Basic Understanding of Tax Deducted at Source (TDS)

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www.carajput.com; TDS

Deducted at Source (TDS) has been adopted with the purpose of collecting tax from the source of earning of assesse. According to this concept, an individual (deductor) who is liable to make payment of specified nature to some other person (deductee) shall deduct tax at source and remit the same tax to the Central Government.

TDS has been introduced to collect taxes from the source of earning. As per the Income Tax Act, while someone making a payment is required to deduct tax if payment excessed such levels/limit as specified. Limits or rate of TDS is prescribed by the Tax Department. The TDS is administered by the CBDT, which is come in the preview of the Ministry of finance.

TDS is a Kind of advance tax that must be deducted regardless of the method of payment. Because Tax Deducted at Source is a part of the Income Tax Act, both the Deductee and Deductor the person permanent account number (PAN) are linked to it. In such a case the PAN of the deductee is not uploaded, the Deductor Tax Deducted at Source shall deduct at a rate greater than the following:

  • at the rate prescribed in the Finance Act;
  • at 20%.
  • the rate prescribed in the income tax Act;

Tax Deducted at Source (TDS) IS APPLICABLE:

Below are expenditure & source of income falls under TDS-

  • Technical or consultancy fees.
  • Transfer of any immovable property other than agricultural land;
  • Salary Payment ;
  • Contractor payments
  • Payment of Brokerage or commission
  • Transfer of immovable property
  • Compensation on acquiring immovable property
  • Payment of interest by banks.
  • Charge to the contractor/sub-contractor for the success of the work;
  • Rent payment
  • Payments to freelancers and lawyers
  • Lottery etc
  • Insurance Commission
  • LIC maturity amount
  • Interest-free
  • The rise in demand (for TDS)
  • Penalty tax

Tax Deducted at Source (TDS) IS NOT APPLICABLE :

In the following circumstances, TDS is not applicable as per the income tax Act:

  • Where the person has a holder of a certificate of non-deduction u/s 192 of the Income Tax Act.
  • When the sum is paid towards the State Government or Center and RBI.
  • Payment made towards mutual funds specified U/s 10 (23D) income tax Act.
  • Whenever a payment is made to Central Financial Corporations or State Financial Corporations.
  • Interests paid or credited towards :
  • National Savings Certificate
  • Kisan Vikas Patra issued by the Government of India.
  • Non-Resident External Account
  • Banking Co-operative society as per defined under the income tax act
  • Recurring deposits or Savings account of banks & Co-operative society
  • Banking Company or Bank defined as per banking regulation
  • Trust Unit of the Indian or any other insurance company;
  • Notified body for non-deduction of tax

Benefit of TDS

  • It expands the tax collection framework.
  • This is a platform to transfer the accountability for the collection of taxes between the government and the deductors.
  • It helps to stop tax evasion.
  • As TDS deductions take place all throughout the financial year, this is an efficient method of revenue inflows to the government.

https://carajput.com/learn/compliances-of-tax-deducted-at-sources-tds-.html

Tax Deducted at Source Payment Due Dates

www.carajput.com; TDS Compliances

www.carajput.com; TDS Compliances

Month-wise TDS due date is as follows:

Month Due date
April On or before the Seventh of May
May On or before the Seventh of June
June On or before the Seventh of July
July On or before Seventh August
Aug On or before Seventh September
Sept On or before Seventh October
Oct On or before the Seventh November
Nov On or before the Seventh December
Dec On or before Seventh January
Jan On or before Seventh February
Feb On or before the Seventh March
Mar
  • On or before Seventh April for government deductors
  • On or before Seventh April for non-government deductors

Normal Tax Deducted at Source Return Filing Due Dates

The Dead Line of Quarterly filing of Tax Deducted at Source Returns are as below:

Quarter Period Quarter Due date to file TDS return
April to June 1st Quarter On 31st July of the same FY
July to September 2nd Quarter On 31st Oct of the same FY
October to December 3rd Quarter On 31st Jan of the same FY
January to March 4th Quarter On 31st May of the next FY

https://carajput.com/blog/warning-due-dates-are-closer-than-they-appear/

The government made the New Deadline for TDS Returns Filing for the FY 2020-21

Quarter Quarter Period Quarter Ending Due Date
First Quarter April 2020 – June 2020 30 June 2020 31 March 2021
Second Quarter July 2020 – September 2020 30 September 2020 31 March 2021
Third Quarter October 2020 – December 2020 31 December 2020 31 January 2021
Fourth  Quarter January 2020 – March 2020 31 March 2020 31 May 2021

How do I deposit TDS?

TDS must be deposited on the government portal using Challan ITNS-281.

What’s a TDS certificate?

Form 16, Form 16A, Form 16 B, Form 16 C are all TDS certificates. TDS certificates must be issued by an individual who deducts TDS from an assessee whose TDS income was deducted at the time of payment.

For example, banks issue Form 16A to the depositor when TDS is deducted from interest on fixed deposits. Form 16 shall be given to the employee by the employer.

Frequency of TDS certificate Form Type Certificate issued for Dead Line
Yearly Form 16 TDS on salary payment 31st May
Quarterly Form 16 A TDS on non-salary payments 15 days from due date of filing return
Every transaction Form 16 B TDS on sale of property 15 days from due date of filing return
Every transaction Form 16 C TDS on rent 15 days from due date of filing return

Key Point to be remembered while deducting TDS

  • According to Sections 192 to 194L of the Income Tax Act provide a complete list of Tax Deducted at Source expenditures and sources of income.
  • If the person does not fall within the scope of the income tax slab, he or she may apply Form 15G or Form 15H to the deductor in advance for non-deduction of tax at source.
  • The Tax Deducted at Source refers to each kind of income that reaches a certain threshold.
  • TDS shall be deducted as per the rate of income tax imposed on employees.
  • For many other deductees, the Tax Deducted at Source shall be deducted at the specified percentage at each type of income.
  • Form 15H is intended for senior citizens.
  • Form 15G is intended for all other persons.

Points to be understood for TDS  

  • Any person who deducts TDS must have a TAN as provided for in Section 203 A of the Income Tax Act 1961.
  • Tax Deduction and Collection Account Number is a required condition for TDS returns to be filed. In addition, it should be included in the tax deduction certificate issued.
  • Deductions for TDS are connected to your Permanent Account Number. It is, therefore, necessary to have Permanent Account Number information of the deductee in order to deduct tax at source.
  • Any deductee must request a Tax Deducted at Source certificate to change the amount of tax deducted against the total amount of tax payable.
  • Tax Deducted at Source information can be reviewed using the Tax Credit Form 26AS, which is open to all PAN holders.
  • This consolidated tax statement gives you specific details of the Tax Deducted at Source withheld for the different forms of payments.

SMS Warnings on Greater Transparency

The revenue tax department has sent a text message to the taxpayer from VK-ITDEFL indicating the amount of tax deducted at source (TDS) against the taxpayer’s PAN (Permanent Account Number). The SMS warning will remind you of the TDS credited on your salary, interest, etc. earnings, per quarter. The sum of TDS will be accrued in your Form 26AS for the various financial year.

This program was initiated by the Ministry of Finance to improve transparency and reduce cases of TDS inconsistencies at the time of income tax filing. Taxpayers should cross-check the details given in the SMS with the payment slip information to ensure that there is no discrepancy. TDS mismatch may be a common explanation for incorrect filing of income tax returns.

Decrease in TDS rates i.e. 25% TDS cut to benefit individuals – Effects and results

www.carajput.com; TDS

www.carajput.com; TDS

As part of a Special and Detailed Economic Package of COVID-19 Pandemic – Aatmanirbhar Bharat Abhiyaan, the following steps have been taken with regard to TDS and TCS: W.e.f. Fourteen May 2020, the Government has decreased the rate of TDS, dividends, professional fees, rent payments and other non-salary payments (TDS) and the rate of tax collection (TCS) by 25%. These rates shall be effective from 14 May 2020 and shall remain effective until the end of the financial year, i.e. March 2021, please. This action taken by the government would certainly increase the liquidity in the hands of a person who is already struggling with the financial distress caused by this pandemic. Deduction and collection of tax at a lower rate would leave further discretionary income in the hands of the recipient and would have the desired impact of increased cash flows and liquidity in the market. The effect and benefits of the reduction of TDS rates can be understood as follows:

  • NO subsequent reduction of the tax liability:- TDS rates for non-salary payments rendered to residents and TCS rates for defined receipts have been decreased by 25% of current rates.
  • The new rates would only apply to payments other than wages, such as contract payment, professional fees, rent, interest, dividend, commission, brokerage, etc.
  • The TDS, TCS cut does not minimize the tax burden of taxpayers but allows more money in their pockets.
  • Better management of the Fund:
  • Benefits for a particular section of taxpayers:
  • No TDS relief for expenditure booked before 14 May 2020:, The reduced rates will apply to the remaining portion of the 2020-21 fiscal year, i.e. from 14 May 2020 to 31 March 2021.
  • Lower Operational TDS and TCS rates would also benefit those who usually earn tax refunds.
  • Higher prices for non-furnishing of PAN:
  • The step is anticipated to occur in a liquidity increase of Rs. 50,000 crore.

Fines/ Penalties associated with the TDS

The deductor shall be liable for the fine if the TDS deduction and payment deadlines are violated.

