Group-10 CTP Presentation

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p pp

BY GROUP 10
Mehul Dhamsaniya (25)
Hiral Joshi (42)
Jyoti Lakhwani (49)
Aarti Meghrajani (62)
Annie Sukhramani (103)
Manish Vasani (116)
{ { { {
hat is the scheme of tax deduction
at source
å X (29 years) is a businessman. For the financial year
2010-11, his business income is Rs. 8,86,000. Beside,
he has received Rs. 90,000 as interest on fixed deposit
from Punjab national bank on January 31, 2011 (gross
interest earning on fixed deposit: Rs.1,00,000, less tax
deduction at source by bank: Rs. 10,000). He has
deposited Rs. 60,000 in public provident fund.
10/13/2010 Tolani institute of management studies 2

The tax computation
Business income 8,86,000
Bank Interest
90,000
Net interest received from bank
10,000
Tax deduction at source by bank
Gross interest 1,00,000

9,86,000
Gross total income
Deduction under section 80c 60,000

9,26,000
Net income
1,31,800
Tax on net income
Education cess & secondary & higher secondary 3,954

education cess
1,35,7543
Tax liability
10/13/2010 Tolani institute of management studies
Tax liability 1,35,754

10,000
Net interest paid to X 1,25,754

å @
like salary (to
resident / non-resident), payment other than salary to
residents (namely interest, dividend, rent, commission
brokerage, lottery winning, winning of races, technical /
professional fees, royalty, compensation e.t.c.) and payment
to non-residents / foreign companies.
å


å

if the recipient does not furnish his PAN to the deductor, tax will be
deducted (.E.F April 1, 2010) at the normal rate or at the rate of
20 %, which ever is higher. PAN of the deductee should be
mentioned in any correspondence & document which is exchanged
between the deductor & deductee.
U

surcharge
will be applicable in the case of TDS only when the recipient is a foreign
company and the payment / credit subject to TDS exceed Rs. 1 crore (rate
of surcharge : 2.5 % of TDS). In no other case surcharge will be applicable
for TDS purpose during the F.Y. 2010-11.

å ? !
!

E

!
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## !
$
%
# &"& #!
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%
%
# &"&(
# & '
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)
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*

*%%
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å m"
where a person, who is required to deduct tax at source, does not
deduct, or after deducting fail to pay, the whole or any part of tax, as
required by the act, then such person will be deemed to be an
assessee in default in respect of such tax under sec 201 (1). He will
be liable for payment of tax, interest, penalty & prosecution.

U An order under section 201 (1) for failure to deduct the whole or
any part of the tax as required under the act, if the deductee is a
resident tax payer, shall be passed within the timeʹlimit given
below:
1. In case TDS statement is filed by the deductor ʹ within 2 year from
the end of the financial year in which statement is filed U/S 200.
2. In case no such statement is filedʹ within 4 year from the end of
the financial year in which payment is made or credit is given.
However an order pertaining to the F.Y 2007-08 (for earlier year )

can be passed at any time up to march 31, 2011.

HEN AND HO TAX IS DEDUCTED AT SOURCE FROM
SALARY (SEC. 192)
ho is payer Employer
ho is recipient Employee

Payment covered Taxable salary of employee
At what time tax is to be deducted at source At the time of payment
Max. amount which can be paid without tax The amount of exemption limit (i.e. Rs.
deduction 1,90,000 / Rs. 2,40,000 / Rs.1,60, 000 for the
A.Y 2010-11)
Rate of tax deduction at source Normal rate applicable to an individual
hen the provision are not applicable ----
Is it possible to get the payment without tax The employee can make an application in
deduction or with lower tax deduction form No. 13 to the assessing officer to get a
certificate of lower tax deduction or no tax
deduction.
å The employer may, at the time of deducting tax at source, increase or
decrease the amount to be deducted for the purpose of adjusting any
previous deficiency or excess deduction.
U # $
! $
At the time of
deducting tax at source, the person responsible for paying salary should
keep following points in consideration:
U ? ?@ %&'(%% No tax is required to be deducted at source

unless the estimated salary exceeds exemption limit. (i.e. Rs.1,90,000 /
Rs. 2,40,000 / Rs. 1,60,000) during the F.Y. 2010-11.

U &)?*?' +((&,+'m? Incurring actual expenditure on
payment of rent is a pre-requisite for claiming deduction U/S 10
(13A). The employee should submit a written statement to the
employer pinpointing rent paid by him, name of the landlord, and
the address of the property taken on rent along with rent receipt
given by the landlord.
U If House rent allowance is Rs. 3,000 p.m (or less than that), the
employer will give exemption on the basis of a declaration given
by the employee (no need to submit rent receipt). This
concession is only for the purpose of TDS & not for regular
assessment.

