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1. TDS And TCS Under Income Tax Presented By: Group 1 Bhoomiparba Malla Desalin Sethy Meghana Mohapatra Prabhat Kumar Dalai Pradyumna Dipa Rojalin Samal Rakesh Kumar Sahu Sumit Kumar Agrawal Sai Sikan Patra Swagatika Samantaraya Tulasi Meher Vishal Pattanaik

2. TABLE OF CONTENTS Introduction TDS on Salary Tax Slabs and TDS applicability Section 194C, 194I, 194IA, 194 JA and JB of IT act Section 194 H, 194 LA, 194M, 194R of IT act TCS definition and example TCS Payment and return Due date for filing TDS and TCS E-TDS and TCS return Forms Default notice and penalizing sections

3. TAX DEDUCTED AT SOURCE Tax Deducted at Source (TDS) is a means of collecting income tax in India. It has been described from section 192 to 206 of the Income Tax Act. salary, commission, rent, interest, professional fees, etc . Payer Payee A Part of it Deducted Remitted to Govt. by Payer on behalf of Payee

4. As per the Income Tax Act, any Company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits . TDS has to be deducted at the rates prescribed by the tax department. The company or person that makes the payment after deducting TDS is called a DEDUCTOR and the company or person receiving the payment is called the DEDUCTEE . It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government . TDS on Income Tax described from section 192 to 206 of the Income Tax Act . Deductor and Deductee

5. PRIMARY OBJECTIVE OF TDS Tax Deducted at Source

6. NOTES FOR DEDUCTION OF TDS FOUR THINGS

7. 7 SECTION 192 OF IT ACT,1961-TDS ON SALARY “Salary” is a fixed and regular remuneration made by an employer to an employee on a periodic basis. The existence of employer-employee relationship is the absolutely essential for taxing a particular receipt under the head “salaries”. The term ‘salary’ includes both monetary payments (e.g. basic salary, DA, bonus, commission, allowances etc.) as well as nonmonetary facilities (e.g. housing accommodation, medical facility, interest-free loans etc.) Salaries also include: ( i ) Wages (ii) Annuity or pension (iii) Gratuity (iv) Fees, commission, perquisites or profits in lieu of salary (v) Advance of salary (vi) Amount transferred from unrecognized provident fund to recognized provident fund etc.

8. Who will deduct ? Any person responsible for payment of salary When will be deducted? At the time of payment of the salary What will be the rate ? Rate in force in that particular year On which amount? On the estimated salary of the year

9. Responsibility for deducting tax at source The persons are mainly- Principal Officer of a company for TDS purpose including the employer in case of private employment or an employee making payment on behalf of the employer, DDO (Drawing & Disbursing Officer), In case of Govt. Office any officer designated as such. Form 12BB to be issued to all employees on 1st April In which the employee shall have to furnish the following information: Total Gross Salary for the Financial Year Any other income The amount deposited under different tax saving schemes. After getting the declaration from the concerned employees, DDO shall have to calculate the amount of TDS on taxable income of the concerned employee

10. Example: Suppose the total TDS amount calculated is Rs 1,20,000/-. The DDO should have to deposit Rs 10,000/- every month from March to November(9 months). In December DDO shall have to ask for the evidences as declared by the employee and recalculate the TDS. Suppose the TDS recalculated as Rs 1,50,000/- . Now DDO shall have to deduct and deposit Rs 20,000/- in Dec, Jan and Feb(3 months )

11. 11 DUTIES AFTER DEDUCTION: 1. DEPOSIT OF TDS 2. FILE TDS RETURN 3. ISSUE CERTIFICATES TO THE DEDUCTEE(section 203) Month TDS – Correct Method TDS- wrong Method TDS- Wrong method MAR 10,000     APR 10,000     MAY 10,000     JUN 10,000 10,000   JUL 10,000 10,000   AUG 10,000 10,000   SEPT 10,000 10,000   OCT 10,000 10,000   NOV 10,000 10,000   DEC 20,000 10,000 50,000 JAN 20,000 10,000 50,000 FEB 20,000 70.000 50,000 TOTAL 1,50,000 1,50,000 1,50,000 Month Quarter Date of Deduction Date of deposit Date of filling TDS return Apr-Jun Q1 Date of deduction should be the date of payment 7 th  of every next month in which payment is made Note:- The Due Date for the last month (March) of the deposit will be 30 th  April 31 st  July July-Sept Q2 31 st  Oct Oct-Dec Q3 31 st  Jan Jan-Mar Q4 31 st  May