  • Non-deduction of the Tax Deducted at Source(TDS) : In case the deductor/collector fails to collect the tax at source, all these expenses may be disallowed from the assessment of the overall revenue by the tax assessor.
  • For the late deduction of the Tax Deducted at Source(TDS): In case the tax at source is deducted within a day or a few days after payment of the profits, simple interest at a rate of One % per month will be charged on the balance of the tax deducted at source.
  • For late payment of the Tax Deducted at Source(TDS): As mentioned above, there is a monthly due date for the TDS to be deposited with the Government. If the deductor fails to do so it must pay simple interest on the amount deducted as tax at a rate of 1.5 percent per month.
  • For late-filing of Tax Deducted at Source(TDS) Returns: In case of deductor fails to furnish the TDS return on or before the specified due date, he shall be liable to pay a penalty of INR 200 per day till the date of default. Please note that the total amount of such penalty cannot exceed the total amount of tax deducted at the source.
  • For non-filing of Tax Deducted at Source(TDS)Returns: in case deductor fails to file TDS return within the due date, then the assessing officer may charge a penalty ranging from INR 10K to 100k.

In the circumstance of a deduction loss at source, the payer would have to relieve his tax liability. To find the total quantum, search Form 26AS from your e-filing account. This is a very well method of tax collection by the Indian government. To learn more about the current assessment year, free to contact us.

Related Articles/pieces of information

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Complete Overview of Tax Residency Certificate (TRC)

What is the Tax Residency Certificate (TRC)?

www.carajput.com; Tax Residency Certificate

www.carajput.com; Tax Residency Certificate

With effect from 1st April 2013, A person residents of India who receive income from countries with whom India has a Double Taxation Avoidance Agreement can acquire a tax residence certificate from the Department of Income Tax. The same can be sent to the payer for the Double Taxation Avoidance Agreement benefit. Double Taxation Avoidance Agreement can acquire a tax residence certificate from the Income Tax Department. The same can be sent to the payer for the DTAA benefit.

The government has now issued notification No. NOTIFICATION No 39/2012, DATED 17-9-2012, published the following forms, which shall apply w.e.f 1st April 2013 and onwards:-

  • FORM No. 10FA – Filling an Application for a Certificate of Residency according to Sections 90 & 90A of the IT Act, 1961
  • FORM No. 10FB – Get the TRC for the purposes of Sections 90 and 90A of the IT Act 1961,

In order to receive a certificate of residency for the purposes of the arrangement referred to in Section 90 and Section 90A, the assessee, being a resident of India, shall make an application to the assessing officer in Form No. 10FA.

The AO shall, upon receipt of the application referred to in sub-rule (3) and fulfilled in that regard, grant the certificate of residency for the assessee in Form No. 10FB.

Kind of Abroad income to which the Double Taxation Avoidance Agreement applies: 

Here are the various kinds of foreign income that DTAA refers to:

  1. Income from Interest on FD
  2. capital gains on the selling of property
  3. Lease of assets
  4. Salary-Income from India is to be filed in form 1040 of the tax return. If you receive a tax credit, please fill out Form 1116. or  Income from Salary earned in foreign countries
  5. Agricultural revenue
  6. Share and mutual fund dividends
  7. Any income earned for freelance or consultancy work in India
  8. Interest in bank deposits, as well as other securities held in India and Income, earned as Interest on Savings bank Account
  9. Income from Capital income gained in foreign countries

Tax Residency Certificate for claiming relief under an agreement referred to in sections 90 and 90A is specified under rule 21AB of the Income Tax Rules.

Tax Residency Certificate needed to be acquired by non-residents: the new law specified that the TRC should be acquired by a non-resident from the Government of the country or designated territory of which he/she is resident and should include the following information:

  • Name of the taxpayer.
  • The status of the assessee (individual, corporation, firm, etc.)
  • Citizenship (in the case of individuals)
  • Country or designated territory of incorporation or registration;
  • The tax identification number of the assessor in the country or designated territory of residence or, in the event that such number does not exist, the specific number on the basis of which the person is known by the Government of the country or designated territory of residence.
  • Residential status for tax purposes as specified in the certificate referred to in sub-section (4) of section 90 or sub-section (4) of section 90A, is applicable;
  • The period of validity of the certificate
  • Address of the assessee for the period of validity of the certificate

Steps/Process to be followed to acquire Tax Resident Certificate (TRC) in India

In this situation, a completely manual procedure is implemented.

You can need to visit the Office of the Assessing Officer (AO) at least 2-3 times.[Rule 21AB]

Step 1: Find your appraisal officer online via the e-filling website by entering the PAN and the registered mobile number. [Left corner of the page under the Quick Link tab]

Step 2:

  • Create a document describing your travel in and out of India with a stamped passport.
  • In the circumstance of an electronic check-in or check-out via smart gates, and air ticket should be saved to clarify to the Evaluating Officer. [Happens primarily in the UAE]
  • Add days in a foreign land and make your stay in Indian soil transparent for the remaining number of days in the financial year.

    www.carajput.com; TRC

    www.carajput.com; TRC

Step 3:

  • Download Form 10FA and send the completed form to the appraisal officer (AO).
  • It is clear that the object of the tax resident certificate is revealed. Example: to subtract the sum of the tax withheld from the income earned abroad. [Form 10FA of paragraph (x) of 2]
  • Attach a copy of the passport and display all the arrival and departure stamps as shown in step 2.

 Step 4:

  • The Assessing Officer (AO) may ask you to visit his office to discuss your application.
  • The satisfaction of the Assessing Officer is required to receive the Tax Resident Certificate (TRC).
  • Upon being assured, TRC will be provided in Form 10FB.

Tax Residency Certificate required to be obtained by residents of India:

A resident taxpayer can send an application to the Assessing Officer (‘AO’) in Form 10FA to acquire a TRC in India. According to the provisions of sub-rule (2), for the purposes of  Section 90(5) and Section 90A(5), the following details shall be given by the assessee in Form No. 10FB:—

  • The status of the assessee (individual, corporation, firm, etc.)
  • Name of the assessee (taxpayer)
  • E-mail Address
  • Permanent Account Number / Tax Deduction Account Number (where applicable)
  • Citizenship (in the case of individuals)
  • The basis on which the status of resident in India is asserted
  • Purpose to receive the Tax Residency Certificate
  • The period of validity of the certificate
  • Address of the assessee for the period of validity of the certificate
  • Some more information

The application form, along with supporting documentation, must be sent to the Assessing Officer. The New Rule specifies that, upon receipt of the application and on the fulfillment of the particulars found therein as in sub-rule(3), the Assessing Officer shall grant the Tax Residency Certificate to the resident taxpayer in Form 10FB.

How to get the Form 10FB Indian Tax Resident Certificate-

Impacts/ advantages of the Tax Residency Certificate:

  • In order to prevent foreign tax deductions, all Indian residents are expected to apply a resident tax certificate to their foreign tax authorities.
  • Indian citizenship is not applicable to this certificate. This can also be acquired by a foreign national such that he fulfills the required requirements.
  • The specified format would make it possible for international residents to know in advance what is appropriate to receive tax credits. This would speed up the whole payment process.
  • The Tax Residency Certificate provision gives the tax authorities the right to test the tax beneficiary under these treaties.
  • In this post, we will discuss different aspects of the tax-resident certificate and the process by which it may be issued.
  • Save the tax!

How to get TAX Relief through TRC

TRC & TIN are required to claim exemption from higher withholding tax

  • Tax Residency Certificate and Tax Identification Number to demand exemption from higher TDS (for those who do not have PAN) u/s 206AA of the I Tax Act
  • CBDT brings additional Rule 37BC providing for information to be provided by a non-resident payee for relief from tax deduction at a higher percentage u/s 206AA of the I Tax Act
  • Latest Rules specifies that a non-resident deductee is not subject to the high tax on payments of ROYALTY, INTEREST, Charge FOR TECHNICAL SERVICES AND TRANSFER OF CAPITAL ASSETS,
  • In addition, it was stated that in the case of a deductee protected by current Rules 37BC, “PAN NOT AVAILABLE” should be indicated in Form 27Q when filing the TDS return.

What happens when non-residents do not have Tax Residency Certificate?

TRC from a non-resident or a foreign person for the purpose of getting advantages the DTAA/tax treaty

In cases where non-residents must provide Tax Residency Certificate or delays occur, the paying entity can withhold taxes at higher rates instead of applying the beneficial provisions of the Treaty. In that scenario, a non-resident will have to apply for refunds in India by filing his Income-tax Returns.

Even in cases of net financial dealings where the tax is paid by the Indian individual, they will have to look for consideration of those specifications.

Few Basic Question and Answer on TRC

S. No. Questions answers.
i if in addition to the tax residence certificate, the development of other fair proof is required for proper compliance with the residence test Yes
ii if the creation of other reasonable facts, even without a tax residence certificate, providing proof of residence of the payer would make the payer liable for the benefit of the Treaty? Yes
iii Does this indicate that the Tax Residency Certificate is just one of the proofs, but not definitive proof of the residence of the payer? Yes
iv if the tax residence certificate of the payer U/S 90(4) is a necessary condition for the payer to be qualified for the benefit of the Treaty? No
v Whether the generation of the Tax Residency Certificate by the payer alone is appropriate No

To reach the conclusion:

therefore before paying to non-residents or foreign organizations, it is compulsory to the corresponding non-residents for a tax residence certificate in order to benefit from the tax treaties. Besides that, instead of asking for the specified details in the Tax Residency Certificate itself, the government can now apply for the same data independently by other information and documents. This is a good development as investors from some countries have been faced with a problem because their governments have declined to change the Tax Residency Certificate format simply to fulfill the standards of the Indian Government. International investors are and will continue to be an important part of Indian markets. Steps must be taken to ensure that the flow of FDI continues to rise in India.

