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Legal provisions
The scheme of tax deduction at source (TDS) is such that, persons responsible for making payment of income, are responsible to deduct tax at the prescribed percentage and deposit the same to the Central Government’s account within the stipulated time.
Rate of TDS for the financial year 2013-14
Nature of payment Threshold
Limit
Section Rate
Payments to Contractors, Sub-contractors and Advertising Contractors (Individuals)
30,000 194C 1%
Payments to Contractors, Sub-contractors and Advertising Contractors (Other than Individuals)
30,000 194C 2%
Payments to Contractors, Sub-contractors in Transport Business
Not applicable
194C 0%
Rent of Plant, Machinery or Equipment 1,80,000 194I 2%
Rent of Land, Building or Furniture 1,80,000 194I 10%
Commission or Brokerage 5,000 194H 10%
Fee for Professional Services 30,000 194J 10%
Interest other than interest on securities 5,000 194A 10%
Rate of TDS for the financial year 2013-14
Notes: • Threshold limit of Rs. 30000/- is for single payment and TDS will be NIL
if the annual payment is less than Rs. 75000/-, if Payments to Contractors, Sub-contractors and Advertising Contractors (Individuals).
• If the recipient does not furnish his PAN to the deductor, tax has to be deducted at the rate of 20%.
• Section 194C are applicable only where contract is either a WORKS CONTRACT or a CONTRACT FOR SUPPLY OF LABOUR FOR WORKS CONTRACT. Section 194C is not applicable to the contract for sale of goods.
• Time of deposit of TDS/TCS Where the income or amount is paid or credited in the month of March –
April 30 Where the income or amount is paid or credited before March 1 – within 7
days from the end of the month in which tax is deducted
Rate of TDS for the financial year 2013-14
Notes: Consequences for failure:
Fails to deduct/collect Interest at 1% pm from the date on which tax was deductible to the date of actual deduction
Fails to pay after deduction
Interest at 1.50% pm from the date on which tax was actually deducted to the date of actual payment
Rate of TDS for the financial year 2013-14Relief for the defaulters (w.e.f 01/07/2012):The payer shall not be deemed to be in default if:• the recipient has included such income in his return and
paid tax on such income; and• the payer submits a certificate (in Form 26A/Form 27BA in
case of TCS) to this effect from a Chartered Accountant.In such a case, interest shall be payable at 1%
from the date on which tax was deductible to the date of furnishing of return of income.
Quarterly statement of tax deduction/collection
Particulars Form No
Tax deduction from salary u/s. 192 24Q
Tax deduction from the payments to non-resident 27Q
Tax deduction in any other case 26Q
Tax collection 27EQ
Notes: Where an employee has worked with a deductor for part of the financial year only, the deductor should deduct tax at source from his salary and report the same in the quarterly statement of the respective quarters up to the date of employment with him. While submitting Form no. 24Q4, the deductor should include particulars of that employee in Annexure II & III irrespective of the fact that the employee was not under his employment on the last day of the year.Similarly, where an employee joins employment with deductor during the course of the financial year, his particulars should be reported by the current deductor in Form 24Q of the relevant quarter. Further, while submitting Form No. 24Q for the last quarter, the deductor should include particulars of such employee for the actual period of employment under him in Annexure II & III
Quarterly statement of tax deduction/collection
Quarter ending Due date of submission of quarterly TDS/TCS returns
June 30 July 15
September 30 October 15
December 31 January 15
March 31 May 15 of the following financial year
Certificate of tax deduction/collection
Form Periodicity
Due Date
Form 16 Annual On or before May 31st
Form 16A/27D
Quarterly For quarter ending 30th June – on or before July 30For quarter ending 30th September – on or before October 30For quarter ending 31st December – on or before January 30For quarter ending 31st March – on or before May 30