PAN-Aadhaar linking for TDS deduction: Deductee must verify the status Apr 06, 2024

TDS deduction: Tax Deducted at Source (TDS) plays an important role in the Indian tax system, ensuring that taxes are collected at the source of income itself. It's important to not only deduct TDS at the specified rate but also to ensure the accurate deduction based on one's PAN-Aadhaar linking status. Failing to do so can lead to higher TDS rates if the PAN is inoperative or inactive due to non-linkage with Aadhaar. As per an ET report, the TDS deductor or collector may face legal consequences and tax penalties for failing to check the dedutee's PAN status and deducting a lower TDS amount than required.

Consequences of Late Filing under TDS

A delay in providing the eTDS statement will result in a mandatory fine of ?200 per day till the return is filed. However, in this case, the total fine shall not exceed the total amount of TDS deducted for the given quarter. The late filing fee has to be paid before the filing of such an eTDS statement. If there is a failure or delay in filing the eTDS statement for more than a year or the details such as PAN, Challan and TDS amount, furnished in the statement are incorrect, there may be a penalty ranging from ?10,000 to ?1 lakh, as determined by the Assessing Officer.

What Is a TDS Certificate Different Forms 16, 16A, 16B, 16C?

What Is TDS Rate for Different Type of Payments?

TAN/TDS > TAN Registration

Income Tax dept notifies tax filing disclosure norms for TDS on crypto assets from July 1. Check details

• Jun 23, 2022
  
  

• The Income Tax Department has notified the disclosure norms for Tax Deducted at Source (TDS) for virtual digital assets (VDAs). From July 1, a TDS of 1% will be levied on any transactions exceeding Rs 10,000 in a year on crypto assets under the newly introduced Section 194S of the I-T Act.
  IT Department’s Central Board of Direct Taxes (CBDT) on June 21 notified of the changes in rules pertaining to filings of TDS returns in Form 26QE and Form 16E.
  CBDT clarified that TDS collected under Section 194S shall be deposited within 30 days of the month in which the deduction is made. This will reflect in challah-cum-statement Form 26QE, it added.
  Nangia Andersen LLP Partner Neeraj Agarwal told PTI that to furnish Form 26QE, taxpayers would be required to mention the date of transfer of VDAs, value of consideration, mode of consideration, whether cash or kind or in exchange of another VDA etc.

Finance Ministry to clarify doubts on applicability of TDS on perks received in business, profession

May 19, 2022

The finance ministry will clarify doubts on the applicability of new TDS provision regarding benefits or perquisites received in a business or profession, a senior tax official said on Wednesday. Joint Secretary in the finance ministry Kamlesh C Varshney said that such benefits and perquisites are income and were always taxable whether received in cash or kind. The Budget 2022-23 brought in the provision of tax deducted at source (TDS) on such income to check tax revenue leakage.

Rate of TDS on virtual digital assets shall be 1 per cent, clarifies government

• Jun 09, 2022
  
  

• The government in a late evening circular, clarified that the rate of TDS on Virtual Digital Assets continues to be 1 per cent, debunking earlier media reports that rate of TDS on Virtual Digital Assets(VDA) has been reduced to 0.1%. The 1% TDS is set to be applicable starting July 1 and has been the key reason for a drastic drop in volumes on Indian crypto exchanges, worsened by the global crypto crash. Earlier in the day, media reports mentioned that the TDS rate for virtual digital assets has been dropped to 0.1% from 1% as announced earlier in the budget. However, after the change was noticed by many the website updated the document rectifying the error. "Some media reports have come to the notice of CBDT claiming that the rate of TDS on Virtual Digital Assets(VDA) has been reduced to 0.1%. It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1%, " read the official clarification

Tweaking of TDS provisions for online gaming likely to check tax evasion

• Nov 16, 2022
• The government is considering tightening the Tax Deducted at Source (TDS) framework for the online gaming sector to ensure that a better audit trail can be established for the money spent and earned from such activities and check evasion. Also, given the buoyancy in tax collections, the budget target for the next fiscal (2023-24) is likely to be higher, Central Board of Direct Taxes (CBDT) chairman Nitin Gupta said on Tuesday. "TDS provision needs a tweak for better audit trail," Gupta said on the sidelines of the inauguration of Taxpayers Lounge at India International Trade Fair (IITF).
  