For complete solution and find out the complete answer of the following question you may contact us on 9555 5555 480

  • Whom to apply for Tax Residency Certificate and How to apply for Tax Residency Certificate?
  • Is there any form of application?
  • Is there any time limit for the issue of a Tax Residency Certificate?
  • This content is for annual members only.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

KEY TAKEAWAYS WITH FAQ ON FORM 26QB & FORM 16B AND SECTION 194-IA

Section 194-IA- 1 Percent TDS rate applicable on Sale of Real estate transactions with Form 26QB and Form 16B application

www.carajput.com;TDS on immovable property

www.carajput.com; TDS on immovable property

Basic key takeaways things Regarding Form 26QB: TDS relates to the sale of real estate/property according to the Finance Bill of 2013, where the cost of sale is equal to or greater than Rs 50,00,000. Section 194 IA of the Income Tax Act, 1961, provides that, as of 1 June 2013, the buyer can deduct tax at 1 % when making the property payment on the purchase of real estate immovable property. The seller will receive Form 16B for the deducted payment of TDS, while the buyer has to obtain Form 26QB as per the Income tax Act 1961.

Provisions requirements as per section in Section 194-IA are giving below

www.carajput.com;Section 194IA

www.carajput.com; Section 194IA

A new provision of income tax i.e Form 26QB is a TDS Return-cum-challan form for the payment of TDS deductions made U/s 194-IA of IT Act, 1961. The section of this Act deals primarily with transactions concerning the sale of immovable property, and the relevant TDS along with Form 26QB must be submitted within 30 days which are counted from the end of the month in which TDS was deducted. For Example, if the financial transaction took place on March 14th then Form 26QB must be submitted Compulsory by April 30th of that year.

Tax Law Provide and laid down several primary regulations for selling and purchasing real estate property. In each and every that transaction covered by Section 194-IA, if such financial transaction value is greater than Rs. 50 lakhs, the buyer, also known as the deductor, is allowed to deduct TDS. The deductor (purchaser)  under this section 194IA will be required to issue to the deductee (seller) Form 16B.

The person buying the property must deduct TDS from the overall selling valuation at the rate of 1 percent. A significant point to remember is that the purchaser, not the other party, has to subtract the TDS.

TDS shall not be deducted where the sale value is less than Rs. 50,00,000. In this event, if payment is in installments, TDS would have to be deducted from each payment.

The tax applies to the entire sum of the sale-even if the buyer or seller is more than one.

With effect from the FY 2013-14 budget, the 1 % TDS Rate deduction regulation on property sales was introduced to inspect underhanded property deals. With effect from June 2013, the regulation stipulates that on the sale of property exceeding Rs. 50 lakhs in India, a 1 percent tax on the total sale consideration must be deducted before making the payment to the vendor.

All the specifications for Form 26QB are provided under Section 194-IA.

www.carajput.com;TDS Form 26QB

www.carajput.com; TDS Form 26QB

These are:

  • Under Section 194-IA, at the time the transaction is done, the buyer must deduct TDS at a rate of 1 percent of the total selling price. TDS u / s 194-IA does not attract to Agricultural Land transactions. This taxation amendment does not apply to agricultural land sales transactions.
  • TDS on the sale of immovable assets shall not attract to transactions priced at less than Rs. 50 lakhs. For transactions above this cap, the entire cost of the transaction is deductible for TDS. For example, if the property costs Rs. 52 lakhs then you will pay TDS on Rs. 52 lakhs rather than Rs 2 lakhs (Rs. 52 lakhs – Rs. 50 lakhs).
  • The purchaser will deposit the 1 % TDS to the Income-tax department as per the Govt’s specification. The permanent account number must be mandatory provide by both buyer and seller while filling out Form 26QB to confirm that sellers do not avoid taxes on the capital gains they generate.
  • If the payment is made in installments then TDS is deducted on a proportionate basis on each individual installment.
  • The buyer doesn’t need to obtain a Tax Deduction Account Number (TAN) to deduct and deposit TDS. However, PAN is mandatory for both the seller and the buyer in case TDS deduction occurs using Form 26QB.
  • The purchaser must deposit TDS and apply the Form 26QB within 30 days of the end of the month TDS was deducted.
  • If the payment involves multiple buyers and sellers, the deductor will be required to apply multiple Form 26QB.
  • After completing the complete process of deducting and depositing TDS, the buyer is mandated to provide the seller a TDS certificate within fifteen days of the transaction in lieu of the tax deducted and deposited to the Government.
  • The buyer is required to obtain Form 16B and furnishes it to the seller.
  • TDS duly deposited and the properly filled Form 26QB, It must be deposited within 30 days from the end of the month in which TDS was deducted.
  • For the seller the PAN card is mandatory. If the PAN card is not available to the seller, otherwise 20 % TDS will apply.
  • After payment of the TDS, the buyer must give the TDS certificate to the vendor. This can be accessed in about two weeks from the date of deposit of TDS.
  • Obtaining a TAN number is not compulsory for the customer.

Points should be Buyer of Property identify:

Deduct tax @ 1 % from consideration for sale.

Collect the Seller’s Permanent Account Number (PAN), and inspect the same with the Original PAN Card.

Seller’s and buyer’s PAN should be mandatorily filled in the online form for furnishing sales transaction information.

Do not make any errors in quoting the PAN or other details in the online form, since there is no online error correction mechanism. You are required to contact the Income Tax Department for rectification.

Points should be Seller of Property identify:

www.carajput.com;Section 194IA

www.carajput.com; Section 194IA

Provide your PAN to the Department of Income Tax for the collection of TDS details to the Purchaser.

Check your Form 26AS Annual Tax Statement for the deduction of taxes deducted by the Buyer.

Information needed for Challan26QB:

The following details are needed when filling out the form 26QB) for Full Challan 26QB.

  • Sale & buyer’s PAN,
  • Copy of the Seller & Buyer PAN Card,
  • Information of seller & buyer, and amount of final consideration
  • Property descriptions in which transaction to complete.
  • The amount payable/credited & details of the tax deposit.

Frequently Asked Questions (FAQ) about On selling of property and application of  form 26QB and form16B:

www.carajput.com;Section 194IA; Form 26QB; Form 16B

www.carajput.com; Section 194IA; Form 26QB; Form 16B

Here we answered a few of the commonly asked questions about Form 26QB:

Q How to Download 26QB Form?

A. If you are wondering how to pay and access the form through Challan 26QB then here are the steps you need to follow:

www.carajput.com;CHALLAN

www.carajput.com; CHALLAN

  • Go to the TIN NSDL website and click on the link “e-payment: Pay Tax Online” located under the homepage’s “Services” tab.
  • On the next tab, click on Form 26QB (Online Form for Property Furnishing TDS) under the TDS on Property Sale menu:
  • Fill out the appropriate details

Download process: Form 26QB

www.carajput.com;TDS Form 26QB

www.carajput.com; TDS Form 26QB

  • When the payment has been made, the purchaser will have to wait a few days for the information to be reflected on the TRACES website. Registered users will be able to receive either Form 16B or Form 26QB, accepted in Form 26AS.
  • If the payment has been recorded in Form 26AS, the payment made on the sale of the property against TDS is reflected in Part F of Form 26AS under ‘Details of Tax Deducted at Source on      Sale of Immovable Property under section 194(IA). This will display information such as the   TDS certificate number, name of the deductee, PAN of the deductee, total transaction amount, booking status, date of transaction, TDS deposited, acknowledgment number, deposit date, and booking date.
  • Now click on the ‘Downloads’ tab to go to the TRACES website. Click on ‘requested files’ in the drop-down line. If an application is not submitted the user will be asked to submit a download request. Enter the nine-digit acknowledgment number reflected on Form 26AS Part F. After doing so, the user may display the application status. The application will be processed in a few hours, and the user can access Form 16B by entering the number of the submission. To receive Form 26QB a similar procedure must be followed.

Q What type of form 26QB and form16B are?

A. Form 26QB is a return cum challan which is used for payment of TDS to the government of India. Form 16B is a TDS certificate issued to deduct TDS by the buyer to the seller.

Q What is the depositing procedure of TDS?

A. following List of the process for filing TDS is as follows

  • Calculate 1 Percent of TDS on the overall consideration for sales. The seller will be paying Rs.59,40,000 after TDS for a property being sold for Rs. 60 lakhs.
  • Make the payment online on Form 26QB. It creates a challan. Notice that this has to be completed within 7 days from the end of the month TDS is deducted in.
  • The payment is reflected within 7 days on Form 26AS of the seller under Part F heading.
  • The buyer will then be allowed to provide the seller with a TDS certificate called Form 16B. This is available for free on the TRACES website.
  • To do this, register with your PAN and challan number on the TRACES web site.

