For the different payment types, as per applicability, standard TDS rates are specified. Under certain provisions of the Act, there could be deviation from this standard deduction rate. The ‘Remarks’ column in the TDS Return is used when; either higher or lower deduction is applicable. If standard rate is being used, the ‘Remarks’ column normally does not apply. This article explains the usage of the ‘Remarks’ column in TDS Returns.
Some of the most commonly reasons where ‘Remarks’ is used, is summarized as under:
| PARTICULARS | CODE | WHETHER PAN MANDATORY |
| In case of lower / no deduction based on Certificate u/s 197 issued by the IT Department to eligible deductors. | A | YES |
| In case of no deduction on account of declaration under section 197A. (Allowed only for section 194, 194A, 194EE, 193, 194DA & 192A) | B | YES |
| Higher Rate of TDS as may be applicable due to due to non-availability of PAN | C | NO |
| In case of payment to Transporters under Section 194C, TDS is exempted on fulfilling certain specified conditions. | T | YES |
| Transaction where tax has not been deducted, as amount paid/credited to the vendor/party has not exceeded the threshold limit. This may be reported with ‘no-deduction’ with the ‘Y’ code in the Remarks. | Y | YES |
Apart from the above there are other applicable reasons for lower / higher TDS where it needs to be reported in the ‘Remarks’ column.
For each of the TDS Returns (Forms 24Q, 26Q & 27Q) and TCS Return (Form 27EQ), the applicable ‘Remarks’ is summarized below:
| PARTICULARS | CODE |
| Form 24Q – Reasons for ‘Lower / Higher / No Deduction’ | |
| In case of lower deduction on account of certificate under Section 197 | A |
| In case of no deduction on account of certificate under Section 197A | B |
| Higher Rate of TDS as may be applicable due to due to non-availability of PAN | C |
| PARTICULARS | CODE |
| Form 26Q – Reasons for ‘Lower / Higher / No Deduction’ | |
| In case of lower deduction/no deduction on account of certificate under Section 197 | A |
| In case of no deduction on account of declaration under section 197A. (Allowed only for section 194, 194A, 194EE, 193, 194DA & 192A) | B |
| Higher Rate of TDS as may be applicable due to due to non-availability of PAN | C |
| No/Lower deduction on payment made on account of notification issued u/sub-sec(5) – sec194A | D |
| No deduction on payment being made to a person | E |
| No deduction/lower deduction on account of notification issued under second provision to section 194N | M |
| No deduction-clause(iii, iv or v)-Section 194N | N |
| No deduction as per provisions of sub-section(2A) – section 194LBA | O |
| No deduction – payment of dividend made to a business trust | P |
| No deduction – payment made to an entity referred to in clse (x) of sub-sec (3) of sec 194A | Q |
| Deduction on Interest Income-Senior Citizens | R |
| Software Providers/Section 194Q-no deduction | S |
| In case of payment to Transporters under Section 194C, TDS is exempted on fulfilling certain specified conditions. | T |
| Higher rate in view of sec 206AB for non-filing of return | U |
| Transaction where tax has not been deducted, as amount paid/credited to the vendor/party has not exceeded the threshold limit. This may be reported with ‘no-deduction’ with the ‘Y’ code in the Remarks. | Y |
| No deduction u/s 197A (1F) | Z |
| PARTICULARS | CODE |
| Form 27Q – Reasons for ‘Lower / Higher / No Deduction’ | |
|
In case of lower deduction/no deduction on account of certificate under Section 197 |
A |
| In case of no deduction on account of declaration under Section 197A | B |
| Higher Rate of TDS as may be applicable due to due to non-availability of PAN | C |
| No deduction is in view of clause(a) or clause(b) of sub-section(1D) of section 197A | G |
| No deduction – sub-section(1A) of section 196D | H |
| No deduction – sub-section(2) of section 196D | I |
| Higher rate in view of section 206AB for non-filing of return | J |
| No deduction/lower deduction on account of notification issued under second provison to section 194N | M |
| No deduction-clause(iii, iv or v)-Section 194N | N |
| No deduction as per provisions of sub-section(2A) – section 194LBA | O |
| Software Providers | S |
| Transaction where tax not being deducted to their vendor/party has not exceeded the threshold limit | Y |
| PARTICULARS | CODE |
| Form 27EQ (TCS) – Reasons for ‘Lower / Higher / No Deduction’ | |
| In case of lower Collection as per Section 206C (9) | A |
| Non Collection as per Section 206C (1A) | B |
| Higher Rate of TCS as may be applicable due to due to non-availability of PAN | C |
| Remittance is less than Rs. 7 lacs | D |
| TCS already collected | E |
| TDS by Buyer / Sale to Govt. & others as specified | F |
| TDS by Buyer on transaction | G |
| Sale to Govt. & others as specified | H |
| Higher rate in view of section 206CCA | I |
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