10% TDS on benefits and shares given to directors

• Jun 18, 2022

• Allotment of shares to directors, providing cars to them, and a sponsored business trip or conference by a company will attract 10% tax deducted at source (TDS) from July 1.The Central Board of Direct Taxes (CBDT) on Thursday issued a detailed guidelines on deduction of tax at source under Section 194R of the Income Tax Act. It requires deduction of TDS at the rate of 10% by any person providing any benefit or perquisite, exceeding ?20,000 in a year to a resident.

  
  
  

How TDS on crypto, virtual digital assets will work from July 1, 2022

• Jun 24, 2022
  
  

• The Central Board of Direct Taxes (CBDT) issued a circular on June 22, 2022 explaining how tax will be deducted on transfer of virtual digital assets (VDA) and cryptocurrencies. The new rules of TDS on VDA and crypto will come into effect from July 1, 2022. What does the law on TDS on VDA, crypto say?
  As per the new law, the purchaser of a virtual digital assets (VDA) is required to deduct 1% of the amount paid to the seller ( resident Indian) as income tax deducted at source (TDS). The tax is required to be deducted at the time of credit of amount or at the time of payment to the resident individual, whichever is earlier. The tax will be deducted only if the amount paid exceeds the specified limit, stated CBDT.
  Chartered Accountant Naveen Wadhwa, DGM, Taxmann.com says, "Effective from July 1, 2022, any person (resident individual, non-resident individual or Exchange) making payment to resident individual at the time of buying crypto, VDA or NFT (as notified by the govt), will be required to deduct TDS on the amount paid at the rate of 1%.

Banks to move government on TDS on loan waivers

• Jun 28, 2022

Banks will soon move the government as they find themselves caught in the tax net while settling and rejigging loans to give distressed borrowers a second chance. Slices of loans waived to lessen the strain on defaulting borrowers are being interpreted as 'benefits' that lenders are passing on to borrowers under the new provisions the government has come out on tax deducted at source (TDS). Even though there is no transfer of cash from the bank to the borrower, the extent of haircuts taken by lenders is imputed as 'income' for the borrower.

• Jun 29, 2022
  
  

• Crypto trading is going to be difficult in India from next month. The 1% TDS rule for cryptocurrency and virtual digital assets (VDAs) transactions will come into effect from the 1st of July 2022. The Central Board of Direct Taxes (CBDT) recently released guidelines explaining who will be responsible for deducting TDS in different types of transactions.

TDS on crypto, VDAs: CBDT issues new circular on peer to peer transactions

• Jun 30, 2022

• The Central Board of Direct Taxes (CBDT) given clarification regarding how the tax will be deducted (TDS) on peer-to-peer transactions related to buying/selling of Virtual Digital Assets (VDAs) and crypto under section 194S of the Income-tax Act, 1961. Peer-to-peer transactions are those transactions where buying and selling have taken place without the involvement of a third party (E.g., an exchange).
  As per the latest circular issued on June 28, 2022, "According to section 194S of the Act, any person who is responsible for paying to any resident any sum by way of consideration for transfer of VDA is required to deduct tax. Thus, in a peer-to-peer (i.e., buyer to seller without going through an Exchange) transaction, the buyer (i.e., person paying the consideration) is required to deduct tax under section 194S of the Act."

  
  
  

TDS on large loan waivers likely to go

Aug 05, 2022

The faceless authority has suggested a host of changes in the assessment process following conflicts and practical difficulties raised by taxpayers since the new regime was introduced. On August 3,2022 the National Faceless Assessment Centre issued a set of standard operating procedures (SOPs) to address several anomalies in the regime. The faceless centre, constituted by the Central Board of Direct Taxes, is the nodal authority and works as an interface for the faceless regime. Under the new SOP, an assessing officer will propose computation of income and loss after considering all aspects — differences and variations in the tax addition made by the department and responses submitted by the assesses — before passing the final order in the case.

Banks approach CBDT for clarity on new TDS norm

• Aug 09, 2022

• Banks have approached the Central Board of Direct Taxes (CBDT) for clarity on the scope of Section 194R of the Income Tax Act, as they fear the newly introduced provision will force them to deduct a 10% tax at source on incentives extended to large business customers through credit cards, banking sources told FE.According to Section 194R, introduced in the Budget for FY23, any person providing a resident a benefit or perquisite arising from a business or the exercise of a profession by such resident, will ensure that tax has been deducted at the rate of 10% of the value of the benefit or perquisite. The rules, tied to some riders, came into force on July 1.