Payment By Challan 26QB (Online & Offline) : To make your payment through Challan 26QB, here’s what you need to do:

 

www.carajput.com;CHALLAN;Form-26QB

www.carajput.com; CHALLAN;Form-26QB

  • Stage 1-Go to.tin.egov-nsdl.com / e-tax new / tds non tds.jsp services online.
  • Stage 2Click Form 26QB.
  • Stage 3- If you are a corporate taxpayer pick 0020. Others could just press 0021.

To fill Form 26QB, select one of the options given:

  • (0020) Corporation Tax (Companies)
  • (0021) Income tax (other than corporations)
  • Assessment Year and financial year
  • TDS deductor address and
  • Information on Property
  • After that, pick the Payment Mode
  • Payment of e-tax (via net banking facility) immediately
  • Payment of e-tax by subsequent date (payment by bank branch at a later date)

                Step 4 – Fill up the empty blanks and click on Proceed.

                Stage 5 Filled up empty blanks and press Continue.

If you prefer the net banking option then you will use your Internet banking credentials to log in to your account and make the payment. You can access Form 26QB when payment is completed.

However, if you choose the “Pat Later” option then a unique Acknowledgement Number will produce with Form 26QB for you. To make the payment, you need to print it out and take the form to your bank branch. You need to make the TDS payment using Form 26QB within 10 days of producing this form.

The taxpayer can log in to the TRACES website after completing the TDS payment and verifying that the payment is reflected in Form 26AS, and download Form 26AS from the Downloads menu after providing the relevant information.

A confirmation screen appears. The two options are given to user-” Print Form 26QB “and” Send to Bank. It also shows a specific acknowledgment number. Keep a record for future use of that acknowledgment amount. To take a copy of the document click “Print Form 26QB.”

Mode of Payment

You may make the Taxation payment instantly, i.e. via net-bank or by visiting one of the bank branches on a subsequent date. If the payment is made online, a print of the Challan 280 marked on 800 may be taken. If the payment is made at a branch, an e-receipt for Form 26QB will be generated along with a unique acknowledgment number. This has to be submitted with the cash or cheque to each of the approved lenders. The institution must generate the Challan until the tax sum is paid to the bank.

For the payment here is the list of some Authorised bank

  • HDFC Bank
  • Central Bank of India
  • Indian Overseas Bank
  • Jammu & Kashmir Bank
  • Axis Bank
  • Bank of Baroda
  • Corporation Bank
  • Andhra Bank
  • ICICI Bank
  • Dena Bank
  • IDBI Bank
  • Indian Bank
  • Bank of India
  • Bank of Maharashtra
  • Canara Bank
  • Syndicate Bank
  • Oriental Bank of Commerce
  • United Bank of India
  • Vijaya Bank
  • Punjab and Sind Bank
  • Punjab National Bank
  • State Bank of India
  • Allahabad Bank
  • UCO Bank
  • Union Bank of India

Q How does this appear on the seller’s sales tax return?

A. Capital gains from property sales along with the TDS details found in Form 26AS would have to be recorded in the seller’s income tax return.

Q What is the Process for issuing form 16?

Ans Process for issuing form 16 are as under : 

  1. After 5 days, proceed to the TRACES portal (www.tdscpc.gov.in) to download Form 16B.
  2. Steps to get Form 16B downloaded:
  • Register & sign in as a taxpayer using your PAN on the TRACES portal (www.tdscpc.gov.in)
  • Under the “Downloads” tab, pick “Form 16B (For Buyer).”
  • Enter the property transaction information for which you must submit Form 16B. Enter the Seller’s Assessment Year, Acknowledgement Number, PAN, and press “Continue”
  • A screen appears for confirmation. To continue, click on “Submit Application.”
  • A message of completion should appear on the submission of a download request. To check for the download request please note the request number.
  • To download the requested files, click on “Requested Downloads.”
  • Request check with the request number. Select the row of requests and click on the “download HTTP” button.

Q How can I deduct TDS if I don’t have TAN?

A. To deduct TDS, the buyer need not have a Tax Collection and Deduction Account Number (TAN). Additionally, both the buyer and the seller need to provide their PAN for the transaction like TDS deduction.

Q. I had forgotten to subtract TDS when I bought a house. Now, what will I do?

A. Non-deduction of TDS on the remaining TDS balance faces a penalty value of 1 percent. To set the account straight you need to act and pay the penalty as soon as possible. Be sure to forward the TDS to the government and file the return of TDS within the specified period, as well as avoid certain penalties.

Q Is deduct TDS is required for purchasing agricultural land?

A. No. As per Section 194-IA, If you are purchasing agricultural land, you do not need to deduct TDS for the transaction

Q. Is the Deduction of TDS is Compulsory if I am Purchasing Agricultural Land?

A. No, As per section 194-IA there is no need to deduct TDS if you are Purchasing Agricultural Land.  Agricultural Land is an area  within the jurisdiction of Municipality or Cantonment Board which has a population of not less than 10,000 or It is Area in any area within below given distance measured are as under:

The population of the Municipality Distance from Municipal limit or Cantonment Board
More than 10,000 but does not exceed 1,00,000 Within 2 km
More than 1,00,000 but does not exceed 10,00,000 Within 6 km
Exceeding 10,00,000 Within 8 km

Q. How to make payment of TDS by using Form 26QB?

A. By using Form 26 QB, you can avail of any of the options for remit TDS to the government Choose the E-tax payment option on the TIN NSDL webpage and payment online with net banking. Generate Form 26QB with a unique acknowledgment number, and use this form to visit your bank to pay. Form 26QB with acknowledgment number is 10 days valid.

Q. What penalties do Form 26QB enforce for non-compliance with the above TDS provision?

A. Penalties relating to Form 26QB of Section 194-IA

It is important to remember here that failure to deduct TDS, issue Form 16B or failure to file Form 26QB attracts attention and penalty. The penalties which apply are as follows:

Condition Penalty
Non-deduction of TDS The interest of 1% on the amount not deducted for TDS
Non-remittance of TDS to the government The penalty of 1.5 percent of the sum deducted each month
Delay in filing of TDS returns The penalty of 200 Rs per day for the default day

Related Articles/pieces of information

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

New Turnover Threshold for the Purposes of TDS Applicability

New Turnover Threshold for the Purposes of Tax deducted at Source (TDS) Applicability as per the Finance Act 2020.

www.carajput.com;Income TAX and TDS Update

www.carajput.com; Income TAX and TDS Update

 

TDS was applicable to individuals and to HUF if their accounts were subject to audit in Section 44AB of the preceding year. The Finance Act 2020 specifies that All individuals & HUF will be liable to deduct TDS if the revenue exceeds Rs. 1 Crore in the case of corporation and Rs. 50 Lakhs in the case of the profession in the previous year. Such revisions shall take effect from 1 April 2020.

Below is the TDS average for the year 2020-21. In the following table valid from 14th May 2020

o   Individuals include the individual and HUF

o   Company and others include Company, Company, LLP, Co-op Society, Local Authority.

New List of Announcement made under Direct Tax Acts made by the Minister of Finance Smt. N. Sitharaman

The Minister of Finance, Smt. N. Sitharaman conducted a media briefing on 13 May 2020 to make arrangements for the Rs 20 Lakh Crore Economy Plan launched by the P.M Sh. N. Modi.

The FM issued a number of packages for the Micro, Small, and Medium Enterprises Sector to provide a little relief under the COVID-19 disease outbreak. A variety of steps have been declared by the FM, including collateral-free automatic lending, updated description of MSME, etc.

1.      List of notified new rate and announcement 

The Minister of Finance has outlined a series of relief measures under the Income Tax Act, which are set out below:

(a) The TDS/TCS rates for defined payments/receipts shall be decreased by 25%. This reduction in the rate shall be applicable for tax deducted or assessed between 14-05-2020 and 31-03-2021. This provision shall not be made applicable to a salaried and non-resident taxpayer. The TDS and TCS preliminary rates are shown in the chart following.

(b) All unpaid refunds to nonprofit organizations and non-corporate companies and occupations shall be issued shortly.

(c) The due date of all revenue-tax returns for the financial year 2019-20 will be increased from 31 July 2020 and 31 October 2020 to 30 November 2020.

(d) The deadline date for the tax audit referred to in Section 44AB shall be increased from 30 September 2020 to 31 October 2020.

(e) The final date of selecting for the Vivad se Vishwas scheme without paying an extra 10%  of the tax at issue shall be expanded until 31 December 2020.

(f) The deadline of 30-09-2020 for completion of the evaluations shall be extended to 31- 12-2020. If the evaluation is blocked on 31-03-2021, it shall be extended to 30-09-2021.

By lowering the rate of TDS/TCS, the Government. It allows taxpayers to have much more money in their hands. In this tough moment, this declaration would help self-employed employees, professionals and senior citizens receiving interest income or rental income. It does not offer any comfort to employees. But it should be remembered that the relaxation of the TDS/TCS rate would have no effect on the final tax liability of the taxpayer. As a result, any shortfall in tax liability due to a decreased rate of TDS/TCS should be payable by advance tax installment payments. Any deficit in the deposit of advance tax would draw interest under Sections 234B and 234C. The first payment of the advance tax is due on 15 June 2020. A taxpayer can recalculate his advance tax obligation to be deposited next month in order to postpone any charge of interest.