12. Income Tax Slabs for resident individuals below 60yrs of age for FY 2022-2023. OLD INCOME TAX REGIME Range of Income (Rs.) Tax Rate Up to 2,50,000 Nil 2,50,000-5,00,000 5% 5,00,000-10,00,000 20% Above 10,00,000 30%

13. (1) (2) (3) Deductions

14. (1) (2) (3) PURPOSE OF TRANSITION

15. About New Tax Regime - A new tax regime was introduced in budget 2020 wherein the tax slabs were altered and tax payers were offered concessional tax rate. But changes in income tax slab and rates were introduced in the budget 2023, to make the new tax regime more lucrative . Govt has revised the income tax slab in FY 2024-25 for the assessment year 2025-26 , while tax rate remains unchanged.  Note- The taxpayers who opted for the new tax regime could not claim major deductions like HRA, LTA, 80C, and many others. NEW INCOME TAX REGIME

16. Income Tax Slab & Rate for New Tax Regime FY 2024-25   NEW INCOME TAX REGIME Tax Slab for FY 2023-24 Tax Rate Tax Slab for FY 2024-25 Tax Rate Upto ₹ 3 lakh Nil Upto ₹ 3 lakh Nil ₹ 3 lakh - ₹ 6 lakh 5% ₹ 3 lakh - ₹ 7 lakh 5% ₹ 6 lakh - ₹ 9 lakh 10% ₹ 7 lakh - ₹ 10 lakh 10% ₹ 9 lakh - ₹ 12 lakh 15% ₹ 10 lakh - ₹ 12 lakh 15% ₹ 12 lakh - ₹ 15 lakh 20% ₹ 12 lakh - ₹ 15 lakh 20% More than 15 lakh 30% More than 15 lakh 30%

17. (1) (2) (3) Benefits of new tax regime

18. Who is responsible to deduct tax under Section 194C?

19. b. Which works contract is covered under Section 194C? Contract shall include sub-contract. “ Work” shall include — a. advertising; b. broadcasting and telecasting including production of programmes for such broadcasting or telecasting; c. carriage of goods and passengers by any mode of transport other than by railways; d. catering. e. Printing and design f. Travel agent biils g, Couriers h. Maintenance work I. Civil Costruction j. Manpower services

20. Non Applicability of Section - 194C Manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer or its associate, being a person placed similarly in relation to such customer as is the person placed in relation to the assessee u/s 40A(2)(b), but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer or associate of such customer. Purchase of goods TDS under IT act (not applicable) TDS under GST act (applicable)

21. 2) When tax cannot be deducted? Case 1: When following conditions are satisfied then tax cannot be deducted :   i . Any sum credited or paid in pursuance of any contract, the consideration for which does not exceed ₹ 30,000; and Tax point: The limit of ₹ 30,000 is on individual contract.  ii. Where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year does not exceed ₹ 1,00,000 Case 2: When following conditions are satisfied then tax cannot be deducted: a. Amount is paid or payable to a resident contractor during the course of plying, hiring or leasing goods carriage (here-in-after referred to as transport operator). b. Such operator furnishes his  Permanent Account Number (PAN)  to the payer. c. Where such contractor owns 10 or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with his PAN to the person paying or crediting such sum.   Taxpoint : Tax is not required to be deducted even if amount of payment exceeds Rs. 1,00,000/-

22. TDS applicability under section - 194C Rates of TDS U/S -194 C 1 % IN CASE OF Individuals 2% for other cases (Firm and Company etc ) Amount paid or credited during the financial year TDS Applicability Upto Rs . 30,000 No More than Rs . 30,000 in a single transaction Yes More than Rs . 1,00,000 in aggregate Yes

