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Some issues on Practice of TDS Law

Seminar By NIRC

By
m Pradeep Dinodia
LL.B., FCA

S.R.Dinodia & Co.


http://www.srdinodia.com
Chapter XVII
Collection & Recovery of Taxes
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TDS Ɗ Provision in Brief
Section 19 Salary

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Section 193 Ɗ Interest on Securities
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Section 194 Ɗ Dividends
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Section 194
194A
A Ɗ Interest other than ƏInterest on SecuritiesƐ
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Section 194
194B
B Ɗ Winning from Lottery or Crossword Puzzles
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Section 194
194C
C Ɗ Payment to Contractor/Sub contractors
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Section 194
194D
D Ɗ Insurance Commission

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194E
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Section 194
194EE
EE Ɗ Payment in respect of deposits under National
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Section 194
194F
F Ɗ Payment on account of Repurchase of Units by Mutual
Funds or UTI

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Section 194
194G
G Ɗ Commission etc.
etc. on the sale of Lottery Tickets

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Section 194
194H
H Ɗ Commission or Brokerage

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Section 194 I Ɗ Rent

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Section 194 J Ɗ Fees for Professional or Technical Services

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clause ƏFees for technical servicesƐ means: means: any consideration
(including any lumpsum consideration) for the rendering of any
managerial, technical or consultancy services (including the
provisions of services of technical or other personnel), but does not
include consideration for any construction, assembly, mining or like
product undertaken by the recipient or consideration which would
be income of the recipient chargeablemxunder the head ƌsalariesƍ.ƌsalariesƍ.

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Section 19£ Ɗ Obtaining a Certificate of Lower Rate from
the Assessing Officer

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However in the case of entities covered by Rule ¦ AB, the Assessing


¦AB,
Officer may issue a certificate to the recipient authoring payment of
income without deduction of tax at source.
source. The recipient may furnish
copies of such certificate to the person responsible for paying the
income for the purpose of no deduction of tax at source.
source.
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Consequences of Default
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Consequences of Default
Liability u/s 01

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++" Penalty Equal to Tax.


Tax. m¦


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Imprisonment Period 3 months to £ years and with fine. fine.

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CASE STUDY I

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CASE STUDY II

 Reimbursement of expenses actually incurred

 Service tax levied on the services rendered ± whether liable for


TDS

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CASE STUDY III

Reasonable cause - bona fide belief that ex ex--patriate salaries paid


in home countries not liable for tax in India ± No penalty u/s.
u/s. 271C
271C.

 
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CASE STUDY IV

TDS not deducted ± interest payable u/s


u/s..201(
201(1A) upto the date
payee has paid tax on his income.
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CASE STUDY V

As all income liable for TDS, though not deducted ± interest


u/s..234B
u/s 234B not chargeable.
chargeable.

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CASE STUDY VI

Section 198,
198, 199 do not determine year of chargeability to tax ± Sections
4, 5, 28,
28, 145 are charging sections and determine the year of chargeability
to tax.
tax.
Income as per method of accounting regularly followed, credit of TDS is
attached to it
it..

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CASE STUDY VII

›abells sold after the printing logo, trademark as per directions of the
customer, is a sale and not a works contract which contrary to Circular
No.. 715 dated 08/
No 08/08/
08/95 Question No.
No. 15

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CASE STUDY VIII

›anding fee and parking fee at the airport for aircraft is rent within
the definition of section 194I
194I liable for TDS
TDS..

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CASE STUDY IX

Specific provision will override the general provision ± contractors¶


payment specifically covered u/s
u/s..194C,
194C, will not be covered under general
provisions of section 194J
194J.

 
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3ach section regarding TDS under Chapter XVII deals with the particular
kind of payment to the exclusion of all other sections in this Chapter.
Chapter.
Thus, payment of any sum shall be liable for deduction of tax only under
one section

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