1.       Rates of TDS FY 2020-21

 

Section

 

Nature of Income

Rate of TDS applicable for the period Threshold

Limit for deduction tax

01-04-2020 to 13-05-2020 14-05-2020 to 31-03-2021
193 Interest on Securities 10% 7.50%
194 Dividend 10% 7.50% Rs. 5,000 in

case of Individual

194A Interest other than interest on Securities 10% 7.50% Rs. 5,000 to

Rs. 50,000

194C Payment to Contractors –   1%: If deductee is an individual or HUF

–   2%: In any other case

–   0.75%: If deductee is an individual or HUF

–   1.50%: In any other case

–   Single payment : Rs. 30,000

–   Aggregate

payment: Rs. 100,000

194D Insurance Commission –   10%: If deductee is domestic Company

–   5%: In any other case

–   7.50%: If deductee is domestic Company

–   3.75%: In any other

case

15,000
194G Commission and other payments on sale of lottery

tickets

5% 3.75% 15,000
194H Commission and

Brokerage

5% 3.75% 15,000
194-I Rent –  10%: If rent pertains to hiring of immovable property

–  2%: If rent pertains to hiring of plant and machinery

–  7.50%: If rent pertains to hiring of immovable property

–  1.50%: If rent pertains to hiring of plant and

machinery

2,40,000
194-IB Payment of Rent by Certain Individuals or

HUF

 

5%

 

3.75%

50,000

 

194J Royalty and Fees for Professional or Technical Services –  2%: If royalty is payable towards sale, distribution, or exhibition of cinematographic films

–  2%: If the recipient is engaged in business of operation of call Centre

–  2%: If sum is payable towards fees for technical services (other than professional services)

–  10%: In all other cases

–  1.50%: If royalty is payable towards sale, distribution, or exhibition of cinematographic films

–  1.50%: If the recipient is engaged in business of operation of call Centre

–  1.50%: If sum is payable towards fees for technical services (other than professional services)

–  7.50%: In all other

cases

–  Director’s fees: Nil

–  Others: Rs. 30,000

194M Payment to contractor, commission agent, broker or professional by certain Individuals

or HUF

5% 3.75% 50 lakhs
194N Cash withdrawal –  2%: In general if cash withdrawn exceeds Rs. 1 crore

–  2%: If the assessee has not furnished return for the last 3 assessment years and cash withdrawn exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore

–  5%: If the assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 1 crore

–  1.50%: In general if cash withdrawn exceeds Rs. 1 crore

–  1.50%: If the assessee has not furnished return for the last 3 assessment years and cash withdrawn exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore

–  3.75%: If the assessee has not furnished return for last 3 assessment years and cash is withdrawn exceeds Rs. 1

crore

–  If a person defaults in the filing of return: 20 lakhs

–  If no default is made in the filing of return: Rs 1 crore

  1. Tentative rates of TCS
Section GST liable to TCS Rate of TDS applicable for the period
14-05-2020 to 31-03-

2021

14-05-2020 – 31-03-

2021

Section 206C(1) Alcoholic liquor for human

consumption

1% 0.75%
Section 206C(1) –           Timber obtained under Forest lease

–           Timber obtained by any mode other than under a forest lease

–           Any other forest produce not being timber or tendu

leaves

2.50% 1.875%
Section 206C(1) Tendu leaves 5% 3.75%
Section 206C(1) Minerals, being coal or ignite or iron ore 1% 0.75%
Section 206C(1) Scrap 1% 0.75%
Section 206C(1C) Parking Lot 2% 1.50%
Section 206C(1C) Toll Plaza 2% 1.50%
Section 206C(1C) Mining & quarrying 2% 1.50%
Section 206C(1F) Motor Car 1% 0.75%
Section 206C(1G) Overseas tour travel package 5% 3.75%
Section 206C(1G) Remittance of Forex under LRS of Rs. 7 lakh or more in a financial year 0.5%: Where remittance is a repayment of loan obtained for the purpose of pursuing any education

5%: In any other case

0.375%: Where remittance is a repayment of loan obtained for the purpose of pursuing any education

3.75%: In any other case

Section 206C(1H) Sale of goods in excess of Rs.

50 lakh

0.10% 0.075%

Interest in delayed payment and late deduction of TDS:

As per section 201(1A), Interest at the rate of 1 % per month or part of the month on the balance of TDS deductible from the date of tax before the date of the tax finally deducted shall be paid for the late deduction.

In addition, interest for late payment at a rate of 1.5 percent per month or half of the month on the number of TDS withheld from the date of tax to the day on which the tax is collected shall be levied.

Profit in late payment of TDS: amendments made pursuant to the Taxes and Other Laws (Relaxation of Other Provisions) Order 2020 of 24 March 2020:

For late fees payable on self-assessment tax; advanced tax, income tax, TDS, TCS, equalization cessation, STT, CTT made between 20 March 2020 to 30 June 2020, the interest rate will be decreased by 9% instead of 12%/18% per year (i.e. 0.75% per month instead of 1/1.5% per month).  No late fee/penalty shall be paid for any delay in respect of that time.

Default fees for the TDS / TCS return file:

Fees are payable at Rs. 200 a day for each day on which the loss continues. The amount of the fees can not exceed the value of the TDS.

Related Articles/pieces of information

You can give your comments and suggestions under the comment box.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

TDS on Payments to Resident Contractors & Professionals

Basic Understanding on TDS on Payments to Resident Contractors & Professionals: Section 194M, Form 26QD, and FORM 16D

www.carajput.com;TDS: form 26QD; Form 16D

www.carajput.com; TDS: form 26QD; Form 16D

TDS on Payments to Resident Contractors

A new section 194 M has been introduced by the Finance Act, 2019. Pursuant to this clause, if the individual makes payments to contractors and practitioners above Rs. 50 Lakhs, the individual is allowed to subtract TDS at a rate of 5% from the amount payable to the resident deductee/payee. This provision applies to individuals and to HUFs who are not liable for tax audits. As announced by the Finance Minister on 14 May 2020 for FY 2020-21, the person is liable for the deduction of TDS at a rate of 3.75 percent.

TDS on payments to residential contractors and Professional Consultants

Under the new law of the TDS, i.e. Section 194J (TDS on Technical and Medical Services) and Section 194C (TDS on Contractors) Persons or HUFs not subject to audit were not entitled to deduct TDS irrespective of the volume of payment. This was the main reason for the introduction of section 194 M to cover non-audited individuals under the TDS.

Reason for the implementation of Section 194M

  • Section 194 M of the Finance Bill, 2019, allows for a tax-deductible at source on any money paid by an employee or HUF to a local contractor where the services are rendered for personal use. Therefore, this section refers both to personal and company payments.
  • Prior to the introduction of this section, there was no liability on the part of an individual or HUF to deduct tax at source in the situation referred to above.
  • Nor did the people or HUFs carrying on business or the practice (not subject to any audit) subtract any tax at source, even though the charge was made for commercial or technical purposes.
  • As a result of this loophole, a large amount of payment for contracted activities and consulting fees avoided the TDS levy, providing room for tax avoidance.

TDS rate under Section 194 M

  • The 5 percent TDS will be deducted under 194 M if the total amount paid to a resident exceeds Rs 50.00000 in a particular financial year.
  • In the case that the deductee’s PAN is not eligible, the TDS will be deducted at 20%.

What then is the time frame for depositing the TDS?

  • When any payment is made by or on behalf of the Government – the amount of the TDS will have to be paid to the Department on the day of payment.
  • Where any payment is made by any other person other than the government:

The TDS would have to be paid for:

  • If payment is rendered in March – on or before April 30 of the next financial year. For example, if the amount was paid in March 2020, the TDS will be deposited with the Department by 30 April 2020.
  • For every other month – within seven days from the end of the month in which the reduction is made. For example, if the payment had been charged in the month of September 2019, then the TDS would

The accompanying are the requirements for the deduction of TDS for payment to resident contractors and professionals above Rs. 50,00,000:

  1. It is applicable to all individuals or HUFs who make payments to resident contractors and professionals above Rs. 50,00,000.
  2. As per section 194 M, the individual or HUF that is required to have his books audited pursuant to section 44AD is not required to deduct tax under section 194M, they are covered by section 194J (TDS on Technical and Professional Services) and section 194C (TDS on Contractors)
  3. The payee must subtract TDS at the rate of 5 percent of the amount charged, in the event that no PAN is covered by the recipient, otherwise TDS is deductible at the rate of 20 percent up to the overall rent cap payable for the month of March or the last month of the lease, as the case may be. As announced by the Finance Minister on 14 May 2020 for FY 2020-21, the person is liable for the deduction of TDS at a rate of 3.75 percent.
  4. TDS shall be deducted only at the earliest of the following dates:
  • At the time of the payment of the sum, or
  • At the time of payment by cash or cheque or draft
  1. No TAN is required for that person to deduct and deposit the TDS to the Government
  2. The transaction is to be made by the individual using form 26QD, which is a call cum statement:
  • If the contractor’s work is not finished at the end of the financial year, apply Form 26QD within 30 days from the end of the fiscal year.
  • If the contractor work is between the financial year, file Form 26QD within 30 days from the end of the month when the contract/service is completed or terminated.
  1. If a person pays Rs. 50.00000 to more than one resident contractor or professional, then form 26QD shall be made twice a year for each contractor or professional, in other words, the tenant must submit form 26QB for each contractor or professional.
  2. In the case that the form needs to be submitted more than once, the invoice must also be made more than once, as a separate payment is to be made by each consultant or practitioner by their respective fees.
  3. If payment is made to a non-resident, the TDS is deductible under section 195.
  4. The entity deducting the TDS must apply the TDS certificate to the resident contractor or practitioners in Form 16B.

