TDS and Advance Tax Rates

Click here to download

(1)  Following Forms are required to be furnished quarterly.

a) Various Forms and their description:

b) As per Rule 31-A above forms are required to be submitted ELECTRONICALLY in the following cases:

• Limited Companies
• Individual, HUF and Firms liable to u/s 44AB audit in the immediate previous year.
• If deductees records are twenty or more.

(2) 30% disallowance of expense if TDS not deducted or not deposited after deduction in transactions with residents:

If TDS is to be deducted from any payment to a resident and it  is not deducted OR after deduction it is not deposited on or before the due date of filing of income tax return then  30% of  such expenses shall not be allowed as deduction, while computing income for tax purposes [Section 40(a)(ia)].

However, if the payment of such TDS is made after the due date of filing of return of income, the corresponding expense shall be allowed as a deduction in subsequent year in which the payment is made.

Example: If M/s ABC LLP has payment of Professional fees of Rs.1,00,000/- on 25^th February 2020 on which TDS though deductible, was not deducted. The due date of income tax return for ITAY 2020-21 is 30-09-2020. Here since TDS is not deducted the amount of Rs.30,000/- will not be deductible as an allowable expense. However, if M/s ABC LLP deducts TDS on 01-11-2020 and deposits this TDS on 02-11-2020 then Rs. 30,000/- will be deducted as an expense in computing total income of ITAY 2021-22. 

(3) 100% disallowance of expense if TDS not deducted or not deposited after deduction in transactions with non-residents:

If TDS is to be deducted from any payment like interest, royalty, fees for technical services or any other sum chargeable to income tax to a non resident and it  is not deducted OR after deduction it is not deposited on or before the due date of filing of income tax return then 100% of  such expenses shall not be allowed as deduction, while computing Total Income for tax purposes [Section 40(a)(i)].

However, if the payment of such TDS is made after the due date of filing of return of income, the corresponding expense shall be allowed as a deduction in subsequent year in which the payment is made.

 (4) Liability of employers to issue Form 16 and Form 12BA:

Form No. 16 for deduction of Tax from salary is to be issued by 15^th June of the financial year immediately following the financial year in which the income was paid and tax deducted.

Form No. 12-BA is to be issued along with Form 16, if salary amount exceeds Rs. 1,50,000.

As per section 192(2C) of Income Tax Act,  the responsibility of providing correct and complete particulars of perquisites or profits in lieu of salary given to an employee is placed on the person responsible for paying such income i.e., the person responsible for deducting tax at source.

The form and manner of such particulars is prescribed in Rule 26A, Form 12BA (Annexure II) and Form 16 of the Income Tax Rules. Information relating to the nature and value of perquisites is to be provided by the employer in Form 12BA in case salary paid or payable is above Rs.1,50,000/-. In other cases, the information would have to be provided by the employer in Form 16 itself.

(5) Other Points:

Form No. 16A (for TDS other than payment of Salary) is to be issued within 15 days from the due date of filing of statement of TDS as shown in table below.

• All deductors should issue Form No. 16-A by downloading from TRACES WEBSITE with Unique Certificate Number.
• If tax is deducted u/s 194IA for transfer of immovable property , TDS certificate is to be issued in Form 16B. Form no.16B is to be issued within 15 days from the date of furnishing Form 26QB.

(5) Due date of Payment of Tax Deducted:

• On the 7th day of the month following the month of deduction for the months of April to February.
• In case Tax deduction is made in the month of March – on or before 30th April.

(6) If the recipient does not have P.A. No.: Tax deduction shall be made as follows (See. 206AA):

(7) When deductor has not deducted tax at source from the transport operator when transport operator during the course of business of plying, hiring or leasing goods carriages, where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration (draft stated below) to that effect, and also has given P.A. Number to the deductor, the deductor shall submit these details to the Income Tax Department in the prescribed format.

“DECLARATION UNDER SECTION 194C(6) OF THE INCOME-TAX ACT, 1961

(As per CBDT Circular 19/2015 dated 27-11-2015: Para No. 43.7)

No………(To be provided by payee)

Date……………..

From : (Name & address of the payee)

To : (Name & address of the payer)

The freight/transport charges amounting to Rs…………for transportation of goods by goods carriages having Registration Number …………may be paid or credited to my account without deduction of tax under section 194C of the Income-tax Act, 1961.

I/We, ……………….. in the capacity of ……………hereby declare that I/We do not own more than ten goods carriage and also did not own more than ten goods carriage at any time during the period from 1st April …….. to ……………..My Permanent Account Number (PAN) is ……….I hereby enclose a self-attested photocopy of my PAN Card.

For more information, please contact personally.

TCS Rates under Income Tax Act, 1961 

What is Tax Collection at Source?

Tax collected at source (TCS) is an extra amount collected as tax by a seller of specified goods from the buyer at the time of sale / receipt of sale consideration. The tax so collected has to be remitted to Income Tax department i.e. government.

Is it necessary to obtain a ‘Tax Collection number’ from Income Tax department?

No. It is not necessary. TDS number will have to be quoted. The buyer shall give his Permanent Account Number (PAN) to the seller so that seller may collect TCS at prescribed rates. If the buyer’s PAN is not available, then TCS shall be collected at higher rates as specified (5% or 1% depending upon the transaction).

Whether any TCS is to be collected on sale of Goods?

Yes. There are separate rates depending upon the nature of goods. Please see the Table below.

What are the due dates for payment of TCS collected?

Rates of TCS 

[Source Press release of CBDT dated 13-05-2020. *Sec 206C(1G) not mentioned in Press release]

(1) Instalments and percentage of tax payment for every assessee (other than assesses covered u/s 44AD & 44ADA)

(2) Assessees covered u/s 44AD & 44ADA of the Income Tax Act, 1961.

Amount paid after 15^th March but on or before the 31^st March shall also be treated as advance tax paid during the financial year.

Resident individual of the age of 60 years or more, at any time during the previous year,  who does not have income under the head ‘Profits and Gains of  business or profession’ is not required to pay advance tax.