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TDS Statements filed for Q 1, FY 2014-15, not filed yet for Q 2, FY 2014-15

CPC (TDS) has issued a communication to all deductors who have filed TDS Statements  for Q1, FY 2014-15 but not filed yet for Q2 as of November 1, 2014.

The issued communication has been given below:

Dear Deductor,

As per the records of the Centralized Processing Cell (TDS), you have filed TDS Statements for Q1, FY 2014-15, however, no TDS Statements have been filed for Quarter 2 as of November 1, 2014.

If you are not required to submit the relevant statement, you are requested to submit a declaration by taking appropriate action as suggested under “Action to be taken” in this communication. Otherwise, your urgent attention is invited to relevant CBDT Circulars and provisions of the Income Tax Act, mandating filing of TDS Statements and Issuance of TDS Certificates downloaded from TRACES.

1. Mandatory filing of TDS Statements:

Please refer to the provisions of section 200(3) of the Income Tax Act, 1961 read with Rule 31A, which reads as follows:

Every person responsible for deduction of tax under Chapter XVII-B, shall, in accordance with the provisions of sub-section (3) of section 200, deliver, or cause to be delivered, the following quarterly statements to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems), namely:

  • Statement of deduction of tax under section 192 in Form No. 24Q;
  • Statement of deduction of tax under sections 193 to 196D in -
    • Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and
    • Form No. 26Q in respect of all other deductees.

It is, therefore, advised to file the applicable TDS Statements at the earliest to comply with the above provisions.

2. Implications of Non/ Late filing of TDS Statements:

  • For Deductors:

In case of late filing of TDS Statements, a fee shall be levied on the deductor u/s 234E of the Act, which reads as under:

Where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues. 

  • For Tax payers:

Non/ Late filing of TDS statements results into the TDS Credit not being available to the deductees. They, therefore, will not be able to claim the credit for tax already deducted from the payments made to them. Please note that TDS Certificates will not be available until the TDS Statements are duly filed. 

3. Actions to be taken:

Please file the relevant TDS Statement without any further delay.

  • If you are not required to file the same, please submit a declaration for Non-filing on TRACES. For this purpose, you can login to TRACES, navigate to “Statements/ Payments” menu and submit details under “Declaration for Non-Filing of Statements”
  • Issue TDS certificates after generating and downloading the same from TRACES. TDS Certificates downloaded only from TRACES Portal will be valid.

For any assistance, you can write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

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FAQ – TDS on rent under section 194-I

1. What are the provisions relating to TDS on rent? From which date same are applicable?

As per the Finance Act, 1994 the provisions of TDS on rent have been introduced w.e.f. 1.6.1994. The salient feature of Sec. 194-I are as under:-

i) The provisions are applicable only in cases where the person making the payment of rent is an individual or HUF who is required to get his accounts audited u/s 44AB in the immediately preceding financial year (w.e.f. 1.6.2002) or any other person responsible for paying to a resident any income by way of rent. Prior to 1.6.2002 no individual or HUF was liable to deduct TDS from rent.

ii) The TDS is required to be deducted in case the rent paid or payable to a particular person during a financial year exceeds Rs. 1,80,000 w.e.f.1.7.2010 (upto 30.6.2010 the limit was Rs. 1,20,000).

iii) A facility has also been provided to obtain a certificate from the Assessing Officer for deduction of income-tax at a lower rate or for no deduction of income-tax in appropriate cases by making application in From No.13.

iv) For the purpose of this section rent means any payment by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or factory building together with furniture, fixture, fittings and land appurtenant thereto. It will not be relevant whether the payee is the owner of the building or not?

W.e.f. asst. year 2007-08, the Taxation Laws (Amendment) Act, 2006 have enlarged the scope of rent for the purpose of Sec. 194I, so as to include machinery, plant and equipment, whether rented together with building or separately, irrespective of the fact whether they are owned by the payee or not?

v) The rates of TDS on rent are as under:

Particulars Rate upto 30.09.09 Rate w.e.f. 01.10.09
a) Use of any land, building, furniture or fittings 15% (when payee is individual or HUF) 20% in other cases. 10% for all assessees
b) Use of plant, machinery or equipment 10% (from 1.6.07 to 30.9.09) prior to 1.6.07 the rate was same as rent of land and building 2% for all assessees
W.e.f. Financial Year 2009-10, education cess or higher education cess is not required to be deducted at source in case of payment to domestic companies or any person who is resident in India. However, education cess is to be deducted in case the payment is made for salary.

vi) W.e.f. 1.4.2010, where the deductee fails to furnish its PAN or furnishes an incorrect PAN to the deductor, the deductor will be required to deduct tax at higher of the following rates: source : www.trpscheme.com (As amended by Finance Act, 2013)

a. At the rate specified under the Income Tax Act; or
b. At the rates in force; or
c. At the rate of 20%.

2. Will tax be deducted from service tax included in rent?

Service tax paid by the tenant does not partake the nature of income of landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore tax deduction at source (TDS) under Sec. 194-I of the Income-tax Act would be required to be made on the amount of rent paid/payable without including service tax.

Further No TDS on service Tax: As per circular 01/2014 dated 13.01.2014 TDS is not applicable on service tax part if service tax is shown separately.

3. What does the “rent” mean for the purpose of Sec. 194-I?

“Rent” means any payment, by whatever named called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together)any,-

a. Land; or
b. Building (including factory building); or
c. Land appurtenant to a building (including factory building); or
d. Machinery; or
e. Plant; or
f. Equipment; or
g. Furniture; or
h. Fittings,

whether or not any or all of the above are owned by the payee.

In other words, besides tax on land and building, tax shall now also be deductible for leasing out or hiring of machinery, plant, equipment, furniture and fittings whether given separately or together. Further, it shall be deductible whether or not any or all of the above are owned by the payee?