å & ?*+((&,+'m?!@?*-)%% ? Exemption available U/S
10 in respect of other allowances, will be provided by the employer.
The value of perquisites by the way of free residential accommodation
& other perquisites will be determined under rule 3 & should be taken
into account for computing taxable salary.
å &'+ %&'. ?@(& ???)m %.(?)/01 The

employer should not give any deduction in respect of donation given
by employee to a notified public charitable institute. The tax relief
admissible U/S 80G in respect of such donations will have to be
claimed by the employee at the time of finalization of his assessment.

å & ?*?)m %&' The employer should also take into
consideration amount deductible U/S 80C, 80CCC, 80CCD, 80CCF,
80D, 80DD, 80E, 80 GG & 80 U.
å + ?)m %.(? The total salary should be round off to
the nearest multiple of Rs.10, ignoring the fraction. On the
estimated taxable salary, tax during the financial year 2009-10 is
to be calculated at the rates as mentioned on pg. 869

Tax deduction U/S 192 in some special cases
å &, &?)m + ,?'+@?*&'%?@(& ?.
&*? +'&'??@(& ?*

Tax will be deducted on the aggregate salary by one of the employer.
å *?(%?)/02
This facility is available only if the employer is government or
public sector undertaking or company, co-operative society,
local authority, university, institution or association or body.

å m+'?@(& ?*?)m + %'*?@?m && ?*%'m&?
&?@(& ??
1. The employee may or may not declare his other incomes to the
employer.
2. If the employee wants to declare his other incomes to the employer,

then such information should be given on a plain paper.
3. The employee may declare details of his other incomes and tax
deducted there on by others.
If such information is not submitted to employer by

employee, then employer cannot take into consideration
other incomes of the employee.

å m+' ??@(& ?*@+ + &'@?*-)%% ? ʹ
Sub - section (1A) provides that the person responsible for paying any
income in the nature of perquisites (not provided for by way of monetary
payment) referred to in section 17 (2), may pay at his option, tax on the
whole (or part) of such income without making any deduction from salary
payable to employee.
å For this purpose, tax shall be determined at the average of income ʹ

tax computed on the basis of the tax so paid by employer is not
taxable in the hands of the employee as ͞perquisite͟.

Particulars of perquisite & profit in lieu of salary to
be given to employee [sec 192( 2c)]
å Any person responsible for paying salary shall furnish to

the person who receives salary a statement giving
particulars of perquisites or profits in lieu of salary
provided to him in form 12 BA (if salary exceeds
Rs.1,50,000).

HEN & HO TAX IS TO BE DEDUCTED AT SOURCE
FROM INTEREST ON SECURITIES (SEC. 193)
ho is payer Payer of interest on securities.
ho is recipient A resident person holding securities.
Payment covered Interest on securities.
At what time tax is to be deducted at source At the time of payment or at the time of
credit, whichever is earlier.
Max. amount which can be paid without tax ----

deduction
Rate of tax deduction at source For the financial year 2009-10, TDS rate is 10
% (no surcharge, education cess, e.t.c.)
hen the provision are not applicable Interest on central / state government
securities.
Is it possible to get the payment without tax Application in form no. 13.
deduction or with lower tax deduction
å

#3 $

a) Debenture issued by any co-operative society or any
other institution or authority or a public sector company
notified by the central government.
b) Any security of central / state government. [however
from June 1, 2007, interest exceeding Rs. 10,000 payble
during the financial year on 8% saving bonds, 2003 (relief
bonds)].
c) Securities beneficial owned by LIC of India or general
insurance cooperation of India or to any other four
companies formed by virtue of the scheme framed under
section 16(1) of the general insurance business act, 1972
or any other insurer and
d) Any listed Demat securities. ( .E.F June 1, 2008 )
å $ At the time of payment or at
the time of credit to the account of the payee or
transfer to interest payable account or suspense
account, whichever comes earlier.

å , $

å Application to assessing officer in form No. 13
å Declaration to the payer in form no. 15 G
å Debenture interest up to Rs. 2,500 ʹ it is not necessary to deduct tax at
source from any interest on debenture paid to an individual who is resident
in India if the following conditions are fulfilled.
a) The debentures have been issued by a company in which the public

are substantially interested.
b) The debenture are listed in a recognized stock exchange in India;
c) The interest is paid by the company by an account payee cheque; and

d) The aggregate amount of interest paid or likely to be
paid by the company to the holder of the debentures
during the F.Y. does not exceed Rs. 2,500.
å Deep discount bond ʹ Tax is deductible at the time of

redemption.

