Section 193- TDS on Interest on Securities

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TDS shall be deducted on interest paid on securities by the interest payer.

  1. Time of Deduction- TDS to be deducted at the time of credit or payment, whichever is earlier.
  2. Deductee- The interest receiver needs to be a Resident
  3. TDS Rate- TDS at a flat rate of 10% shall be applicable.

If PAN is not furnished, then tax to be deducted at a higher rate

  1. Meaning of Interest on Securities-

a. Interest on any security of Central Government or State Government

b. Interest on debentures or

c. Interest on other securities for money issued by or on behalf of a local authority or a company or a corporation established by a Central, State or Provincial Act.

5. Cases when TDS shall not be deducted-

a. Interest payable to Insurance companies

b. Interest paid by widely held company (where interest amount is not more than Rs. 5,000) subject to certain conditions

c. Any interest payable on a dematerialized security recognized by a stock exchange.

d. Any interest payable on Central Govt securities or State Govt securities.

e. Interest paid or credited on 8% saving (Taxable) Bonds 2003 issued by the Central Government (where interest amount is not more than Rs. 10,000).

f. Where a self-declaration under Form No. 15G/15H is furnished by a particular person.

g. Any payment made to New Pension System Trust

h. No deduction of tax from specified payment to notified institutions, association, or body, etc.

i. No TDS shall be deducted at source from the payments of the nature specified under section 10(23DA) received by any securitization trust.

j. Certain entities whose income is unconditionally exempt under section 10

˜Authored by – CA Anushka Saraogi˜

New FVUs Version 7.2 & 2.168 released by NSDL – Key Features

Section 192A- TDS on Payment of Accumulated PF Balance Due to an Employee

  1. Deductor: TDS to be deducted at the time of payment by trustees of Employees’ Provident Fund Scheme, 1952 or any other person authorized under the scheme to make payment of accumulated sum to employees.
  2. Applicability: TDS shall be deducted in the following situations-

a. The amount from EPF has been withdrawn before completion of continuous 5 years of service, and

b. The amount withdrawn is more than Rs 50,000.

3. TDS Rate: TDS at a flat rate of 10%. PAN needs to be compulsorily quoted by the deductee; otherwise tax shall be deducted at maximum marginal rate(~36%).

4. Components on which TDS shall be deducted:

Component of lump sum payment Is this component taxable in the hands of employee not completing continuous 5 years of service? Is it subject to TDS if other conditions of section 192A are satisfied?
Employer’s Contribution Taxable under head “Salary” Subject to TDS
Interest on Employer’s Contribution Taxable under head “Salary” Subject to TDS
Employee’s Contribution Not Taxable No TDS required
Interest on Employee’s Contribution Taxable under head “Other Sources” Subject to TDS

 

  1. Exceptions:

a. The aggregate amount of EPF withdrawal is less than Rs 50,000.

b. The withdrawal has been done after continuous service of 5 years.

c. In case of a job change, the PF amount is transferred from one account PF account to another.

d. If there is a termination of employment due to employee’s ill health, completion of the project for which employee was employer, discontinuation of the employer’s business or any other reason which is beyond the control of the employee.

e. If the employee has submitted Form 15G/ Form 15H along with the PAN under section 197A.

f. If post retirement, any interest is paid on the accumulated balance not withdrawn, tax is required to be deducted as per section 194A, since there is no employer –employee relationship

 

  1. Section Codes to be entered in case of filing TDS return under Form 24Q:

a. 92A: Payments made to Govt. employees other than Union Govt. employees

b. 92B: Payments made to employees other than Govt. employees

c. 92C: Payments made to Union Govt. employees.

The TDS rates shall be the same in all the three cases above. It’s just the matter of classification of employees as per their relevant authority.

˜Authored by – CA Anushka Saraogi˜

Section 194B: TDS on Winnings from Horse Races

TDS / TCS Compliances for October 2021

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7th October 2021 – Due date for TDS / TCS payment for deductions / collections during September 2021

15th October 2021 – Due date of filing  TCS Return for Quarter 2 of Financial Year 2021-2022

30th October 2021 – Due date of issuing TCS certificate for Quarter 2 of Financial Year 2021-2022

31st October 2021 – Due date of filing TDS Return for Quarter 2 of Financial Year 2021-2022

*Please ensure timely compliance to avoid interest and/or penalties

Use TDSMAN Software to file seamless & error-free TDS/TCS returns, without any professional help.

New FVUs Version 7.2 & 2.168 released by NSDL – Key Features

New versions of File Validation Utilities (FVUs) for e-TDS/TCS statements are released today (October 1, 2021).

The key features of this FVU is summarized below:

File Validation Utility (FVU):

  • FVU Version 7.2 – Applicable for quarterly e-TDS/TCS statement pertaining to FY 2010-11 onwards.
  • FVU Version 2.168 – Applicable for quarterly e-TDS/TCS statements from FY 2007-08 up to FY 2009-10.

Features of the FVUs are as below:

  • Addition of new Section 194P for Form 24Q

  194P: Deduction of tax in case of specified senior citizens

–  Applicable for regular and correction statements pertaining to FY 2021-22

  • Addition of new Section 196D(1A) for Form 27Q

  196D(1A): Income of specified fund from securities referred to in clause (a) of sub-section (1) of section 115AD (other than interest income referred to in section 194LD)

–  Applicable for regular and correction statements pertaining to FY 2020-21 Q3 onwards where date of payment is on or after 01/11/2020.

  • Addition of new Section 194Q Form 26Q

  194Q: Payment of certain sums for purchase of goods

–  Applicable for regular and correction statements pertaining to FY 2021-22 Q2

  • Addition of new remark values for Form 27Q
  • Addition of new remark values for Form 26Q
  • Addition of remark value in Form 27EQ
  • Change in validation related to section code 196D in Form 27Q
  • Changes in validation of section 194K of Form 24Q

(This version of FVU is applicable with effect from 1st October, 2021)

TDSMAN has been fully updated with newly released File Validation Utilities

To update TDSMAN – Click on: Utilities > Update Software

Click here to read the original document 

Download File Validation Utility (FVU) version 7.2

Download File Validation Utility (FVU) version 2.168