4. What are the circumstances under which no tax is to be deducted at source on rent as defined under Sec. 194-I ?

No tax is required to be deducted at source under this section if the following conditions are satisfied:

A) Where aggregate amount of rent does not exceed Rs. 180,000:- No tax is to be deducted if the aggregate amount of rent in the previous year does not exceed Rs. 180,000.

B) Rent paid to the Government and certain entities:- No tax at source needs to be deducted from payments by way of rent made to Government and entities whose income is exempt from income-tax under clauses (20) and (20A) of Sec.10 of the Income tax Act.

C) Certain entities required to file return under Sec. 139(4A) or 139(4C):- As per rule 28AB certain entities who are required to file return of income under Sec. 139(4A) or 139(4C) may apply in Form No. 13 for no deduction of tax at source provided certain conditions are satisfied.

D) Certain entities whose income is unconditionally exempt under Sec. 10:- In case of certain entities whose income is unconditionally exempt under Sec. 10 and who source : www.trpscheme.com (As amended by Finance Act, 2013)

are statutorily not required to file return under Sec. 139 there will be no requirement for TDS, since their income is any way exempt.

5. Where is the limit of Rs. 180,000 for non-deduction of tax at source applicable in case of each co-owner?

Where the share of each co-owner in the property is definite and ascertainable, the limit of Rs. 180,000 will be applicable to each co-owner separately.

6. What are the provisions regarding low deduction or no deduction of tax on rent under Sec. 194-I ?

Any person to whom rent is payable may make an application in Form No.13 to the Assessing Officer and obtain such certificate from him, as may be appropriate, authorizing the payer not to deduct tax or to deduct tax at lower rate.

As per Sec. 206AA(4), w.e.f. 1-4-2010, no certificate under Sec. 197 for deduction of tax at Nil rate or lower rate shall be granted, unless the application made under that section contains the Permanent Account Number of the applicant.

7. What is method of taking credit of TDS on advance rent ?

On advance rent pertaining to more than one financial year, the tax is deducted at source in the year of receipt of advance rent. The credit for TDS shall be allowed to the assessee in the same proportion in which such income from rent is offered for taxation for different assessment years, based on the single TDS certificate furnished for the entire advance rent.

However, if the rent agreement gets terminated in a subsequent year or rented property is transferred and the balance advance is refunded to the transferee or the tenant, as the case may be, the credit for entire balance of TDS which has not been given credit, shall be allowed in the year of termination.

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Ensure that your TDS reaches the income-tax department

Ensure that your TDS reaches the income-tax department. If not, an assessee might be charged interest for not paying TDS on time.

Recently, a senior citizen received a notice from the Income Tax Department, asking her to pay Rs 30,000, the tax on her bank fixed deposits for assessment year 2013-14, along with interest, for late payment of tax. She was surprised, as her bank had deducted the tax at source (TDS).

What had happened was the bank had deducted TDS after the end of the financial year, owing to which she didn’t get the tax credit for the previous year.

There are several instances of taxpayers getting notices from the I-T department for no fault of theirs. Notices might be sent if TDS hasn’t been deducted, or if the TDS has been deducted but not paid to the I-T department on time.

If a bank doesn’t deduct TDS on fixed deposits, or does this after the end of the financial year, the onus is on the taxpayer to show he/she doesn’t intend to avoid tax, that it was merely an error. One of the ways to go about this is showing the interest income while filing tax returns and paying taxes. In case this isn’t done, you could file a revised return. But ensure you revise the tax return before the end of the next assessment year, says Rakesh Nangia, of Nangia and Company, chartered accountants.

However, if the interest income is being declared on a cash basis, the assessee can carry forward the TDS by the bank and clam credit in the year in which the income is taxed. In case the fixed deposit is for five years, you could carry forward the TDS and pay it in the last year, when it matures.

If your bank deducts and pays the tax later and you, too, do this (while following an accrual basis), you could claim the tax paid twice by filing a revised return. This process, however, might take time, says Nangia. You will have to take up the matter with the assessing officer of your ward and explain to him the details of your case.

Also, if you change jobs in the middle of a year and the previous employer deducts tax but doesn’t pay this to the I-T department, you might get a tax notice. In this case, too, one must show the income while filing ITR-V and take up the matter with the tax officer.

The sale of a property worth at least Rs 50 lakh involves TDS of one per cent. For such sales, it is the buyer’s responsibility to pay the TDS; also, it is mandatory to do this online. Only then will the seller be able to claim credit for such TDS. Otherwise, the seller could end up paying a huge interest and penalty, Nangia says.

Source: Business Standard

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CPC (TDS) communication to Govt. Deductors for “Mismatch in BIN” reported in TDS Statements

Dear Deductor, 

Centralized Processing Cell (TDS) has observed substantial cases of mismatch in Book Identification Number (BIN) in Quarterly TDS Statements. 

As you may be aware that at the time of filing TDS statements, it is mandatory:

  • To quote the BIN particulars correctly, through which TDS payments have been made. 
  • The TDS forms prescribe quoting of such BINs and the underlying deductee transactions corresponding to such BINs. 

However, it has been observed that mistakes have been committed earlier, while reporting tax payments, in some of your TDS statements. 

Please be advised that mismatch of such BINs may lead to Defaults on account of “Short Payment”.

You are therefore, advised to ensure that Correct BIN details, as communicated to you through your respective Pay and Account Office (PAO) after filing their respective Form No. 24G, are quoted in your TDS Statements for avoiding mismatch of BIN. 

For any assistance, you can call our toll-free number 1800 103 0344. 

CPC (TDS) is committed to provide best possible services to you. 

CPC (TDS) TEAM

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