HEN & HO TAX IS TO BE DEDUCTED AT SOURCE
FROM DIVIDENDS (SEC. 194)
ho is payer Domestic company
ho is recipient Resident shareholder
Payment covered Deemed dividend U/S 2(22)(e)
At what time tax is to be deducted at source At the time of payment
Max. amount which can be paid without tax -----

deduction
Rate of tax deduction at source 10% (no surcharges & education cess)
hen the provision are not applicable Dividends covered by section 115 - o
Is it possible to get the payment without tax Dividends covered by section 115 ʹ o,
deduction or with lower tax deduction Application in form no. 13,
10/13/2010 Declaration
Tolani institute of management studies to the payer in form no. 15G.24
HEN & HO TAX IS TO BE DEDUCTED AT SOURCE FROM
INTEREST OTHER THAN INTEREST ON SECURITIES (SEC. 194A)
ho is payer Any person paying interest other than
interest on securities
ho is recipient A Resident person
Payment covered Interest other than interest on securities
At what time tax is to be deducted at source At the time of payment or at the time of
credit, whichever is earlier.
Max. amount which can be paid without tax From June 1,2007 tax is not deductible if
deduction payment/credit does not exceed ͙.
Rate of tax deduction at source 10% (no surcharges & education cess)
hen the provision are not applicable
Is it possible to get the payment without tax As in sec 197 & 197a
å,
3 $

3#
$
No tax deduction if interest does not exceed a specified amount
From June 1,2007

Rs.
here the payer is a banking company & interest is paid or payable on 10,000
time deposit.
here the payer is a co-operative society engaged in carrying on a 10,000

banking business & interest is paid or payable on time deposit.
here the payer is post office & interest is paid or payable on notified 10,000
deposit scheme with post office (i.e. senior citizen saving scheme, 2004)
here the payer is any other person 5,000

å %
3 $
å +3

å @


Issue of certificate of tax deduction
to the recipient
p

In case of salary payment and above 12BA and 16

provision
In case of payment other than salary 16A

p

hen payer is the Same day In case of salary or insurance

government or when commission within 30 days
payment is made on behalf from the close of the
of the government financial year. Otherwise
within one month from the
end of the month
when tax is deducted by the ithin two month from last ithin the two month and
person (other than gov) date of the accounting seven of days from the last
under sec. year(i.e within 31st may) date of the accounting year
193,194A,194C,194D,194E,
194G,194H,194-
I,194J,195,196A,196B,196C
and 196D and the amount is
credit to the last date of the
accounting year.

!

p

"

p
#

Any other case ithin one week from the In case of salary or
last date of the month in insurance commission
which tax deduction is within 30 days from the
made close of the financial year.
Otherwise within one
month from the end of the
month

hen and how tax is to be deducted at
source from winnings from horse
races(sec.194BB)
$

ho is the recipient Any person
Payment covered innings from horse races
At what time tax has to be deducted at At the time of payment
source
Maximum amount which can be paid If the amount of payment is Rs 5000 or
without tax deduction less than Rs 5000
Rate of tax deduction at source 30%(no surcharge or education cess)
hen the provision are not applicable -------
Is it possible to get the payment without Not possible
tax deduction or with lower tax
deduction
when and how tax is to be deducted at
source from payment to contractors or
sub-contractors(sec. 194C)

ho is the recipient A resident contractor(contractor includes
sub-contractor)
Rate of tax deduction at source 1% if recipient is an individual/HUF,
otherwise 2%
Payment covered Consideration for any ͞work contract͟
At what time tax has to be deducted at At the time of payment or the time of
source credit, whichever is earlier
Maximum amount which can be paid See Para 276.5
without tax deduction
Is it possible to get the payment without The recipient can make an application in
tax deduction or with lower tax form No 13 to the Assessing Officer to
deduction get a certificate of lower tax deduction or
10/13/2010 no tax deduction
Tolani institute of management studies 32
ho is deductor
A. The central government or state government
B. Any local authority
C. Any corporation established by or under a central, state or provincial act or
D. Any company or
E. Any co-operative society or
F. Any authority, constituted in India by or under any law, engaged either for the
purpose of dealing with and satisfying the need for housing accommodation or for
the purpose of planning, development or improvement of cities, tows and villages
or for both or
G. Any society registered under the societies registration act, or
H. Any trust or
I. Any university or institute declared to be university or
J. Any government of foreign state or foreign enterprise or any association of body
established outside India or
K. Any firm or
L. An individual or HUF or AOP OR BOI(body of person)