CBDT Has notified New TDS Return Filing Forms 26QD & 16D : 

  • Tax enforcement may be one of the most important factors for any form of business organization. It is also recommended that persons and corporations shall comply fully with the requirements of the Income Tax Act 1961. It is necessary to observe due dates for the payment of income tax deduction tax at source (TDS) in addition to the ITR filing as well as the TDS return filing. In this regard, 2 new TDS Return Filing e-forms have been introduced by the Income Tax Department, viz. Type 26QD and Type 16D.
  • Two New TDS Return Filing e-forms have been introduced by the Central Board of Direct Taxes, viz. Type 26QD and Type 16D.

What’s FORM 26QD?

  • Form 26QD is the TDS return reporting form for payments to resident contractors and practitioners 194M.
  • According to the CBDT notification, any tax deducted at source 194 M must be paid to the Central Government within 30 days from the end of the month in which the deduction was made. This deduction must be stated in the form 26QD of the Challan-cum-statement.

What is FORM 16D?

  • Form 16D is the TDS credential for reimbursement of the TDS u / s 194M.
  • According to the CBDT notification, from now on, all individuals who have to deduct tax u / s 194 M shall send a TDS certificate to the payer in Form 16D within 15 days from the due date for the TDS report filed in Form 26QD.

Details Required for Form 26QD: The CBDT had stated that individuals / HUFs making contractual or professional payments will be allowed to deduct TDS under section 194 M from the financial year 2019-20 (September 1st, 2019). TDS is deducted at 5% if the payment exceeds Rs. 50,000,000. And the TDS return for the same needs to be filed in Form 26QD. The payee will receive Form 16D as proof of the TDS deduction

  • Deductor / Payer PAN
  • Deductee / Paye PAN
  • Form of payment (work under contract/commission/brokerage or technical service charges)
  • Date of agreement/contract
  • Amount of payment
  • Number of certificates provided by the Assessment Officer pursuant to section 197 for non-deduction or lower deduction
  • Credit date
  • The TDS Rate
  • Payment details for TDS

Steps-How to fill out the form 26QD

  • Go to www.incometaxindiafiling.gov.in\
  • Click on the ‘E-Pay Tax’ button.
  • Click on ‘Continue to the NSDL website’
  • The next page will appear.
  • On Tab TDS on Contractor Payment Form 26QD.
  • Click the Proceed button.
  • Fill out the details.
  • Submit it.

Points to be recalled by the payer/deductor:

  • All individuals or HUFs (except those subject to audit pursuant to paragraph a and b of section 44AB) making payments to residents greater than 50.000.000 are liable to deduct TDS pursuant to section 194M.
  • Tax @ 5 percent to be deducted from the payment made to the payer.
  • Collect the Payee / Deductee Permanent Account Number (PAN) and verify the same with the original PAN card.
  • The Payee / Deductee PAN as well as the Payer / Deductor PAN should be made mandatory in the online form used to provide payment information.
  • Do not commit any mistake by citing the PAN or any other information in the online form. You will notify the Income Tax Department for the purpose of error correction.
  • Download and supply the TDS certificate in Form 16D from TRACES and give it to the Payee / Deductee within 15 days from the due date of receipt of the voucher in Form 26QD.

Points to be understood by the payer/deductee

  • Provide the Payer/Deductor with PAN to provide the Income Tax Department with information on TDS.
  • Verify the amount of taxes paid by the payer/deductor in the Form 26AS Annual Tax Declaration.
  • Insist on obtaining Form 16D from the Payer / Deductor that has been downloaded from the TRACES website only.
  • The Payee / Deductee may apply to the Assessing Officer under Section 197 to obtain a Nil or Lower TDS certificate in respect of the amount paid or payable to TDS under Section 194 M if his estimated tax liability is justified to the satisfaction of the Assessing Officer in issuing such a certificate.

TDS Rate and Limit applicable 

Related Articles/Information

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

New Revise TDS / TCS return filing due date & Payment due date for 2020

New Revise TDS / TCS return filing due date & Payment due date for 2020 as per the Taxation and Other Regulations (Relaxation of Some Provisions) Order, 2020.

www.carajput.com;CBDT; TDS Certificate

www.carajput.com; CBDT; TDS Certificate

The deadlines for specific GST and Income Tax legislation have been expanded by the Minister of Finance. Pandemic COVID-19 has forced a lockout in India. There are many challenges for businesses and professionals during this period, including different compliances under tax legislation.

Various reliefs are provided with respect to the submission of the TDS / TCS declaration and the issue of the certificate in the “Taxation and Other Laws (Relaxation of Other Provisions) Order 2020” for the quarter ended 31.03.2020.

LATEST CURRENT UPDATE: the deadline date of the Tax return under I T Act 1961 filing for FY 2019-20 (AY 2020-21) is increased to 10th Jan 2021. For Income tax audit & Transfer pricing Audit, the deadline is 15th Feb 2021.

ITR filing deadline for the FY 2019-20

Taxpayer Type Deadline for Income tyax Tax Filing – FY 2019-20
Individual 10th Jan 2021
BOI 10th Jan 2021
HUF 10th Jan 2021
AOP 10th Jan 2021
Income tax Audit 15th Feb 2021
Businesses (Requiring TP Report) 15th Feb 2021

How to file TDS return Online

Complete Coverage of Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020

calendar year 2020 has begun with many challenges, with the revised due dates for various TDS related return filings and tax payments following.

Complete Chart of TDS

1.       Rates of TDS FY 2020-21

 

Section

 

Nature of Income

Rate of TDS applicable for the period Threshold

Limit for deduction tax

01-04-2020 to 13-05-2020 14-05-2020 to 31-03-

2021

193 Interest on Securities 10% 7.50%
194 Dividend 10% 7.50% Rs. 5,000 in

case of Individual

194A Interest other than interest on Securities 10% 7.50% Rs. 5,000 to

Rs. 50,000

194C Payment to Contractors –   1%: If deductee is an individual or HUF

–   2%: In any other case

–   0.75%: If deductee is an individual or HUF

–   1.50%: In any other case

–   Single payment : Rs. 30,000

–   Aggregate

payment: Rs. 100,000

194D Insurance Commission –   10%: If deductee is a domestic Company

–   5%: In any other case

–   7.50%: If deductee is a domestic Company

–   3.75%: In any other

case

15,000
194G Commission and other payments on sale of lottery

tickets

5% 3.75% 15,000
194H Commission and

Brokerage

5% 3.75% 15,000
194-I Rent –  10%: If rent pertains to the hiring of immovable property

–  2%: If rent pertains to the hiring of plant and machinery

–  7.50%: If rent pertains to the hiring of immovable property

–  1.50%: If rent pertains to the hiring of plant and

machinery

2,40,000
194-IB Payment of Rent by Certain Individuals or

HUF

 

5%

 

3.75%

50,000

 

194J Royalty and Fees for Professional or Technical Services –  2%: If royalty is payable towards sale, distribution or exhibition of cinematographic films

–  2%: If the recipient is engaged in the business of operation of call Centre

–  2%: If sum is payable towards fees for technical services (other than professional services)

–  10%: In all other cases

–  1.50%: If royalty is payable towards sale, distribution or exhibition of cinematographic films

–  1.50%: If the recipient is engaged in the business of operation of call Centre

–  1.50%: If sum is payable towards fees for technical services (other than professional services)

–  7.50%: In all other

cases

–  Director’s fees: Nil

–  Others: Rs. 30,000

194M Payment to contractor, commission agent, broker or professional by certain Individuals

or HUF

5% 3.75% 50 lakhs
194N Cash withdrawal –  2%: In general if cash withdrawn exceeds Rs. 1 crore

–  2%: If the assessee has not furnished return for the last 3 assessment years and cash withdrawn exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore

–  5%: If the assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 1 crore

–  1.50%: In general if cash withdrawn exceeds Rs. 1 crore

–  1.50%: If the assessee has not furnished return for the last 3 assessment years and cash withdrawn exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore

–  3.75%: If the assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 1

crore

–  If a person defaults in the filing of return: 20 lakhs

–  If no default is made in the filing of return: Rs 1 crore

  1. Tentative rates of TCS
Section GST liable to TCS Rate of TDS applicable for the period
14-05-2020 to 31-03-

2021

14-05-2020 – 31-03-

2021

Section 206C(1) Alcoholic liquor for human

consumption

1% 0.75%
Section 206C(1) –           Timber obtained under Forest lease

–           Timber obtained by any mode other than under a forest lease

–           Any other forest produce not being timber or tendu

leaves

2.50% 1.875%
Section 206C(1) Tendu leaves 5% 3.75%
Section 206C(1) Minerals, being coal or ignite or iron ore 1% 0.75%
Section 206C(1) Scrap 1% 0.75%
Section 206C(1C) Parking Lot 2% 1.50%
Section 206C(1C) Toll Plaza 2% 1.50%
Section 206C(1C) Mining & quarrying 2% 1.50%
Section 206C(1F) Motor Car 1% 0.75%
Section 206C(1G) Overseas tour travel package 5% 3.75%
Section 206C(1G) Remittance of Forex under LRS of Rs. 7 lakh or more in a financial year §                  0.5%: Where remittance is a repayment of loan obtained for the purpose of pursuing any education

§                  5%: In any other case

     0.375%: Where remittance is a repayment of loan obtained for the purpose of pursuing any education

     3.75%: In any other case

Section 206C(1H) Sale of goods in excess of Rs.