23. Meaning of Rent A ny payment under any lease / sub-lease / tenancy or any other agreement or arrangement for the use of any of the following -

24. Revised to threshold limit : 2.4 Lakhs (through out the year) Threshold Exemption Limit under Section 194I : Before Financial Year 2019-2020 : 1.8 Lakhs (through out the year)

25. Particulars TDS rate Renting of machinery / plant / equipment 2% Renting of land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings 10% Rate of TDS deductible u/s 194I 2% ( w.e.f 1 st oct 2024)

26. TDS is not deductible under section 194-I

27. Illustration – 1 (Sec 194I) Furnished house rent (Rs. 30,000) = House rent (Rs. 20,000) + Rent of Furniture (Rs. 10,000) TDS deducted u/s 194I TDS deducted u/s 194C

28. Illustration – 2 (Sec 194I) Security deposit If Refundable (TDS not applicable) If Non refundable (TDS applicable)

29. Any person, being a transferee , responsible for paying (other than the person referred to in section 194LA, relating to compensation in case of compulsory acquisition of property) to a resident transferor any sum by way of consideration for transfer of any immovable property being any land (other than rural agricultural land) or any building or part of a building shall be liable to deduct tax @ 1% at the time of credit of such sum to the account of the transferor, or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, are both , is less than fifty lakh rupees. The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section. . Section 194IA : TDS on Purchase of Immovable Property

30. Any person, being a transferee (other than the person referred to in section 194LA)

31. Explanation For the purposes of this section, "agricultural land" means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (b) "immovable property" means any land ( other than agricultural land ) or any building or part of a building. Parties Buyer(Transferee) Seller(Transferor) Transaction Sale of Immovable Properties Value for TDS Sale value/ Consideration / Stamp Duty Value Deductor Any Transferee (Buyer of Property) Deductee Resident transferor (Seller of Property ) Time of deduction At the time of credit sale value to the account of transferor Or At the time of payment in cash / cheque/ draft ( Whichever is earlier )

32. Land/ Building/Both Agricultural land Other IMP Rural Area Urban Area No Tax No TDS Govt Compulsory Acquired Exempt U/s 10(37) No TDS Normal Sale Govt Compulsory Acquired Consideration / SDV > 50 Lakh Seller : Resident 45(5) shall apply TDS U/S 194LA Payer/ Buyer is required to deduct TDS @1% or Higher of ( Cons. Or SDV) Amendment by Finance Act , 2022 (w.e.f. 01/04/2022)

33. Requirement of TAN No Deposit of TDS Within 30 days from the TDS month Form of TDS deposit & return 26 QB Certificate of TDS Form 16 B within 15 days from the due date of form 26 QB TDS deducted but not deposited Late fee, Interest and penalty or non filing, late filing of TDS return Consideration SDV TDS 30 L 32L No 45 L 50L @ 1%= 50,000/- 60 L 58 L @ 1%= 60,000/- 70 L 80L @ 1%= 80,000/- TDS Calculation

34. Section 194IB TDS on Rent of Property The provisions of section 194-IB were made effective from  1st June 2017 . Who is responsible to deduct tax under section 194IB of Income Tax Act, 1961? Any person, being an individual or a Hindu undivided family (not covered under section 194I), responsible for paying to a resident any income by way of rent exceeding ₹ 50,000 for a month or part of a month during the previous year, shall deduct income-tax thereon at the rates in force. For the purposes of this section, “rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or both. Rate of TDS under Section 194IB provides that tax at a rate of 5% should be deducted by the Tenant, Payer or Lessee at the time of making payment of rent to, Lesser, Landlord or Payee.