Addition requirement if payer is an
individual/HUF/AOP/BOI
%

%

!(&)!*
&'
Payment/credit should be It should not be exclusively No such requirement
for business purposes for personal purposes
Audit of books of account Books of account are liable Books of account are liable
to be audited under sec to be audited under sec
44AB(a)/(b) during the 44AB(a)/(b) during the
financial year immediately financial year immediately
preceding the financial year preceding the financial year
in which tax is deductible in which tax is deductible

ho is recipient(contractor)
å Before October 1, 2009 different provision were applicable in
case of contractors and sub- contractors. In order to reduce
the scope for dispute regarding classification of contract as
sub-contractor, the same TDS structure has been incorporated
for contractors and sub- contractors.
å If the recipient is transport contractor (may be an individual,

firm company or any other person) and he or it furnishes his
PAN to the deductor, tax is not deductible with effect form
October 1,2009. ͚transport operator͛ is a person who is in the
business of plying, hiring or leasing of good carriages.

Meaning of work contract͙
å Sec 194(c) is applicable in respect of consideration for carrying out any works
contract (including supply of labour for carrying out any work) for this purpose,
͞contract͟ shall include sub-contract
å ͞ork͟ as defining in sec 194C- The expression ͞work͟ shall also include the
following-
a) Advertising
b) Broadcasting and telecasting including production of programmers for such
broadcasting or telecasting;
c) Carriage of goods or passengers by any mode of transport other than by railways;
d) catering
e) 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.

Payment which are not subject to TDS under sec 194 C-
It includes carrying out any ͞work͟(where man power is

essential requirement), supply of labour and five services(i.e., advertising,
broadcasting and telecasting, carriage of goods/passengers, catering and tailor-
made manufacturing when raw material is supplied by buyer). Section 194 C is not
applicable in respect of the following contracts-
1. Other services(i.e. other than 5 service noted above) where no work is performed
by the service provider nor any labour is supplied or engaged to do any work as
part of the services so provided or the work so performed, can not be said to be
covered under sec 194C
2. ͚ork͛ shall not include manufacturing or supply product according to the
requirement or specified of customer by using raw material purchased from a
person other than such customer, as such a contract is a contract for ͚SALE͛. This
will, however, not apply to a contract which does not entail manufacture or supply
of an article or thing (e.g. a construction contract).
3. Payment to transport operators(i.e. in the course of business of plying, hiring or
leasing goods carriages) is not subject to TDS under sec 194C , if the recipient
furnishes his PAN to the payer. Deductors who make payments to transporters
without deducting TDS(as they have quoted PAN) will be required to intimate
there PAN details to the Income tax department in the prescribed format.

Other points͙.
å There is no surcharge, education cess or secondary and higher education
cess.
å If the recipient is a transport operator and he furnishes his PAN to the
payer, TDS is NIL.
å In the case of work contract being manufacturing or supplying product
according to the specification of customer (by using material purchased
from such customer), TDS shall be deducted on the invoice value excluding
the value of material purchased from such customers, if such value is
mentioned separately in the invoice. here the material component has
not been seperately mentioned in the invoice, TDS shall be deducted on
the whole of the invoice value.
å Tax is deductible on the entire consideration including service tax, if any

hen tax is not deductible..
å Petty cases-
a) The amount of any (single) sum credited or paid (or likely to be paid) to
the contractor does not exceed Rs. 20,000 (30,000 from July 1, 2010) and
b) The aggregate of the amount of such sums credited or paid ( or likely to
be credited or paid) during the financial year does not exceed Rs 50,000
( Rs. 75,000 from 1 July 2010)

hen and how tax is to be deducted at source
from insurance commission (sec 194 D)

ho is the recipient A resident person
payment covered Insurance commission

At what time tax has to be deducted at At the time of payment or at the of credit,
source whichever is earlier
Maximum amount which can be paid If the amount of payment is Rs. 20,000 or
without tax deduction less than Rs. 20,000
Rate of tax deduction at source 10% (no surcharge and education cess,etc)
hen the provisions are not applicable -

Is it possible to get the payment without tax The recipient can make an applicable in
deduction or with lower tax deduction form No.13 to the assessing officer to get a
10/13/2010 certificate
Tolani institute of management of lower tax deduction or no tax
studies 40
deduction
Adjustment not possible͙
å At the time of deducting tax from the insurance commission credited to an
agent͛s account, adjustment for any debits made in his account in respect of
excess commission credited or paid to him earlier is not permissible and income
tax must be deducted from the full amount of commission credited to this
account.

when tax is not deductible or
deductible at lower rate
å No tax is required to be deducted at source if the insurance commission credited
or paid ( or likely to be credited or paid) during the financial year does not exceed
Rs. 5,000( 20,000 from July 1 2010)
å The person receiving insurance commission can make an application in form No 13

when and how tax is deductible at source from payment to non-
resident sportsmen or sport associations(sec 194 E)