Taxman disallows Rs 4.5L TDS, irks ITAT

• Aug 16, 2022
  

  The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has come down heavily on the I-T department for its failure to take cognisance of a tax deducted at source (TDS). The TDS was on professional income earned by a taxpayer and, consequently, the I-T department also raised a tax demand on her — along with penal interest.

  A majority of taxpayers invariably incur TDS against their income — be it against salary, professional income or interest income. To carry on with this illustration, it is the employer organisation, the client and the bank which are respectively responsible for deducting tax at source and depositing it with the government.

CBDT exempts non-resident corporates from TCS on remittances, tour packages

• Aug 20, 2022
  
  

• The income tax department has exempted non-resident corporate entities and firms not having a permanent establishment or a fixed place of business in India from 5 per cent TCS on foreign remittances and tour packages.The Central Board of Direct Taxes (CBDT) has notified changes to I-T rules and expanded the scope of exemption (that was previously available only to non-resident individuals) under section 206(1G) of the I-T Act.

Scrapping TCS on sale of overseas tour packages to foreign tour operators to boost Indian players: IATO

• Aug 22, 2022
  
  
  The government’s decision to withdraw the 5% “tax collection at source” (TCS) on sale of overseas tour packages to foreign tour operators could aid the recovery of the pandemic-stricken sector, says the Indian Association of Tour Operators (IATO) — an apex body of over 1,700 inbound tour operators. “The same was earlier withdrawn only for individual foreign tourists but now on IATO’s representation, the government has announced removal of tax, both on individual foreign tourists as well as foreign tour operators (FTO’s). The removal would make the tour packages offered by Indian tour operators to foreigners a bit cheaper and would help provide some succour to the pandemic ravaged sector,” IATO said in a statement.

Clarificatory circular on new TDS provisions for banks soon, says CBDT chairman

Aug 27, 2022

The CBDT will soon come out with a circular for various stakeholders, especially banks, to "clarify" the procedures on the applicability of new TDS provisions regarding benefits or prerequisites received in a business or profession. CBDT Chairman Nitin Gupta said the board, which frames policies for the Income-Tax department, will issue an official explainer on the subject, including the "pressing" issue of one-time settlement (OTS) being faced by the banks.
"We will clarify the position that will be helpful to the stakeholders. We will be coming out with a clarificatory circular very soon," he said during an interaction on Thursday. Gupta said all issues on the canvass of section 194R of the Income Tax Act will be addressed as part of the forthcoming circular. While the CBDT had issued a set of guidelines in June with regard to the applicability of the newly introduced section 194R in the Income Tax Act, the banking sector had specific concerns with regard to their businesses and operations.

Loan waiver not a benefit, banks exempt from 10% TDS for one-time settlement

• Sep 14, 2022

  
  

  • Banks will not be required to deduct 10% tax at source (TDS) on one-time settlement (OTS) or loan waivers, the Central Board of Direct Taxes said on Tuesday.

  • CBDT said in a detailed clarification that OTS or loan waiver by a bank will not be treated as a benefit or a perquisite and not face Tax Deducted at Source as they would have to bear the additional cost of tax deduction besides the haircut. The exemption will be available to all public financial institutions, scheduled banks, cooperative banks, rural development banks, state financial corporations, and state industrial investment corporations.

CBDT Extends Deadline for Filing TDS for Non-Salary Transactions

• Oct 28, 2022
 

• The Central Board of Direct Taxes extended the deadline for filing quarterly TDS statement in Form 26Q for the June quarter by a month till November 30,2022. Form 26Q is used for quarterly filing of TDS returns on payments other than salary. "Considering the difficulties in filing of TDS statement in the revised and updated Form 26Q, the Central Board of Direct Taxes (CBDT) has extended the due date of filing of Form 26Q for the second quarter of financial year 2022-23 from 31st October, 2022 to 30th November, 2022," CBDT said in a statement. The form captures details of total amount paid and tax deducted on such payments during the quarter. It would include payments on account of interest on securities, dividend, winnings from lotteries and crossword puzzles, rent, interest other than interest on securities, fees for professional or technical services.