Guidelines for reporting TDS transactions not exceeding / exceeding threshold limit in quarterly TDS statements

Guidelines for reporting TDS transactions not exceeding / exceeding threshold limit in quarterly TDS statements (as issued by Directorate of Income Tax – Systems). 

Below guidelines may be referred, if deductor wishes to report the transaction in the quarterly TDS statement where no tax is deducted as threshold limit (as per the provisions of the Income tax Act) of amount paid/credited to deductee has not exceeded in the initial quarter (s) but has exceeded in subsequent quarter. 

1)    Flag Y may be selected in the field of Reason for non deduction/ lower deduction/ higher deduction to highlight transactions where TDS is not deducted as the threshold for deducting tax has not exceeded.

2)    Threshold flag can be quoted only  against the following section codes in corresponding challan details:
193, 194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194G, 194H, 194I, 194J, 194LA

3)    Following approach may be referred for reporting threshold transactions in quarterly statements:

In case there is no deduction of tax in the first two quarters of a F.Y. where the prescribed rate of deduction as per Income Tax Rules is 10%. In the third quarter the threshold limit exceeds.

Approach 1:

The deductor may report those transactions in the respective quarterly TDS statements with zero rate of deduction (0.0000), zero tax deducted/ deposited (0.00) and amount paid in the respective quarters with threshold flag. The deductor will mention the prescribed rate of deduction, the amount paid in the third quarter, tax deducted/ deposited (deductee) on the total amount paid till that quarter. The same is represented as follows:

Pertaining to quarter Reporting Quarter PAN Rate of deduction Date of payment* Amount paid (Rs.) Date of deduc-tion Amount deducted (Rs.) Amount deposited (Rs.) Reason for non deduction /lower deduction
Q1 Q1 PAN1 0 Q1 1,00,000 0 0 Threshold flag Y present
Q2 Q2 PAN1 0 Q2 1,00,000 0 0 Threshold flag Y present
Q3 Q3 PAN1 30 Q3 1,00,000 Q3 30,000.00 30,000.00 No flag present

*The deductor must report the actual date of payment irrespective of the manner of reporting

Approach 2: 

The deductor may report all transactions in the quarter in which the threshold has exceeded, represented as follows: 

Pertaining to quarter Reporting Quarter PAN Rate of deduction Date of payment* Amount paid (Rs.) Date of deduction Amount deducted (Rs.) Amount deposited (Rs.) Reason for non deduction /lower deduction
Q1 Q3 PAN1 0.0000 Q1 1,00,000 0 0 Threshold flag Y present
Q2 Q3 PAN1 0.0000 Q2 1,00,000 0 0 Threshold flag Y present
Q3 Q3 PAN1 30.0000 Q3 1,00,000 Q3 30,000.00 30,000.00 No flag present

*The deductor must report the actual date of payment irrespective of the manner of reporting

Approach 3: 

The deductor may report all transactions in the quarter in which the threshold has exceeded, represented as follows: 

Pertaining to quarter Reporting Quarter PAN Rate of deduction Date of payment* Amount paid (Rs.) Date of deduction Amount deducted (Rs.) Amount deposited (Rs.) Reason for non deduction /lower deduction
Q1 Q3 PAN1 10.0000 Q1 1,00,000 Q3 10,000.00 10,000.00 Threshold flag Y present
Q2 Q3 PAN1 10.0000 Q2 1,00,000 Q3 10,000.00 10,000.00 Threshold flag Y present
Q3 Q3 PAN1 10.0000 Q3 1,00,000 Q3 10,000.00 10,000.00 No flag present

*The deductor must report the actual date of payment irrespective of the manner of reporting

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8 thoughts on “Guidelines for reporting TDS transactions not exceeding / exceeding threshold limit in quarterly TDS statements

  1. mohapatraasish

    what flag to be used in the 26q return for the financial year2013-14 for payment made to transporter.

    Reply
    1. TDSMAN Post author

      Dear Sir,

      While entering the Transporters deductee you have to select T remarks from the remarks selection box given in the software. Do contact us on 033 22623535 for further clarification.

      Reply
  2. jaseem

    whether we need to pay interest, if we give actual date of payment?

    Q: Rent for a month is 4500/-,due/payment date of rent is 5th of the next month.From October on wards rent was increased to 45000/-(extra space was taken for rent).From which date you have to deduct tds & from which date interest has to be paid & rate(1/1.5) for the rent from April to September ? Date of payment of tax is 17th January 2013.

    Reply
  3. Madhuri

    We are following 3rd approach ,but still getting defaults in TDS Return.

    So confused. how to avoid defaults?

    Reply
  4. amit chawan

    Sir, I followed approach 3 for below threshold limit flag Y for form 26Q for F.Y. 2014-15 for the 4th Quarter. Even though late deduction interest default notice shown at tdscpc site.

    Reply
  5. raj

    Sir, I also followed approach 3 for below threshold limit flag Y for form 26Q for F.Y. 2014-15 for the 4th Quarter. and late deduction interest default notice shown at tdscpc site.Below threshold payments becomes liable to TDS once threshold limit crosses.till then not. Once threshold limit crossed TDS is applicable on payment made earlier and remained below threshold limit too. So, TDS applied to whole amount. But in such case, TDS deducted now on payment made earlier considered by cpctds as late deduction. But TDS was not deductible at all at that stage…………

    Reply

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