+

&
ho is the recipient non-resident sports man/sports association
payment covered Payment to non-resident sports man/sports

association
At what time tax has to be deducted at source At the time of payment or at the of credit,
whichever is earlier
Maximum amount which can be paid without nil

tax deduction
Rate of tax deduction at source 10%
hen the provisions are not applicable -

Is it possible to get the payment without tax No provision
,

1. Non ʹresident foreign citizen Income is by way of-
sportsmen(including sportsmen) a) Participation in India in any game
(other than card game or gambling
etc)
b) Advertisement or
c) Contribution of articles relating to any
game or sport in India in newspaper,
magazines or journals
2 Non-resident sports association or Any amount guaranteed to be paid or
institution payable in relation to any game(but other
than card game, etc) or sport played in
India

hen and how tax is deductible from payments in respected of national
saving scheme (sec 194EE)
(
payment covered Payment (principal

+interest) out of national saving scheme,1987
At what time tax has to be deducted at source At the time of payment
Maximum amount which can be paid without If the amount of payment is Rs 2,500 or less
tax deduction than Rs 2,500
Rate of tax deduction at source 20%(no surcharge and education cess)
hen the provisions are not applicable The payment is made to legal heirs of the
deceased
Is it possible to get the payment without tax No provision
deduction
10/13/2010 or with lower tax deduction
The person responsible for paying any amount(i.e principal and interest)
out of National saving scheme, 1987 should deducted tax at source. It may
be noted that the payment out of National saving scheme, 1992( which
was eligible for the benefit of section 80L and 88) is not subject to tax
deduction at source.

$

1. amount payment or aggregate amount of payment in financial year is less
than 2,500, no tax is deducted
2. here the payment is made to the heirs of the deceased
assesses(depositor), no tax is deducted at sources.

{ { {
Tolani institute of

management studies 47
# '*
ho is the recipient Unit holder under sec 80CCB
Payment covered Payment on account of repurchase of
units-80CCB
At what time tax has to be At the time of payment
deducted at source
Maximum amount that can be Nil

paid without deduction
Rate of TDS 20% (excluding surcharge and education
cess)
hen provision not applicable _
Is it possible to get the No provision
payment at lower/no tax
deduction
{ { { 48

Tolani institute of management studies

{ { { 49

+
Payment covered Commission on sale of lottery tickets
At what time tax has to be At the time of payment or at he time of

deducted at source credit whichever is earlier
Maximum amount that can be 1000 or less than 1000

cess)
Is it possible to get the The recipient can make an application ʹ
payment at lower/no tax form no.13 to get a certificate of
deduction lower/no TDS
50
{ { {

{ { {
51

Payment is received for the services rendered

(except the service of professionals like doctors etc)
It does not include insurance commission
Indirect payment (comm. retained by the agent)

Here the principal/consignor has to deposit the tax
deductible on the amount of commission income
{ { {
52

& +
'$
+ %
ho is the recipient Any resident person
Payment covered Commission or brokerage (except
insurance comm)
At what time tax has to be At the time of payment or at the time of
Maximum amount that can be Rs.5000 or less than Rs.5000

cess)
payment at lower/no
tax form no.13 to get a certificate of 53
deduction
{ { { lower/no TDS

Rent:-payment is made under any lease, sub-lease, tenancy or
any other agreement or arrangement.
Payment is made either for use of any land and

building(including factory building)
It is also applicable in respect of rent paid or payable of

machinery plant equipment, furniture or fittings
Immaterial whether or not such building or asset is owned by

the person to whom the rent is paid.
No tax deduction if the payee is government/local authority.

{ { { 54
-
' $
% .
ho is the recipient Any resident person
Payment covered Rent
At what time tax has to be At the time of payment or at the time of

Maximum amount that can be If the payment during the financial year
paid without deduction is Rs.180000 or less than Rs.180000
Rate of TDS 2% for use of any plant/machinery and
10% in case of land and building
hen provision not applicable Certificate under form no.13
payment at
{ { {
lower/no tax form no.13 to get a

certificate of
55
deduction lower/no TDS

!"#$%&

# &
È The expression ͞professional services͟ has been
defined to mean services rendered by a person in
the course of carrying on legal, medical, engineering
and architectural profession or the profession of
accountancy or technical consultancy or interior
decoration or advertising(i.e. models, artists,
photographers providing services to an advertising
agency) or such other profession as is notified by the
board for the purposes of section 44AA [i.e.
authorized representative, film artist or company
secretary or information technology]
È The expression ͞fess for technical services͟
means any consideration for rendering any
managerial, technical or consultancy
services. It does not include (a)
consideration for any construction,
assembly, or like projects, (b) consideration
for any service provided by machines or
robots, and (c) salary payment.

