Difference between Late Payment & Late Deduction

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The difference between late payment and late deduction:

Late payment: After the tax is deducted at source it has to be deposited into the government account by 7th of the next month (except March for which it is 30th April). If it is deposited later than the due date, late payment interest is charged. The rate of interest for late payment is 1.5% per month or part of a month of the delay.

Late deduction: If the tax is deducted later than the date on which it was deductible i.e. either at the time of giving credit or at the time of payment of the dues, whichever is earlier, late deduction interest is charged. The interest for late deduction is at the rate of 1% per month or part of a month of the delay.

Interest on Late Payment of TDS

TCS on sale of goods – Amendment from 1st October 2020

 

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TDSMAN updated with FVU ver. 6.9 & FVU ver. 2.165

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TDSMAN has been updated for the following newly released File Validation Utilities:

FVU ver. 6.9 – For statement pertaining to FY 2020-21 onwards
FVU ver. 2.165 – For statement up to FY 2009-10

To update TDSMAN – Click on: Utilities – Update Software

Click here to view the key features of FVU version 6.9 & FVU 2.165

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Key Features – File Validation Utility (FVU) version 6.9 & 2.165

File Validation Utility (FVU) version 6.9

Section codes 194LBA(a) and 194LBA(b) for Form 26Q

This section will be applicable for regular and correction statements pertaining to FY 2020-21 onwards.

• Addition of Section code 194NF for Form 26Q and 27Q

194NF – Payment of certain amounts in cash to non-filers

This section will be applicable for regular and correction statements pertaining to FY 2020-21 for quarter 2 onwards.

• Section codes 194LBA(a), 194LBA(b) and 194LBA(c) for Form 27Q

194LBA (a) – Income referred to in section 10(23FC)(a) from units of a business trust
194LBA (b)– Income referred to in section 10(23FC)(b) from units of a business trust
194LBA (c) – Income referred to in section 10(23FC)(c) from units of a business trust

This section will be applicable for regular and correction statements pertaining to FY 2020-21 onwards.

• Addition of new columns for Form 26Q and 27Q

New columns “Amount of cash withdrawal which is in excess of Rs. 20 lakhs but does not exceed Rs.1 crore for cases covered by sub-clause (a) of clause (ii) of first provision to section 194N”

and

“Amount of cash withdrawal which is in access of Rs. 1 crore for cases covered by sub-clause (b) of clause (ii) of first provision to section 194N” will be added under Annexure I (Deductee details)

The above will be applicable for regular and correction statements pertaining to FY 2020-21 for quarter 2 onwards.

• Addition of new remark value ‘D’ for section code 194A of Form 26Q

D – “No deduction or lower deduction is on account of payment made to a person or class of person on account of notification issued under sub-section (5) of section of 194A”

The above will be applicable for regular and correction statements pertaining to FY 2020-21 onwards.

• Addition of new remark value ‘E’ for all section codes of Form 26Q

E – “No deduction is on account of payment being made to a person referred to in Board Circular no. 3 of 2002 dated 28th June, 2002 or Board Circular no. 11 of 2002 dated 22nd November, 2002 or Board Circular no. 18 of 2017 dated 28th May, 2017”

The above will be applicable for regular and correction statements pertaining to FY 2020-21 onwards.

• Addition of new remark value ‘G’ for all section codes of Form 27Q

G – “No deduction is in view of clause (a) or clause (b) of sub-section (1D) of section 197A”

The above will be applicable for regular and correction statements pertaining to FY 2020-21 onwards.

This version of FVU is applicable with effect from October 20, 2020.

File Validation Utility (FVU) version 2.165

This version of FVU is applicable with effect from October 20, 2020.

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Preparing Nil TDS Statement / Declaration

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TRACES introduced NIL TDS Statement/Declaration of TDS from the FY 2014-15. This is applicable for Deductors who did not deduct any tax during the relevant quarter.

What is the benefit of filing a Nil TDS Statement?

The benefit of this facility is that instead of filing nil TDS/TCS Statement for a particular quarter/period, one just needs to update the status to non-filing Statement. After updating of status, TDSCPC will not send any notice for non-filing of TDS Statement.

How does it help the Department?

As per income tax rules, nil eTDS statement is not mandatory due to which, the department is not able to find out the difference between the following two types of Deductors.

– Deductors required to file return but not filed
– Deductors not required filing return

What is the Procedure of filing Nil TDS Declaration for non-filing TDS statement?

The process is as follows:

1. Login through your register id at www.tdscpc.gov.in

2. Go to “Statement/Payments TAB after login >then declaration for Non-filing of TDS statement

3. On click of declaration for Non filing of TDS statement link you, follow the instructions and provide the required information – financial year, quarter, statement type, reason for non-filing, etc.

NoteIf deductor has Permanently closed his business, he should contact the Assessing Officer to close his TAN

Basic provisions relating to due date for payment of TDS

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