50 lakh

0.10% 0.075%

Attributable Due Date for TDS E-filing Returns for Fy 2019-20.

Quarter Quarter Period Last Date of Filing
1st Quarter 1st April to 30th June 31st July 2019
2nd Quarter 1st July to 30th September 31st Oct 2019
3rd Quarter 1st October to 31st December 31st Jan 2020
4rd Quarter 1st January to 31st March 30th June 2020 Read Rescript 2020

Changes in the interest rate for the delay in the deposit of TDS / TCS in time as provided for in the Taxes and Other Laws (Relaxation of Other Provisions) Legislation, 2020.

TDS / TCS Changes to Covid19 by Ministry of Finance

  • “Government to infuse Rs 50,000 crores of liquidity by reducing the rate of TDS, the rate of non-salaried specified payments made to residents, and the rate of Source Tax Collection for specified receipts by 25% of the current rate”
  • “Among other steps, the due date of all income tax returns for the fiscal year 2019-20 will be extended from 31 July 2020 and 31 October 2020 to 30 November 2020 and the tax audit from 30 September 2020 to 31 October 2020”
  • “The period of the Vivad se Vishwas scheme for making payment without an additional amount will be extended to 31 December 2020”
  • Advanced tax, self-assessment tax, standard tax, TDS, TCS, equalization fee, STT, CTT late payments made between 20 March 2020 and 30 June 2020, the lower interest rate at 9% instead of 12%/18 percent per year (i.e. 0.75 percent per month instead of 1/1.5 percent a month) will apply. There is no late fee/penalty available.
  • The government extended the scope of the lower or nil TCS, TDS credential until 30 June 2020 due to a coronavirus pandemic.

Arrival Due date for TDS & TCS Payment Deposit for Government & Non-Government Companies

  • The due date for the submission of the TCS deposit is the 7th of the next month.

TDS Deposit Due Date as follows:

  • For non-governmental entities-7th of the next month (with the exception of March where the due date is scheduled for April 30th)
  • Government departments
  • If you pay via Challan-7th of next month
  • If paid via book-entry, the same day on which the TDS is deducted.

TDS Deposit Due Date as follows

As per section 201(1A) Interest at the rate of 1 % per month or part of the month on the amount of TDS deductible from the date of tax until the date of tax actually deducted shall be charged for the late deduction.

Also, interest for late payment at a rate of 1.5 percent per month or part of the month on the amount of the payment.

Interest in late payment of TDS: amendments made pursuant to Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 dated 24th March 2020:

For late payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20 March 2020 and 30 June 2020, the interest rate will be reduced by 9 percent instead of 12 per cent/18 percent per year (i.e. 0.75 percent per month instead of 1/1.5 percent per month). No late fee/penalty shall be paid for any delay in respect of that time.

Interest in late payment of TCS or failure to collect TCS:

In the event that the collector responsible for collecting the tax at source does not raise it or refuses to pay it to the Government, he shall be liable to pay basic interest at a rate of 1% a month or part thereof on the balance of that tax from the date on which the tax was collected to the date on which the tax was actually charged and that interest shall be paid until furnish.

Applicable Interest on late payment of Tax deducted at souses before the COVID -19

SECTION NATURE OF DEFAULT INTEREST SUBJECT TO TDS/TCS AMOUNT PERIOD FOR WHICH INTEREST IS TO BE PAID
201A Non deduction of TDS, either in whole or in part INTEREST : 1% per month From the date on which tax deductable to the date on which tax is actually deducted
After deduction of tax, non-payment of tax either in whole or in part INTEREST : 1.5% per month From the date of deduction to the date of payment

Note: above said interest required to be paid before filing of TDS return.

Punishment

You will have to pay a fine equal to the amount deducted/collected under the provisions of the Income Tax Act.

Prosecution (Sec 276B)

As per the prosecution (Sec 276B), if a person refuses to pay the payment to the Central Government, the TDS deducted by him under the provisions of Chapter XVII-B shall be entitled to obtain a strict penalty of at least three months, which may be expanded to seven years. The fine depends on the conditions or inquiry conducted by the appointed tax authority/assessment officer.

Penalty (Section 234E)

The deductee of the TDS shall be liable to pay a fine of INR 200/-per day before the full sum of the TDS is paid. However, the penalty shall not exceed the actual amount of the TDS.

Late Filing Fees :

For the delayed fee of TDS after deduction under Section 201(1A), you have to pay interest at a rate of 1.5 percent per month from the date of the deduction to the actual date of the deposit. It should also be remembered that interest is measured on a monthly basis rather than on a number of days. Half of a month will also be regarded as a whole month.

What is important to remember here is that

The estimation of interest on the balance of the TDS owed starts on the day from which the TDS was withheld rather than the day from which it was due.

PENALTIES (Section 271H)

Pursuant to this rule, the Assessing Officer may direct a person who has not filed a TDS payment on time with a minimum of INR 10,000, which may even be extended to INR 1,000,000.

If the following conditions are met, no penalty will be levied (under section 271H) for late payment of TDS / TCS returns:

  • The tax deducted at the source must be paid to the credit of the government.
  • No penalty will be levied if interest and late filing fees are paid to the Government’s credit.
  • Before the one-year period expires, the TDS / TCS return has been filed from the due date.

TDS for the purchase of immovable property

For the purchase of immovable property on which TDS applies, the return, together with the payment of TDS, must be made before the 30th of the following month. For example, TDS for property purchased in May must be deposited by 30 June.

In Dec 2020

Recent Income Tax and GST Due Dates of Filling date Extended
1. Income Tax Returns Due Dates for:
(a) Companies
(b) If any person which is other than Co. whose accounts are needed to be audited in income tax or any other law
(c) a partner of a firm whose accounts are required to be audited under the Income Tax Act or any other law
(d) any person who is required to furnish Transfer Pricing report u/s 92E under Income Tax Act.
has been extended from 31st January 2021 to 15th February 2021.

2. Income Tax Returns Due Dates for Any other Persons not covered in point 1 above has been extended from 31st December 2020 to 10th January 2021.

3. Due to Extention the Consequently Due Date for filling of Tax Audit Report has been extended from 31st Dec 2020 to 15th Jan 2021.

4. GST Annual Return (in form GSTR-9C and 9) for Financial Year 2019-20 has been increased from 31st Dec 2020 to 28th Feb 2021.

5. Due Date for making the declaration under Vivid se Vishwas has also been extended from 31st December 2020 to 31st January 2021.

6. Today (31.12.2020) is the last date to hold AGM for 2019-20, avail LLP Settlement & Cos Fresh Start Scheme 2020 & file GSTR-9A for 18-19 by Composition person.

Related Articles/Information

Summary of Important Due date of July and Aug 2020

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CORPORATE AND PROFESSIONAL UPDATE SEPT 27, 2016

Professional Update For the Day:

6Direct Tax:-

IT: Assessee has directly deposited cash in the supplier’s account and has produced the bills, no evasion of tax by claiming the bogus expenditure in cash – Arun Kumar Mondal Vs ITO, W-2(2), Burdwan (2016 (9) TMI 995 – ITAT Kolkata)

SC modifies Karnataka HC order on the issue of taxability of amount received by assessee-company (engaged in real estate business) on account of share capital from various share-holders. ITAT has held that share capital received by the assessee was in the nature of  of capital receipt and cannot be treated as business income despite the same having been received towards allotment of flats/ units. [TS-513-SC-2016]

Indirect Tax:-

CBEC has made amendments in various notification u/s 25(1) in Custom Act 1962 vide Notification No. 52/2016 –Custom-Tariff  dated 23/09/2016.(Click here to view)

Reg. Service Tax exemption on advancement of Yoga [Notification No. 42/2016-Service Tax]

In the below citied case petitioner had calculated and deposited tax 10.3% whereas the tax had to be calculated 12.36% as per department.Delhi high court held that here is no provision in the VCES which permits correction of errors of this nature by the Petitioner.It was not obligatory for the Respondent to inform the Petitioner what the correct rate of service tax was. It was for the Petitioner to have ascertained the correct rate of tax and calculated the service tax.(Techno Concept India Pvt. Ltd. Versus The Deputy Commissioner of Service Tax, Delhi)

GST UPDATES

Under GST,all cesses to be subsumed in GST. Only 5% assessees would be audited in GST regime, against 70-80% by some states now.

FAQ as Issued by CBEC

Q . How to compute ‘aggregate turnover’ to determine eligibility for composition scheme?

Ans. The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, ‘aggregate turnover’ means ‘Value of all supplies (taxable and non-taxable supplies + Exempt supplies + Exports) and it excludesTaxes levied under CGST Act, SGST Act and IGST Act, Value of inward supplies + Value of supplies taxable under reverse charge of a person having the same PAN.

Q . What are the penal consequences if a taxable person violates the condition and is not eligible for payment of tax under the Composition scheme?

Ans. Taxable person who was not eligible for the composition scheme would be liable to pay tax, interest and in addition he shall also be liable to a penalty equivalent to the amount of tax payable. (Section 8 (3) of the MGL).

Q . What is the minimum rate of tax prescribed for composition scheme?