-
&'.$ &
&
&
/
/
(
&
& /
$

$ /
#

$ *

$ 0/12222
0/12222
- ./

0/12222 /
0 23-
/.

-
./ 4

/
5

*

+
$ $
, /1
$

È Tax shall be deducted at the time of credit of such
sum to the account of the payee or at the time of
payment thereon in cash or by issue of a cheque
or draft or by any other mode, whichever is
earlier.
È here any such sum is credited to any account,
whether called͟ Suspense account͟ or by any
other name, in the books of accounts of the
person liable to pay such sum, such credit shall be
deemed to be credit of such sum to the account
of the payee.

È Any fees paid through regular banking channels
to any chartered accountant, lawyer, advocate
or solicitor who is resident in India by the non-
resident who do not have any agent or business
connection or permanent establishment in
India may not be subject to provisions of tax
deduction at source under section 194J ʹ
Circular No.726,dated October 16, 1995.

(
(6
È The services rendered by hospitals to various patient are
primarily medical services and, therefore, provisions of
section 194J are applicable on payments made by Third
Party Administrators(TPA͛s) to hospitals etc. Further for
invoking provisions of section 194J, there is no stipulation
that the professional services have to be necessarily
rendered to the person who makes payment to hospital.
Therefore TPA͛s who are making payment on behalf of
insurance companies to hospitals for settlement of
medical/insurance claims, etc., under various schemes
including cashless schemes, are liable to deduct tax at
source under section 194J ʹ Circular No. 8/2009, dated
November
10/13/2010
24, 2009.Tolani institute of management studies 63

'

(

) '
!"#$&

&

%
- .
/

(
7
&

& &

% -
.
/
$

$ /
#

$ *

$ 0/22222 0/22222
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822/
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$ 5
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$ $ !
$
/
È No tax is deductible from dividend covered by
section 115-O.
È Tax at source should not be deducted or should
be deducted at lower rate, as the case may be,
where the recipient has made an application to
the assessing officer and obtained a certificate
to that effect.
È In the case of interest paid by the government
or public sector bank/financial institution within
the meaning of section10(23D), tax shall be
deducted only at the time of payment.
È No tax is deductible in respect of interest paid or
credited by an offshore banking unit on deposits
made(or borrowings given) after march 31, 2005 by a
person who is non-resident in India.
È The person making the remittance to a non-resident is
required to furnish in digital mode an understanding
in form No. 15CA, he will have to obtain a certificate
from a chartered accountant in form no. 15CB. The
purpose of the undertaking and the certificate is to
effectively collect taxes(by way of TDS under section
195) at the stage when the remittance is made, as it
may not be possible to recover the tax at a later stage
from the non-residents.

)

+

"#,)

È hen any income is payable in respect of units
referred to in section 115AB or by way of long term
capital gain arising from the transfer of such units to
an Offshore fund, the person responsible for making
the payment shall, at the time of credit of such
income to the account of the payee or at the time of
payment thereof in cash or by the issue of a cheque
or draft or by any other mode, whichever is earlier,
deduct income-tax thereon at the rate of 10
percent.
hen tax is deductible from income or long term
capital gain from foreign currency bonds / Globle
depository receipts (sec 196C)

&

;p0&
ho is the recipient A non-resident person
Payment covered Income /long term capital gain from
GDR/bonds
At what time tax has to be deducted at At the time of payment or at the time of
source credit, whichever is earlier
Maximum amount which can be paid -
hen the provisions are not applicable Dividend referred to in sec 115O
Is it possible to get the payment without No provision
tax deduction or with lower taxTolani
10/13/2010
deduction
institute of management studies 74
hen tax is deductible at source from income of
Foreign Institutional Investors from securities(sec 196D)

p
ho is the recipient Foreign Institutional Investors
payment covered income in respect of securities referred to

in sec 115AD
At what time tax has to be deducted at At the time of payment or at the time of
source credit whichever is earlier
Maximum amount which can be paid -

hen the provisions are not applicable Dividend referred to in sec 115-O: capital
gain arising from transfer of securities
referred to in sec 115AD
Is it possible to get the payment without No provisions
Tax deducted-To be treated as income of deductee and
available for tax credit(sec 198&199)
å Tax deducted at source is deemed as income of the deductee. Further, the same
amount is available as tax credit in the hands of deductee subject to the following
propositions
å 1. Credit for tax deducted at source and paid to the Central Government, shall be
given to the deductee for the assessment year for which some income is
assessable.
å 2. here tax has been deducted at source and paid to the Central Government
and the income is assessable over a number of years, credit for tax deducted at
source shall be allowed across those years in the same proportion in which the
income is assessable to tax.
å 3. If the income on which tax has been deducted is assessable in the hands of a
person other than the deductee, then tax credit will be given to such other person
if-
(a) the deductee files a declaration with the deductor
(b) the deductor shall keep the declaration in safe custody and reports the tax
deduction in the name of such other person in form nos..16A,26Q,etc.