35. TDS COMPLIANCE Requirement of TAN No Deposit of TDS Within 30 days from the TDS month Form of TDS deposit & return 26 QC Certificate of TDS Form 16 C within 15 days from the due date of form 26 QC Claim of TDS Yes available (at the time of filing ITR)

36. Every person other than an individual or a HUF, who is responsible for paying to a resident any sum by way of – fees for professional services; or fees for technical services; or a ny remuneration or fees or commission, by whatever name called, other than those on which tax is deductible under section 192, to a director of a company; or royalty, In order to identify the TDS transactions which were to be deducted @ 2% or 10% section 194J is divided into two section codes - 94JA and 94JB. section code 194JA is assigned to denote deduction of tax under section 194J @ 2%. section code 194JB is assigned to denote deduction of tax under section 194J @ 10%. Section 194J

37. Rate of TDS Remarks 194JA 2% Fees for Technical Services (not being professional services), royalty for sale, distribution or exhibition of cinematographic films and call centre . 194JB 10%   Fees for professional service or royalty etc. Section Code in e-TDS return Utility for Section 194J I f the payee does not provide PAN to the deductor , TDS will be deducted @ 20%. TDS must be deducted if the payment amount in a year exceeds Rs. 30,000/-.

38. C ommission or brokerage serves as a source of income Co mmission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person. TDS on commission or brokerage includes, for services rendered (not being professional services as it is in 194J ), or for any services in the course of buying or selling of goods , or in relation to any transaction relating to any asset , valuable article or thing, except securities 194H- TDS ON COMMISSION OR BROKERAGE

39. Who cuts tds Any person( other than individuals and HUFs ) responsible for paying a resident. ( Eg -> Companies, Trusts) From FY 2020-21 , individuals and HUFs whose turnover from business is above Rs.1 crore or gross receipts from profession are above Rs.50 lakh .

40. Time and rate of deduction A t the time of credit of such income to the account of the payee or to any other account or any other account whether called suspense account or by any other name OR at the time of actual payment , whichever is earlier  RATE = 5% (If no PAN-> 20%) (LATEST BUDGET - 2% from 1 October, 2024)

41. exemptions Brokerage or commission  <= Rs.15,000 in a financial year . The employer is paying a commission to the employee ( As covered under Section 192 ) by BSNL and MTNL to their public call office franchisees.. Insurance commission and brokerage (as covered under 194D) .

42. TIME OF DEPOSITION Tax Deducted during the month of April to February is to be deposited on or before the 7th of next month . Tax Deducted in the month of March is to be deposited on or before 30th April . Eg - T ax deducted  25 April is to be deposited on or before 7th May T ax deducted  15 March is to be deposited on or before 30 April.

43. Any person acquiring immovable property (Land or building ) Under any law in force Immovable property ( other than agricultural land ) Rate- 10% Limit- 2.5 Lakhs (aggregate amount during FY ) 194LA- PAYMENT OF COMPENSATION ON ACQUISITION OF CERTAIN IMMOVABLE PROPERTY

44. Non- applicability to Sec 194R employees who receive benefits from their employers  When the recipient is a non-resident, the tax will be deducted under Section 195. When there is no business relationship, this section will not apply. TDS should not be deducted when the total value involved does not exceed Rs.20,000. This provision is not applicable to Individuals and HUFs with income from business not exceeding Rs.1 Cr. and profession not exceeding Rs.50 lakhs . Discounts and rebates will not be reduced from the sale value while calculating the value of benefits

45. 55 Tax collected at Source (Sec 206C) Tax collected at source (TCS) is the tax collected by the seller from the buyer on sale so that it can be deposited with the tax authorities. Such persons must have the Tax Collection Account Number to be able to collect TCS. Illustration: If a box of chocolates costs Rs.100, the buyer pays Rs.20 (Rs 80 + Rs 20), which is the tax collected at the point of sale. The funds are then transferred to a certain approved branch of a bank that has been authorized to accept payments. The seller is only responsible for collecting this tax from the customer and is not liable for paying it himself or herself. The tax is intended to be collected while selling items, conducting transactions, receiving a payment in cash from the buyer, or issuing a cheque or draft, whichever method is paid first.

