electronic form 26AS.

YourPAN card entitles you to a number of facilities, which may be unknown to you. Two importantfeatures applicable to all PAN card holders are mentioned below:


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The first point to remember is that even if you have a PAN card, you need not file your IT returnautomatically unless you have a taxable income or a refund claim. [Section 139(1)]

It is possible that tax has been deducted at source from salary, professional income and other sources

such as interest, rent etc. But, the Income tax Department, on its part will reconcile the data receivedfrom banks and deductors through NSDL and send an annual statement (26AS) in electronic form to

the deductees before 31st July, 2009. (IT Rule 31AB).Refund for excess tax deducted at source will be given only on the basis of 26AS information & not

on the basis of certificates issued by the deductor (s). [IT Rule 37BA]. Moreover, 26AS informationis available in electronic form only and you must get proper authorization from NSDL before having

access to your 26AS statement. (NSDL Rules)

Under the present conditions, RCA, understands the practical difficulties and is making the processas simple as possible. You can therefore adopt the following procedure if you have a TDS claim:

Contact us with yourP

AN card (original as well as photocopy) and proof of present address. Wewill get for you the authorization acknowledgement which you can use for having access to 26ASstatement in future. (Processing charge Rs.200)

Contact us again with the authorization letter after 20th June and get two printed copies of 26AS

statement for the year ended 31st March, 2009. You can use this statement for reconciling the taxdeduction details. We also offer services for filing of the Income-tax returns.

The rates of TDS for representative purpose (in effect till

30.06.2010):For Salaries:


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Following changes shall be applicable w.e.f. 01.07.2010 till

31.03.2011:For Salaries:


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With effect from 1-4-2010, the deductee shall furnish his PAN (Permanent Account Number) todeductor, failing which tax at the below rates of TDS or at the rate of 20% whichever is highershall be deducted at source. Where PAN provided to the deductor is invalid or does not belong to

the deductee, it shall be deemed that deductee has not furnish his PAN to the deductor and higherrate of TDS as mentioned below shall be applicable. No surcharge, education cases and

secondary and higher education cases is livable for the financial year 2010-11 onwards for TDSpurposes in case of payment to resident. But in respect of TDS on salary, cases will be livable.

Notes: we.f. 1.10.2009, no TDS is to be deducted on payment to a contractor/sub-contractor,

during the course of business of plying, hiring or leasing goods carriages, if the payee furnisheshis PAN to the deductor [sec. 194C(6)]


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Non deduction or deduction at lower rate in certain situations

No Tax has to be deducted for the payment made to Government, RBI, Corporation whose

income is exempt from tax or mutual fund specified u/sec. 10(23D). Also in case where deducteeproduces a non deduction certificate or lower deduction certificate u/sec. 197 of the Income Tax

Act 1961.

Self declaration in Forms 15G and 15H can be filed by the deductee if his income doesn't exceedthe amount chargeable to tax. This self declaration can be filed for dividends, interest and mutual

fund income only. In these cases no tax has to be deducted. However the tax deductor is requiredto furnish copies of this self declaration to the concerned CCIT or CIT as per the rules.

SECTION: 9

e-filing of TAX DEDUCTION AT SOURCE

Facilities for e-filing of TDS returns:

y Through more than 1500 TIN Facilitation Centers inmore than 500 cities

y Direct online upload at www.tin-nsdl.com under Digitaly Signaturey Free Return Preparation software


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y Free File Validation Utilityy Free DeductorManualy Helpdesk for deductors (020-27218080)y Internet based feedback to Deductors and Deducteesy All persons can e-file the TDS.

TAN Registration

1) TAN Registration available at www.tin-

nsdl.com.

2) Authenticated deductors-

y View of the status of all statements filed;y Download of consolidated quarterly e-TDS /

TCS statement for preparation of correction

statement; and

y Special functionalities related to quarterlyTDS /TCS statement.

3) Registration is free.

introduction to tds

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