Section (197)
! $


1) Tax deductible under section
192,193,194a,194c,194d,194g,194h,194-
I,194-j,194-k,194la or 195.
2) The recipient can apply Form No.13 to the
assessing officer to get certificate authorizing
the payer to deduct tax at lower or deduct no
tax as may be appropriate.
3) The certificate of lower rate shall be issued
on plain paper directly to the person
responsible for paying income, under the
advice to the applicant.

Q) How lower rate is determined
Ans) On the basis of the higher of the following
rates
1)Average rate of current year
2)Average of the average rate of preceding 3
years

Provision of section 197A
* p * , "
" -"/. "

-/1. -/44.
-"/.
Condition 1- ho Other than a Resident Other than a Resident
is recipient company or individual company or firm individual
firm
Condition 2-
hat is tax on
total of income of Nil Nil Nil Nil
the previous year
Condition 3- How The amount of The amount of The amount of The amount of
much is total of exemption exemption limit exemption limit exemption limit
income covered limit
by section
193,194A and
194EE
Notes-
1) Non-tax is deductible. If a declaration is
submitted in duplicate in the prescribed
form(form no.15H for a senior citizen and
Form no. 15G for any other person)
2) Condition 3 is not applicable up to may
31,2002
3) From April 1, 2003, no tax is deductible
under section 194 in respce of dividend
referred to in section 115-0.

Sec.206A
Furnishing of quarterly returns

regarding the details of non-
deduction of tax by certain persons

It has 2 sub-sections.
Subsection (1)
1. The person who is otherwise responsible for
deducting tax at source is a) any banking
company b) A cooperative society c) a public
company
2. It is responsible for paying to a resident interest
3. Such interest paid or payable during the
financial year does not exceed Rs.10,000 where
the payer is banking company or co-operative
society and Rs.5000 where payer is any other
person.
Sub- section (2)
1) The payer is a person other than person who
is covered in sub-section (1).
2) Such a person is responsible for paying to a
resident any income which is liable for
deduction of tax at source under section 192
to 194LA.

Sec.200A
(


å The following adjustment can be made during
the computerized processing of statement of
tax deducted at source:
a) Any arithmetical error in the statement; or
b) An incorrect claim, if such incorrect claim is
apparent from any information in the
statement, for example, in respect of rate of
deduction of tax at source where such rate is
not in accordance with the provisions of the
act.

Sec.206C
Tax collection at source

1) ho is responsible to collect tax at source
2) Meaning of seller- Seller means the central
government or any local authority or corporation or
authority established by or under a central, state or
provisional Act, or any company or firm or co-
operative society
3) Meaning of buyer
a) A public sector company, the central government, a
state government and an embassy, a High commission
legation, commission, consulate and the trade
representation of a foreign state and a club or
b) A buyer in the retail sale of such goods purchased by
him for personal use.

Q)hen tax has to be collected at source
Ans) Tax has to be collected by the seller at the
time of debiting of the amount payable by the
buyer to the account of the buyer or at the
time of receipt of such amount from the buyer
in cash or by issue of cheque/draft or by any
other mode, whichever is earlier.

How to compute tax collected at
source
, & (

Alcoholic liquor for human 1
consumption
Tendu leaves 5
Timber obtained under foreign 2.5

lease
Timber obtained by any mode 2.5
other than under a forest lease
Any other forest produce (not 2.5
being timber or tendu leaves
Scrap 1
Parking lot, toll plaza, mining and 2

quarrying(other than mining and
quarrying of mineral oil,
10/13/2010 petroleum and natural gas)
Notes:
1) Surcharge, education cess and secondary and higher
education cess
2) Meaning of Scrap- Scrap has been defined as waste and
scrap from the manufacture or mechanical working of
material which is definitely not usable as such because of
breakage, cutting up wear and other reasons
a) aste or scrap arising from packaging materials,
newspaper, old machinery scrapped etc. which cannot be
said to arise from manufacture are not covered
b) BY-product generated from the manufacturing process are
not covered as the same could be used as such
3) Buyer exempt from tax- if the income of buyer is exempt
from tax cannot be collected at source.

