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PROVISIONS & PRACTICE
28th May 2009

Presented by:
Alok Bansal
MOBILE NO- 09350880619
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 Regularinflow of revenue for

Government
 Checking of tax evasion

 Widening of tax base

 |  |

S.192 S.193 S.194 S.194A

Salary Int.-Sec. Dividend Other Int.

194B 194BB 194C 194D

Lot/CW Horse race. Contract Ins. Com.
194E 194EE 194F 194G
NR Sports NSS MF/UTI Com.Lot.
194H 194I 194J 194K,194LA
Com/Brok Rent Prof/Tec. Units/C.Acq





  

Y

(Except individuals & HUF in
certain cases)

 


  
SMALL TIME BUSINESSMAN/
PROFESSIONAL?
W.E.F. 01.06.2002, àà à Y  Y

have to deduct tax at source if turnover
exceeds Rs.40 lacs (business), Rs.10 lacs
(profession) for payments u/s.194A, 194C,
194H, 194I & 194J.

 
All persons for specific payments except ±
 a) Quantum of payment/ liability in the
financial year is less than the prescribed limit.
 b) Certificate issued by A.O. u/s.197

 c) the payee has furnished the declaration in

form 15G/15H
In case of Non Resident all the payments if
the payment is an income under the Income-
tax Act read with DTAA.
| |

 Tax is to be deducted at the time of credit or at
the time of payment whichever is earlier, at the
prescribed rate
 On salary, Tax is deducted on the amount
payable at the average rate computed on the
income tax rates in force and estimated income.
 For payments other than salary, Tax is deducted
at a rate prescribed in the statue.
 Tax rated are enhanced by Surcharge and
Education Cess wherever applicable.

||


 In case of salary ±

Within one week from the end of

the month in which tax is
deducted.

||


 In case of payments other than salary-

Within   from the end of the month.

 Payments credited or paid on 31st March (last

date of Accounting Year), within two months.

||


 Quarterly Payments in Special

Cases
th th th
 15 June, 15 Sept., 15 Dec.,
15th Mar.
 Prior approval of JCIT.
|
 The person responsible for deducting tax at
source has to apply for TAN in Form No. 49B
within one month from the end of the month
in which tax is deducted for the first time.

 The TAN should be quoted in all challans,

TDS Certificates, Quarterly Returns,
statements and correspondence.

 

 !

 Under this head tax to be deducted on the

payments made by the employer to
employees under an contract/ agreement
wherein employer and employee
relationship is established

"#"$%  &'''
 Tax is to be deducted at the time of payment of salaries
 Deduction of income tax from the amount payable is based on
average rate of Income-tax.
 Average rate of Income-tax is computed on the basis of the rates
in force for the financial year in which the payment is made, on the
estimated income of the assessee for that financial year.
 From new employees joined during the year, a copy of Form 16
issued by previous employer or a certificate on Form 12B, giving
salary income and tax deducted, has to be obtained.
 Tax is to be deducted on the aggregate of salary i.e.salary from
previous employer A
 salary from existing employer after giving
the credit for tax deducted by the previous employer.

"#"$%  &'''
 The computation of estimated income is based upon:
 Estimated salary to be given to the employee in the financial
year
 Salary received by him from previous employer- if the
employee has not submitted the form 16/ form 12B then it has
to be presumed that the same rate of salary which present
employer is paying is paid by the previous employer.
 Allowing the deductions for the investments/ payments made
by him which are allowable under chapter VIA (except
donation) & section 10, initially on the basis of declaration and
at the end of the year on the basis of proofs.
 Allowing the set off of the loss (interest payment only) under
³Income from House Property´ if used by the employee under
self occupied only, on the basis of a Statement from the
lender.
 Tax so deducted should be deposited by the 7 days of succeeding
month.

"#"$%  &'''

 |"("% )$*$% #+:

Income Rate
upto Rs. 1,50,000 Nil
Next Rs.1,50,000 10 %
Next Rs.2,00,000 20 %
Balance 30 %
Surcharge 10% of tax payable if taxable
income exceeds Rs. 10 lacs
Edu. & H. Edu. Cess 3% on Tax+ Surcharge

"#"$%  &'''
&, , &$-"*$ :
*Under Section 80C
Investments in NSC, NSS, LIC Premium, ULIP, PF,
PPF, Tuition Fee etc. including repayment of housing
loan
Maximum limit - Rs. 1,00,000
In case of LIC, premium should not exceed 20% of sum
assured.
Tuition fee is maximum up to 2 child

"#"$%  &'''
 &, , &$ -"*$    ,&
Under Section 80D
Medical Insurance Premium for Self, Spouse, dependent
Children up to Maximum of Rs. 15,000/-.
Additional deduction of Rs. 15,000/- if premium is paid for
policy of Parents and if parents are Senior Citizen, than
deduction limit is Rs. 20,000/-.
Payment should not be made in cash.
 Deduction u/s 80DD
Expenditure for Medical treatment of dependent person
with disability ± Rs. 50,000/- subject to condition that
certificate in form 10-IA as specified in rule 11A along with
copy of certificate issued by Medical Authority to
furnished.
Deduction is Rs. 75,000/- if there is several disability.

