File your TDS returns for FY: 2016-17 (Q4) by 31st May, 2017

31st May is the last date for filing your TDS Returns for FY:2016-17, Quarter 4. File on time and avoid unwarranted penalties and default notice. Click here for more details

Healthy Practices for Error-Free TDS Returns

  • Ensure tax has been deducted at correct rates
  • TDS has been deposited (including interest, if any, for delay in deposit)
  • Accurate reporting of deductee & payment challan information
  • Submit return on time to avoid penalty under section 234E



Points to remember before filing the quarterly TDS statement

Given below are the points one should remember before filing quarterly TDS statement:

  • Correct Reporting: Cancellation of TDS return and deductee row is no longer permissible. Accordingly, it is very important to report correct and valid particulars (TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees and other particulars of deduction of tax) in the quarterly TDS return
  • Quote correct and valid lower rate TDS certificate in TDS return wherever the TDS has been deducted at lower / zero rate on the basis of certificate issued by the Assessing Officer
  • Last provisional receipt number to be quoted in regular TDS / TCS returns: While filing new regular (original) TDS return, it is mandatory to quote the last accepted provisional receipt number of the regular quarterly TDS / TCS return of any form type
  • TDS return cannot be filed without quoting any valid challan and deductee row
  • Late tds filing fee, being statutory in nature, cannot be waived
  • Download PAN Master from TRACES and use the same to file new statement to avoid quoting of incorrect and invalid PAN
  • Validate PAN and name of fresh deductees from TRACES before quoting it in TDS statement
  • Download TDS certificate (Form 16A) from TRACES ( bearing unique TDS certificate number and issue to the taxpayers within due date
  • File correction statements promptly in case of incomplete and incorrect reporting
  • Download the justification report to know the details of TDS defaults, if any, on processing of TDS return
  • Do view your Dashboard regularly to know about your TDS performance
  • Government deductors should obtain BIN (Book Identification Number) from their Accounts Officer (AIN holder) in time and quote the same correctly in TDS statement

Bombay High Court Order: No TDS On Salaries Reimbursed Under Secondment Agreement

Bombay High Court has ruled that payment of salary under secondment agreement does not attract tax deducted at source (TDS).

Secondment agreement is an agreement between a foreign Company and its Indian counterpart wherein the staff of foreign company deputed to the Indian counterpart for a certain period of time, remains on the payroll of foreign company. The Indian company reimburses the salary and other cost to foreign company and the staff’s salary is taxable in India.

In this case the Indian counterpart cited the payments as reimbursement of their expenditure, whereas an AO(Assessing Officer) considered the payments as fee for technical services as per the provisions of the Double Taxation Avoidance Agreement (DTAA). So he passed orders holding the company to be liable for the tax and interest. Commissioner of Income Tax (Appeals), gave a counter order to that of the AO. After that the Revenue Tribunal held that the Commissioner was right.

A division bench of Justice SC Dharmadhikari and Justice PD Naik supported the findings of the tribunal in the present case and dismissed the appeal filed by the Director of Income Tax (International Taxation) against the order of the tribunal.

Click here to access the copy of the order


Fees and Penalty for Late Filing of TDS Returns

Fees and Penalty for Late Filing of TDS Returns are as follows:

Section 234E-Levy of Fees 

  • Failure to submit TDS return on time will result in fees on the deductor.
  • If you delay or forget to file your TDS return, fees of Rs. 200 per day will be levied on the deductor, as long as TDS return is not filed.
  • The levied amount of fee is not supposed to exceed the TDS deductibles.
  • Prior to TDS filing such fee should be paid and it should be reflected in the TDS return.

Section 271H-Penalty

  • Deductor has to pay a penalty ranging from minimum of Rs. 10,000/- to One Lac rupees,
    • If deductor exceeds one year time limit to File TDS Statement.
    • If deductor furnishes incorrect details like PAN, TDS Amount, Payment of Challan etc.