Ans. 1%

Q . When exemption from whole of tax collected on goods and/or services has been granted unconditionally, can taxable person pay tax?

Ans. No, the taxable person providing such goods or services shall not collect the tax on such goods or services.

FAQ on Company Law:

Query: In case of a right issue of shares by a private limited company for which board meeting we should file MGT 14 u/s 179(3)(c). Is it for the Board Meeting where rights issues offer is made or the Board Meeting where rights issue shares are issued and allotted?

Answer: In case of Rights issue, you shall be required to file Form MGT-14 under section 179(3) within 30 Daysof passing the Board Resolution in which Shares are issuedand allotted and put its SRN in Form PAS 3 accordingly.

MCA UPDATE

MCA has made an amendment to the Companies (Management and Administration) Rules, 2014. These rules may be called the Companies (Management and Administration) Amendment Rules, 2016 which shall come into force on the date of their publication in the Official Gazette.

Key Dates:

  • Advance information in BE_2  Formf or 1st fortnight of Oct of functions with booking cost more than rs 1 lakh in Banquet Halls, hotels etc. in Delhi for DVAT-27/09/2016
  • Return by banks in Form no. 26QAA for interest upto Rs. 5000 for September quarter.-30/09/2016
  • E-filling of reconciliation return of statutory forms for the year ending 2015-16-30/09/2016
  • Payment of TDS for the purchase of property for the month of August-30/09/2016
  • Due date for income declaration scheme  2016 is 30th September, no extension expected.

“In order to carry a positive action we must develop here a positive vision.”

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com         E: info@carajput.com             T: 011-233-4-3333, 9-555-555-480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CORPORATE AND PROFESSIONAL UPDATE SEPT 26, 2016

Professional Update For the Day:

tax

Direct Tax:-

IT: Penalty u/s 271B – assessee firm could not get the accounts audited within time limit prescribed u/s 44AB – there is no mala fide reason for not obtaining the accounts audited in time and penalty u/s 271B should not be imposed – M/s. Gemorium Vs ITO Ward-5(1), Jaipur (2016 (9) TMI 962 – ITAT Jaipur)

CBDT has issued office memorandum regarding withdrawal of notifications granting approval  u/s 35(1)(ii) of the Income-tax Act, 1961 in some cases.{ notification.No.203/09/2015/ITA.II  dated 21/09/2016}

IT: Late filing fee u/s 234E – late filing of TDS return prior to 01 JUN 2015 – demand notices u/s 200A for intimation for payment of fee u/s 234E can be said as without any authority of law and the same are quashed and set aside to that extent – Sri Fatheraj Singhvi & Others Vs Union of India & Others (2016 (9) TMI 964 – Karnataka High Court)

IT: Adjustment in respect of levy of fees U/s 234E was indeed beyond the scope of permissible adjustments contemplated U/s 200A – Little Servants of Divine Providence Charitable Trust Vs ITO (TDS), Alappuzha (2016 (9) TMI 960 – ITAT Cochin)

IT: Penalty u/s 271B – assessee firm could not get the accounts audited within time limit prescribed u/s 44AB – there is no mala fide reason for not obtaining the accounts audited in time and penalty u/s 271B should not be imposed – M/s. Gemorium Vs ITO Ward-5(1), Jaipur (2016 (9) TMI 962 – ITAT Jaipur)

IT: Assessee has directly deposited cash in the supplier’s account and has produced the bills, no evasion of tax by claiming the bogus expenditure in cash – Arun Kumar Mondal Vs ITO, W-2(2), Burdwan (2016 (9) TMI 995 – ITAT Kolkata)

INDIRECT TAX:-

ST: Reimbursable expenses cannot be added in the assessable value of the C&F, ST tax is payable only on the commission and not on the reimbursable expenses  – CCE, Indore Vs Virmani Enterprises (2016 (9) TMI 1025 – CESTAT New Delhi)

VAT & ST: Sale of apartment – petitioner doesn’t become works contractor unless it had already entered into a contract with potential purchasers – Oceanus Dwellings Pvt. Ltd. Vs C.T.O. & Ors (2016 (9) TMI 971 – Kerala High Court)

VAT & ST: Sale of apartment – petitioner doesn’t become works contractor unless it had already entered into a contract with potential purchasers – Oceanus Dwellings Pvt. Ltd. Vs C.T.O. & Ors (2016 (9) TMI 971 – Kerala High Court)

GST Updates:-

Under GST compounding dealer can switch to normal dealer during the year but he can’t change again to compounding dealer during same year.

GST: CBEC released Frequently Asked Questions (FAQ) on GST on 21.09.2016. Link athttp://www.cbec.gov.in/resources//htdocs-cbec/deptt_offcr/faq-on-gst.pdf

GST CBEC issues FAQ’S on Registration, Valuation, ITC, Assessment, Audit, Refund, Demand & Recovery, Appeals, Advance Ruling, Offence & Penalties etc.

SEBI Updates:-

 SEBI has issued circular in respect of Permission for trading in futures contracts and modification in contract specifications at exchange level.

SEBI has issued a clarification that ‘Income from Operations’ may be disclosed inclusive of excise duty, instead of net of excise duty, as specified in the Companies Act, 2013.

FAQ on Company Law:

Query:  Can a Pvt. Ltd. Company pay remuneration to its Ordinary Director (other than M.D/WTD) on Monthly, Quarterly or yearly basis apart from 1% or 3% of Net Profit as provided under Section 197 of The Companies Act, 2013?

Answer: Private Company can pay remuneration to director (other than M.D/WTD) without any limit subject to provisions contained in the Articles of Association of the Company. However by passing a board resolution you can fix/revise the remuneration of the directors in private company. 

MCA Update :

MCA released Companies (Management and Administration) Amendment Rules, 2016 vide Notification dated 23.09.2016.  : The Ministry of Corporate Affairs (MCA) has made an amendment to the Companies (Management and Administration) Rules, 2014. These rules may be called the Companies (Management and Administration) Amendment Rules, 2016 which shall come into force on the date of their publication in the Official Gazette.

Amendment is made to clarify the provision of Section 93 of the Companies Act, 2013 under which every listed company is required to file with the Registrar, a return in Form No. MGT.10, with respect to changes in the shareholding position of promoters and top ten shareholders of the company, in each case, representing increase or decrease by two per cent or more of the paid-up share capital of the company, within fifteen days of such change.

Further, Form MGT-6 which is Return to the Registrar in respect of declaration of beneficial interest in shares under section 89 by the company has also been revised.

OTHER UPDATES:-

The Union Cabinet has approved today the proposal of the merging of Union Finance Budget and Railway Budget. Now a Consolidated Budget shall be presented on February 1 every year instead of the last day of the month of February.

Cabinet approves Agreement between India and Samoa for exchange of information with respect to Taxes – See more at: http://taxguru.in/income-tax/cabinet-approves-agreement-samoa-tax-info-exchange.html#sthash.njfis8w1.dpuf

Cabinet approves extension of the validity of Central Orders dated 28.09.2015 in respect of edible oils and edible oilseeds and Central Order No. S.O. No. 2857(E) dated 18.10.2015 in respect of pulses from01.10.2016 to 30.09.2017.

Today is last date for e-payment of ESI, and for DVAT & CST pertaining to august, 2016.

ICAI Updates:-

ICAI: Please pay your Membership and COP fee for 2016-17 before 30 SEP 2016.

Key Dates:

Advance information in BE_2  Formf or 1st fortnight of Oct of functions with booking cost more than rs 1 lakh in Banquet Halls, hotels etc. in Delhi for DVAT -27/09/2016

Time, power, money & body may not cooperate every time in life but Good nature, good understanding, spiritual path & true spirit will always cooperate in life.

Silence is the strong fence around wisdom, If your foot slips, You can re-gain your balance, but if your tongue slips, you can never re-build your image again.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com E: info@carajput.com T: 011-233-4-3333, 9-555-555-480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

HIGHLIGHTS RESULTS OF THE GST COUNCIL MEETING HELD ON 22-23 SEPTEMBER,2016:

HIGHLIGHTS RESULTS OF THE GST COUNCIL MEETING HELD ON 22-23 SEPTEMBER,2016:

www.carajput.com; GST

www.carajput.com; GST

  1. The threshold Annual Exemption Limit fixed at ₹ 20 Lac.
  2. The threshold limit for the north-eastern and hill states paged at ₹ 10 Lac.
  3. GST rates and tax slabs would be decided at three-day’s meeting during 17-19 Oct, 2016.
  4. GST rollout slated for 1st April, 2017.
  5. All cesses will be subsumed in the GST
  6. GST Council’s next meeting on 30th Sep, 2016 to finalise draft GST law / rules.
  7. The state authorities will have jurisdiction over assessees with annual turnover of less than ₹ 1.5 crore.
  8. Those with turnover of over Rs 1.5 Crores would be cross examination either by officers from the Centre or state to avoid dual control.
  9. The existing 11 Lac service tax assessees would continued to be assessed by the Centre.
  10. New assessees which would be added to the list would be divided between the Centre and the States.
  11. Council is working on a compensation law and draft compensation formula.
  12. The base year for calculating compensation would be 2015-16 and the formula for payment of compensation would be deliberated b/w the state and Central authorities.
  13. All decisions today by the GST Council were taken on the basis of consensus.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com E: info@carajput.com T: 011-233-4-3333, 9-555-555-480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)