TDSMAN Blog

Smart & Easy TDS Software for Preparing TDS Returns

TDSMAN Blog - Smart & Easy TDS Software for Preparing TDS Returns

Consequences of TDS defaults

Failure to deduct taxes or wrong deduction of TDS (non deposit, short deposit or late deposit):

Default/ Failure Section
Nature of Demand Quantum of demand or penalty

Failure to deduct tax at source

201(1) Tax demand Equal to tax amount deductible but not deducted
201(1A) Interest @1 % p.m. of tax deductible
271C Penalty Equal amount of tax deductible but not deducted
Failure to deposit tax at source 201(1) Tax demand Equal to tax amount not deposited
  201(1A) Interest @1.5% p.m. of tax not deducted
  276B Prosecution Rigorous imprisonment for a term for a minimum of 3 months which may extend to 7 years and with fine
Failure to apply for TAN No. u/s 203A 272BB Penalty Rs. 10000
Failure to furnish prescribed statements u/s 200(3) 272A(2)(k) Penalty Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to issue TDS certificate u/s 203 272(A)(g) Penalty Rs. 100 every day during which the failure continues subject to maximum of TDS amount.
Failure to furnish statement of perquisite or profit in lieu of salary u/s 192(2C) 272(A)(i) Penalty Rs. 100 every day during which the failure continues subject to maximum of TDS amount
Failure to mention PAN of the deductee in the TDS statements and certificates 272B Penalty

Rs. 10000

 If TDS return is not filed within the specified due dates being 31st July, 2016 for the 1st quarter corresponding to FY 2016-17, the major consequences would be levy interest.

However in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs. 1 Crore or Rs. 25 Lacs respectively in previous year, there is a requirement to deduct tax at source.

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No TDS for provident fund withdrawals of up to Rs 50,000 from June 1

No tax would be deducted at source for PF withdrawals of up to Rs 50,000 from June 1.

The government has notified raising the threshold limit of PF withdrawal for deduction of tax (TDS) from existing Rs 30,000 to Rs 50,000, a senior official told PTI.

“The Finance Act, 2016 has amended section 192A of Income Tax Act, 1961 to raise the threshold limit of PF withdrawal from Rs 30,000 to Rs 50,000 for Tax Deducted at Source (TDS),” the notification stated.

The provision will come into effect from June 1, 2016, providing relief to subscribers of retirement fund body EPFO.

The government had introduced the proposal to deduct TDS on PF withdrawals in order to discourage pre-mature withdrawal and to promote long term savings.

According to existing provisions, TDS is deducted at the rate of 10 per cent provided PAN is submitted.

TDS will be deducted at the rate of 10 per cent provided PAN is submitted.

However, in case Form 15G or 15H is submitted by the member, then TDS is not deducted. These forms are to declare that their income would not be taxable after receiving payment of their PF accumulations from retirement fund body EPFO.

While Form 15H is submitted by senior citizens (above 60 years of age), Form 15G is submitted by claimants below the age of 60 years.

TDS is deducted at the maximum marginal rate of 34.608 per cent if a member fails to submit PAN or Form 15G or 15H.

However, there are certain exceptions to deduction of TDS by EPFO. TDS shall not be deducted in case of transfer of PF from one account to another PF account.

Also, no tax is deducted if employee withdraws PF after a period of five years.

Source: The Times of India

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Details available in TDS certificate (Form 16 / 16A)

The details available are as below:

  • Name / Address / TAN of Deductor
  • Name / Address / PAN of Tax Payer
  • Certificate Number
  • Summary of payment made by Deductor
  • Summary of tax deducted at source in respect of Tax Payer
  • Details of tax deducted and deposited in Central Government account through challan / Book Adjustment (in case of Government deductor)
  • Details of tax deducted and deposited in Central Government account through challan (in case of Non-Government deductor)

Source: TRACES

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