46. 56 Goods covered under TCS provisions When the below-mentioned goods are utilised for the purpose of manufacturing, processing, or producing things, the taxes are not payable. If the same goods are utilised for trading purposes, then tax is payable. Type of Goods or transactions Rate Liquor of alcoholic nature, made for consumption by humans 1% Timber wood under a forest leased 2.5% Tendu leaves 5% Timber wood by any other mode than forest leased 2.5%

47. Goods covered under TCS provisions 57 Type of Goods or transactions Rate Forest produce other than Tendu leaves and timber 2.5% Scrap 1% Minerals like lignite, coal and iron ore 1% Purchase of Motor vehicle exceeding Rs.10 lakh 1% Parking lot, Toll Plaza and Mining and Quarrying 2%

48. Higher Rates of TCS (Sec 206CCA) Such a higher TCS rate will be the highest of the following two rates: - Two times the TCS rate mentioned in the Income Tax Act ( in the above table) - 5%

49. 59 Classification of Sellers There are some specific people or organizations who have been classified as  sellers  for tax collected at the source. No other seller of goods can collect tax at source from the buyers apart from the following list: Central Government State Government Local Authority Statutory Corporation or Authority Company registered under the Companies Act Partnership firms Co-operative Society Any person or HUF who is subjected to an  audit of accounts under IT Act

50. 60 Classification of Buyers A  buyer  is a person who obtains goods of specified nature in any sale or right to receive any such goods, by way of auction, tender or any other mode. However, the below buyers are exempted from the collection of tax at the source. In other words, TCS need not be collected from the following persons. Public sector companies Central Government State Government Embassy of High commission Consulate and other Trade Representation of a Foreign Nation Clubs such as sports clubs and social clubs Where resident buyer utilises such purchase for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power (not for trading) and gives this declaration in writing in duplicate.

51. 61 When is TCS to be Collected The seller must collect TCS at the earlier of the following two dates: When debiting the money payable by the buyer to their account in the books of accounts. Upon receipt of such money from the buyer in any mode such as cash issue of a cheque or draft. In the case of the motor vehicle sale, the TCS is collected upon receipt of money or consideration for the motor vehicle from the buyer.

52. TCS Payments All TCS amount collected by an office of the Government should be  deposited on the same day of collection. The seller deposits the TCS amount in  Challan 281   within 7 days from the last day of the month in which the tax was collected. TCS Penalities If the tax collector does not collect the tax or after collecting doesn’t pay it to the government as per the above due dates, then he will be liable to pay interest of 1% per month or a part of the month.   .

53. How to Deposit TCS T o ensure compliance with the tax regulations, sellers must deposit Tax Collected at Source using Challan 281. This can be done online and offline and must be completed within seven days from the end of the month the TCS was collected. Online Deposit : Visit the official website of the Income Tax Department. Go to the TDS/TCS section and select Challan No./ ITNS 281. C omplete the required details on the challan, including the deductee’s name, type of payment, details of the goods or services, payment mode, assessment year, TAN details, and other relevant personal information. Submit the form and proceed to make the payment online.

54. Offline Deposit: To deposit TCS offline, the seller must visit the nearest authorized bank branch. Submit the completed Challan 281 at the bank. The bank will issue a receipt once the challan is processed.

55. TCS Returns- Form 27EQ Tax collectors must file quarterly TCS returns using Form 27EQ. Any outstanding interest payments due to delays must be cleared before submitting this form. QUARTER NO. QUARTER DUE DATE 1 st Quarter April- June 15 th July 2 nd Quarter July-September 15 th October 3 rd Quarter October-December 15 th January 4 th Quarter January-March 15 th MAY

56. TCS Certificate Form 27D is the certificate issued for TCS returns filed. This certificate contains the following details: Name of the Seller and Buyer TAN of the seller PAN of both seller and buyer Total tax collected by the seller The date of collection The TCS rate applied. QUARTER NO. QUARTER DUE DATE 1 st Quarter April- June 30 th July 2 nd Quarter July-September 30 th October 3 rd Quarter October-December 30 th January 4 th Quarter January-March 30 th MAY

57. Importance of TCS Certificate The TCS certificate, known as Form 27D, is a crucial document that must be issued within 15 days of filling the quarterly return. If multiple certificates need to be issued to a particular buyer within a fiscal year, a consolidated certificate can be issued within a month of the last day of the financial year. Form 27D serves as proof of tax collected at the source and is necessary for the buyer to claim tax credits . If the certificate is misplaced, the collector can issue a duplicate, which must be duly attested, ensuring the buyer still has access to crucial tax documentation.