"#"$%  &'''
&, ,.% /0
Interest paid on account of pursuing higher education for
self, spouse and children up to eight assessment years
starting from the year from which interest is paid by the
employee.

&, ,.%/0

Only donations made to Prime Minister/ Chief Minister

Relief. Donation or similar notified donations are allowed.

For the other donations deduction is to be claimed by the

employees in his income-tax return. Employer can not
allow for the purpose of deduction of tax at source from
salary payment .

"#"$%  &'''
È | % %%, 1 " $,#"$ 2$+ +"$
*$%$3 1 - 4-& ) "( &&, "
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&&, .  &&, 7 " &#"$" -"%
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*****

"#"$%  &'''

Some Important issues in TDS on Salary

'%% )$4 9,% $*$+
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)$4 %#) ,*& *$*$+ %  3
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*$2,% +"$
% *$  < $,#"$7 &#"$"  )$4 
"# 15- *+ ) $4 = $ %"#"$+ $)"
may be "8 )$4 -  $ & 4*#+ " &
"( -"%  3 4*,& ")$  %&$ 1 *$2,%
4*#+$ %"#"$+ < |
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- 4*#+  &#"$ -% *$2,% %"#"$+ "%
&&& 3+ #- 91- ,$  "% ) "$,3 
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 $A,$&  3 ##& 3+  "% -$ % 
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##+ $&,% &

"#"$%  &'''

?'#"4 1%"#"$+$#),.%/!
$ #"4 1 $#) 5- %"#"$+ % *"& 
"$$"$ $ "&2"  - $,#"$ *$2&% )$
$#)  %,34%% ) $4 ' 0'

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3  %&$& 3+  5-# 4*, 1 |"(
#"3#+ 2 ) , ) % *"& )$ *$
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 $% 
,$%
 
!
 Tax is to be deducted at the time of payment of interest
on securities [viz. Debentures issued by the company] or
credit to the account of the payee (whichever is earlier)
 @ 10% in case of individuals/HUFs and 20% in case of
companies [plus surcharge @ 10% on tax wherever
applicable plus education cess on tax & surcharge]
 Exceptions
- if interest payable to an individual on debenture in a
year is less than Rs. 2,500/- and interest is paid by an
account payee cheque
- If an individual furnishes a declaration in Form No.
15G or 15H (if deductee is senior citizen)
 $% 
,$%  &'''

In other cases, the payee furnishes a certificate issued by

his Assessing officer either for nil TDS or TDS at a lower
rate

 A copy of Form No. 15G/15H is to be submitted to Chief

Commissioner or Commissioner of Income-tax on or
before seven days of the next month following the month
in which the said declaration is received.

 Tax is to be deposited with the Central Govt. by 7th of

next month.

 In case of year end provisions, tax may be deposited

within two months from the close of accounting/financial
year.
-$ $%
 !>
 Tax is to be deducted at the time of payment of interest
or credit to the account of the payee (whichever is earlier)
 @ 10% in case of individuals/HUFs and 20% in case of
companies [plus surcharge @ 10% on tax wherever
applicable plus education cess on tax & surcharge]
 Exceptions
- if interest payable in a year is less than Rs. 5,000/-
- If an individual furnishes a declaration in Form No.
15G/15H
- In other cases, the payee furnishes a certificate
issued by his Assessing officer either for nil TDS or
TDS at a lower rate
-$ $%  &'''
Exceptions contd...
 In case interest payable to -
- a banking company
- any co-operative society engaged in the business
of
banking
- any financial corporation established under a
Central/State or Provincial Act
- LIC / UTI
- any company or co-operative society engaged in
the business of insurance
- other notified institutions,association or body
-$ $%  &'''
Exceptions contd«
 In case of interest payable by -
- a firm to its partner
- a co-operative society to its members or to other co-
operative society
- interest on notified deposit scheme framed by Central
Govt.
- banks on deposits [other than time deposits]
- by agricultural credit society, primary credit society,
co- op. land mortgage bank, co-op. land dev. bank
on deposits
- by Central Government
-$ $%  &'''

 A copy of Form No. 15G/15H is to be submitted to Chief

Commissioner or Commissioner of Income-tax on or
before seven days of the next month following the month
in which the said declaration is received.

