Sections under which interest for various delays/ defaults need to be paid

The sections under which interest for various delays/ defaults need to be paid are as follows:

  • Section 234A for delay in filing the return of income
  • Section 234B for default in payment of advance tax
  • Section 234C for deferment of payment of individual instalment or instalments of advance tax
  • Section 234D for excess refund granted to the taxpayer
  • Section 201(1A) for failure to deduct tax at source/delay in payment of tax deducted at source
  • Section 206C(7) is levied for failure to collect tax at source/delay in payment of tax collected at source
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Basic provisions relating to due date for payment of TDS

The various items of payment on which tax is to be deducted by the payer has been provided  in Section 192 to 195. The tax deducted by the payer (i.e., a non-Government payer) has to be paid to the credit of the Government as follows:

Tax deducted during the month of April to February should be paid to the credit of the Government on or before 7th  day of the next month.

Example 1: Tax deducted on 25th April, 2018 has to be deposited to Government’s account by 7th of May, 2018
Example 2: Tax deducted on 15th December, 2018 has to be deposited to Government’s account by 7th of January, 2019.

Tax deducted during the month of March should be paid to the credit of the Government on or before 30th of April.

Example: Tax deducted on 15th March, 2018 has to be deposited to Governments account by 30th of April, 2018.

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TDS/TCS Statement – Online Filing

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Steps for filing TDS/ TCS Statement online:

Step – I

The data structure (file format) in which the e-TDS / e-TCS return is to be prepared has been notified in https://www.tin-nsdl.com/services/etds-etcs/etds-rpu.html

Step – II

e-TDS/e-TCS return in accordance with the file formats is to be prepared in clean text ASCII format with ‘txt’ as filename extension. e-TDS/e-TCS return can be prepared using Return Preparation Utility provided by NSDL or any other third party software

Step – III

Once the file has been prepared as per the file format, it should be verified using the File Validation Utility (FVU) provided by NSDL

Step – IV

In case the file has any errors the FVU will give a report of the errors. Rectify the errors and verify the file again through the FVU.

Step – V

Generated .fvu file can be submitted at TIN-FC or uploaded at http://incometaxindiaefiling.gov.in/ website. The link below takes you to a user manual which  guides you to Upload the statement.

Click here to view TDS Statement Upload/View – User Manual.

For Online upload of TDS/TCS Statement, registration of organisation at http://incometaxindiaefiling.gov.in/ is mandatory

 

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Charitable Trust – TDS on Expenditure

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As per the Budget proposal for 2018-19, if the charitable trust does not deduct TDS as expenses in which it was supposed to do so, 30% of such expenditure will be disallowed.

The text in the Finance Bill 2018 reads as under:

Tax deduction at source and manner of payment in respect of certain exempt entities

The third proviso to clause (23C) of section 10 of the Act provides for exemption in respect of income of the entities referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of said clause in a case where such income is applied or accumulated during the previous year for certain purposes in accordance with the relevant provisions. Section 11 of the Act also contains provisions relating to income from property held for charitable or religious purposes.

At present, there are no restrictions on payments made in cash by charitable or religious trusts or institutions. There are also no checks on whether such trusts or institutions follow the provisions of deduction of tax at source under Chapter XVII-B of the Act. This has led to lack of an audit trail for verification of application of income.

In order to encourage a less cash economy and to reduce the generation and circulation of black money, it is proposed to insert a new Explanation to the section 11 to provide that for the purposes of determining the application of income under the provisions of sub-section (1) of the said section, the provisions of sub-clause (ia) of clause (a) of section 40, and of sub-sections (3) and (3A) of section 40A, shall, mutatis mutandis, apply as they apply in computing the income chargeable under the head “Profits and gains of business or profession”.

It is also proposed to insert a similar proviso in clause (23C) of section 10 so as to provide similar restriction as above on the entities exempt under sub-clauses (iv), (v), (vi) or (via) of said clause in respect of application of income.

These amendments will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent years.

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