58. TCS Compliance Calendar The due dates for TCS payments, submissions of Form 27EQ, and issuance of Form 27D are presented in a table : Quarter Ending Due Date to Deposit TCS Due Date to Submit Form 27EQ Due Date to Generate Form 27D Jun-30 7 days from the last day of the month in which the tax was collected. Jul-15 Jul-30 Sep-30 Oct-15 Oct-30 Dec-31 Jan-15 Jan-30 Mar-31 May-15 May-30

59. E- TDS/TCS RETURNS :

60. Who is the e-Filing Administrator ? The CBDT has appointed the Director General of Income-tax (Systems) as e- Filing Administrator for the purpose of the Electronic Filing of Returns of Tax Deducted at Source Scheme,2003.

61. FURNISHING OF E-TDS/ TCS STATEMENT  Each E-TDS/ TCS statement file (Form Nos. 24Q, 26Q, 27Q or 27EQ) is to be submitted in Pen Drive or CD along with duly filled and signed Form No. 27A in physical form. Form No. 27A is the control chart containing a summary of the details in the E-TDS/TCS statement file (Form Nos. 24Q, 26Q, 27Q or 27EQ).

62. Who is required to file e-TDS return ? As per Section 206 of Income Tax Act all corporate and government deductors are compulsorily required to file their TDS return on electronic media (i.e. e-TDS returns).

63. Under what provision the e-TDS return should be filed ?

64. forms to be used for filing annual/quarterly TDS/TCS returns Form No Particulars Periodicity Form 24 Annual return of “Salaries” under Section 206 of Income Tax Act, 1961 Annual Form 26 Annual return of deduction of tax under section 206 of Income Tax Act, 1961 in respect of all payments other than “Salaries” Annual Form 27 Statement of deduction of tax from interest, dividend or any other sum payable to certain persons Quarterly Form 27E Annual return of collection of tax under section 206C of Income Tax Act, 1961 Annual Form 24Q Quarterly statement for tax deducted at source from “Salaries” Quarterly Form 26Q Quarterly statement of tax deducted at source in respect of all payments other than “Salaries” Quarterly Form 27Q Quarterly statement of deduction of tax from interest, dividend or any other sum payable to non-residents Quarterly Form 27EQ Quarterly statement of collection of tax at source

65. The Deductor is treated as an assessee in default when: A) Does not deduct TDS B)After deduction fails to deposit the whole or part of the tax Assessee in default under section 201

66. Nature of Default Short Deduction : Less amount, PAN error {Interest charged: levy of interest @ 1% for every month from the date of deduction to deducted, u/s 201(1A) } Short Payment : Challan mismatch {interest charged is 1.5% u/s 201(1A) } Interest on late deposit of TDS – 18% per annum. Late Filing of fees of TDS return (u/s 243E) : Rs. 200 per day from due date to the date of filing. Assessing officer can also levy additionl fine u/s 271H : For non-submission of TDS statement within the prescribed time (Rs.10000 to Rs.100000).

67. Penal Action u/s 271C for non-deduction or nonpayment Penalty of an amount equal to tax not deducted /paid could be imposed under section 271C : for non-deduction of TDS @100% of the TDS amount. Penalty is levied to the extent the assessing officer directs, however , total amount of penalty shall not exceed the tax in arrears.

68. Prosecution u/s 276B and 276BB Prosecution for failure to pay the tax deducted at source: If the person fails to pay credit to the Government within the prescribed time, the TDS (u/s 276B) deducted by him; The TCS (u/s 276BB) collected by him, then : he shall be punishable with rigorous imprisonment for a term with minimum tenure of 3 months or maximum 7 years.