Percentages are applicable on
purchase price

å Goods utilized for manufacturing/ processing
is not subject to tax collection
a) No tax will be collected at source (form
no.27)
b) The manufacture and sale of country liquor is
controlled and supervised by the state excise
authority and liquor is retailed in the same
commercial form as purchased originally.

å Tax collection at lower rate
å Deposit of tax

å Issue of certificate- within a period of 1
month in which tax is collected, the person
collecting tax should issue a certificate of tax
collected in form no. 27D.
å Quarterly returns to government
å Quarterly return not possible before payment
of tax and interest

Quarterly TCS
( 7"
Company, central government or state Computer readable media in form no
government or a person who is subject to 27EQ
section 44AB report in the immediately
preceding financial year or in whose case
number of collectee in any quarterly
statement in the preceding financial year
is 50 or more
Any other person Hard copy in form No. 27EQ or computer
readable media


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10/13/2010 Tolani institute of management studies 2

Gross interest 1,00,000

Deduction under section 80c 60,000

 Education cess & secondary & higher secondary 3,954

10/13/2010 Tolani institute of management studies 4

10/13/2010 Tolani institute of management studies 5

10/13/2010 Tolani institute of management studies 6

10/13/2010 Tolani institute of management studies 7

10/13/2010 Tolani institute of management studies 8

However an order pertaining to the F.Y 2007-08 (for earlier year )

10/13/2010 Tolani institute of management studies 9

ho is recipient Employee

At what time tax is to be deducted at source At the time of payment

U ? ?@ %&'(%%  No tax is required to be deducted at source

10/13/2010 Tolani institute of management studies 11

10/13/2010 Tolani institute of management studies 12

å &'+ %&'. ?@(& ???)m %.(?)/01 The

10/13/2010 Tolani institute of management studies 13

consideration amount deductible U/S 80C, 80CCC, 80CCD, 80CCF,

80D, 80DD, 80E, 80 GG & 80 U.

å + ?)m %.(? The total salary should be round off to

the nearest multiple of Rs.10, ignoring the fraction. On the

estimated taxable salary, tax during the financial year 2009-10 is

to be calculated at the rates as mentioned on pg. 869

10/13/2010 Tolani institute of management studies 14

å &, &?)m  + ,?'+@?*&'%?@(& ?. 

&*? +'&'??@(& ?*

10/13/2010 Tolani institute of management studies 15

2. If the employee wants to declare his other incomes to the employer,

If such information is not submitted to employer by

10/13/2010 Tolani institute of management studies 16

å For this purpose, tax shall be determined at the average of income ʹ

10/13/2010 Tolani institute of management studies 17

å Any person responsible for paying salary shall furnish to

10/13/2010 Tolani institute of management studies 18

Max. amount which can be paid without tax ----

the time of credit to the account of the payee or

transfer to interest payable account or suspense

account, whichever comes earlier.

10/13/2010 Tolani institute of management studies 21

a) The debentures have been issued by a company in which the public

b) The debenture are listed in a recognized stock exchange in India;

c) The interest is paid by the company by an account payee cheque; and

10/13/2010 Tolani institute of management studies 22

paid by the company to the holder of the debentures

during the F.Y. does not exceed Rs. 2,500.

å Deep discount bond ʹ Tax is deductible at the time of

10/13/2010 Tolani institute of management studies 23

ho is recipient Resident shareholder

Payment covered Deemed dividend U/S 2(22)(e)

At what time tax is to be deducted at source At the time of payment

Max. amount which can be paid without tax -----

Payment covered Interest other than interest on securities

hen the provision are not applicable

From June 1,2007

here the payer is a co-operative society engaged in carrying on a 10,000

here the payer is any other person 5,000

10/13/2010 Tolani institute of management studies 26

10/13/2010 Tolani institute of management studies 27

In case of salary payment and above 12BA and 16

10/13/2010 Tolani institute of management studies 28

@

Deduction under section 80c 60,000

Education cess & secondary & higher secondary 3,954

ho is recipient Employee

U ? ?@ %&'(%% No tax is required to be deducted at source

å &'+ %&'. ?@(& ???)m %.(?)/01 The

å + ?)m %.(? The total salary should be round off to

å &, &?)m + ,?'+@?*&'%?@(& ?.

&? +'&'??@(& ?

ho is recipient Resident shareholder

hen the provision are not applicable

here the payer is a co-operative society engaged in carrying on a 10,000

here the payer is any other person 5,000

hen payer is the Same day In case of salary or insurance

%

ho is the recipient A resident person

hen the provisions are not applicable -

hen the provisions are not applicable -

ho is the recipient Any person

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