 Tax is to be deposited with the Central Govt. by 7th of

next month

 In case of year end provisions, tax may be deposited

within two months from the close of accounting/financial
year i.e. by 31st May.
-$ $%  &'''
Some legal decision on TDS
on interest
1 Where loan is taken by the director/employee but the
entries are routed through Company, the company is
liable to deduct at source {Century Building Industries Pvt.
Ltd (SC) (293 ITR 194)}

2. Where at the time of making the provisions the payee of

interest is not known the provision of section 194A will not
attract {IDBI (ITAT, Mumbai) (107 ITD 45)}
"+4  $"$%
!>
 Tax is to be deducted at the time of payment to be made
for work contracts or credit to the account of the payee
(whichever is earlier)
 Income Tax is to be deducted at source @ 1% on
Advertising contracts and @2% on any other contracts on
the amount paid/credited. In the case of sub-contracts, the
main contractor should deduct tax at source @1% on the
amount paid/credited to the subcontractor.
 Exceptions
The value of each contract is less than Rs. 20,000/- and
the total contracts/ payments to the contractor in a year is
less than Rs. 50,000/-.
"+4  $"$%  &'''

 Contractor furnishes lower/ Nil rate certificate issued by his

Assessing officer

 Provisions of Section 194C are applicable only where the

contract is either a ³contract for carrying out any work´ or a
³contract for supply of labour for works contract´. Hence,
these provisions are not applicable for payments made
under the contract of sale of goods.
"+4  $"$%  &'''

Contract u/s 194C includes:

i Work contracts, service contract, transport contracts,
catering contracts

i Contract for couriers for carrying documents, letters etc.

i Contracts for supply of labour for carrying out any work

i Maintenance contracts including supply of spares

i Contracts for supply of printed material as per prescribed

specifications.

i Transport contracts- each GR is a separate contract

unless until a specific contract is executed.
"+4  $"$%  &'''
 &2$% 1 $"% #,&B
* Advertisement contracts with
- advertising agencies
- Print & electronic media.
* Advertisement in Souvenir, magazines etc.
* Contract for display of hoardings, banners etc.

 Tax is to be deposited with the Central Govt. by 7th of next

month

 In case of year end provisioning, the time limit for

depositing the tax is two months from the close of
accounting year.
"+4  $"$%  &'''

%%,%#"$)&3+|2&$,#"$ @?<-$%
" &3+2"$,%,$

1. Income-tax is to be deducted on the amount of

payment/credit and not on the income part of the
amount.

2. The Income-tax has to be deducted on payment or

booking of expenses which ever is earlier.

3. The purchase of Air ticket from Airlines or travel

agents are out of purview of section 194C

4. Hiring of chartered aircraft for carriage of passengers

or goods falls under the purview of section 194C..
"+4  $"$%  &'''
5. Advertising contracts- Only contracts of client with
advertising agency are covered, Contracts of
advertising agencies with media (includes both print
and electronic media) are out of purview.

6. Adjustment of advance payment- No tax has to be

deducted at the time of adjustment against the bills if
the tax has been deducted at the time of payment.

7. Consolidated bill for advertising and artwork from

advertising agencies ± Income-tax is to be deducted
@ 1% from the gross bill.

8. The contract for putting up a hoarding is an

advertising contract.
"+4  $"$%  &'''

9. Contract for providing the space for hoarding is covered

under section 194I not 194C.

10. Contract for sponsorship for debates, seminars and

other functions held in colleges, schools and
associations with a view to earn publicity through
display of banners, etc., put up by the organizers, are
advertisement contracts under section 194C will apply.

11. Contract from Clearing and Forwarding agents are

covered under section 194C.

12. Serving food in a restaurant in the normal course of

business of the restaurant is not covered under section
194C.
"+4  $"$%  &'''

13. Contracts with recruitment agencies are covered

under section 194J not in section 194C.
14. Contract for supply of article or thing as per
prescribed specifications are contract for sale.
(Reebok India Co 306 ITR 124).
15. Contract for supply along with fabrication, erection,
installation, maintenance are covered by Section
194C. However if the service used is covered under
technical services then Section 194J is applicable.
16. Section 194C is applicable on the total amount of
bill which includes reimbursement of expenses
also. [Circular No.715 dt.8-8-1995].
"+4  $"$%  &'''

17. Section 194C not applicable with respect to bill

which pertains to reimbursement of expenses

18. Contract for storage in cold storages/ ware houses

where customer is not having any right to use any
demarcated space/place or the machinery of the
cold storage are not covered under section 194-I.
However, on the basis of contractual arrangement
between the customers and cold storage owners
section 194-C are applicable [Circular No.1/2008
dt.10-1-2008].
44%% <$8$"1
'
!>9
 Tax @ 10% plus surcharge plus Education cess:
 Sec 194H covers the services not being the
professional services in the course of buying or
selling of goods or in relation to any transaction
relating to any asset, valuable article or thing not
being securities.
 Tax is to be deducted at the time of payment or
credit, whichever is earlier.
 Commission to C&F Agents are covered u/s 194H.
44%% <$8$"1  &'''
 Exceptions
- Total payment in a year does not exceed Rs.
2,500/-
- Certificate issued by Assessing officer for nil/
lower deduction of Income-tax.
 Tax is to be deposited with the Central Govt. by 7th
of next month
 For making the provisions at close of accounting
year, the time limit for depositing the tax is two
months from the close of accounting year.
 Section 194H is applicable only where contract is
having Principal-Agent relationship.
44%% <$8$"1  &'''

%%,%#"$)&3+|" &3+2"$,%,$
1. Adjustment of commission/ brokerage from remittance
made by the agent/consignee to the principal are covered
u/s 194H Hence the principal/consignor is required to remit
TDS to the credit of the central government within the
prescribed time either by grossing up or by collecting from
the agent.

2. Distributor incentive, early payment discount and bond

expenses does not constitute commission. (Foster India
Pvt. Ltd Vs. ITO (2008) (117 TTJ 346 Pune)
 
 !>

 Payment or booking Rent is subject to deduction of tax

U/s 194I.
 Rent includes and payment under any lease, sub-lease,
tenancy or any other agreement or arrangement for use
of any land or building (including factory building)
together with furniture, fittings and land appurtenant
thereto whether or not such building is owned by the
payee.
 The rates for deductions are
 10% for the use of machinery or plant or equipment
 15% in case of payment to individuals/HUF/Firm
 20% in case of companies
[plus surcharge plus EC]
   &'''
 Exceptions
- the aggregate rent in a year to a party does not
exceed Rs. 1,20,000/-
- The payee furnishes a certificate issued by his
Assessing officer for lower rate of tax.
 In case of joint owners, limit of Rs. 1,20,000/- will
apply to each of the co-owners subject to share is
definite in lease agreement and separate cheques are
being issued to them.
 Tax is to be deposited with the Central Govt. by 7th of
next month
   &'''
%%,%#"$)&3+|" &3+2"$,%,$

1. Deducted of income-tax is from the actual payment. No

consideration of notional income with respect to interest
free deposit given to the landlord.

2. Income-tax is to be deducted from advance rent/ deposit

which is adjustable against future rent. However there is
no need to deduct the tax from the deposit which is
refundable.

3. Non-refundable deposits are also subject to TDS

   &'''
4. Warehousing charges are subject to TDS
under section 194-I

5. Payment to hotels for rooms hired

‡ for the earmarked rooms for a specified rate
and specified period- construed as
accommodation made available on regular
basis and subject to TDS.
‡ Room or set of rooms are not earmarked, but
the hotel has a legal obligation to provide
such types of rooms during the currency of
the agreement are also subject to TDS.
   &'''
6. Payment to hotels for rooms hired where corporate
employers, tour operators and travel agents enter into
agreements with hotels with a view to merely fix the
room tariffs of hotel rooms for their
executives/guests/customers. Such agreements,
usually entered into for lower tariff rates, are in the
nature of rate-contract agreements. There is no
obligation on the part of the hotel to provide a room or
specified set of rooms. The occupancy in such cases
would be occasional or casual. Hence, mere rate
contracts would not attract TDS under section 194-I.
7. Where municipal taxes, ground rent etc. are borne by
the tenant, no tax will be deducted on such sum since
the basis for tax deduction at source under section
194-I is ³income by way of rent´. a
    

 

        
   &'''

8.Circular no-4/2008 dated 28.04.2008 clarifies

that service tax paid by tenant does not partake
the nature of ³Income´ of the landlord and
therefore not subject to TDS.

The clarification of non deduction of Income-tax

on payment of service tax portion is applicable
only on rent. For other payments CBDT has
issued an instruction no- F.No-275/1/2006-IT(B)
dated 21/7/2006, wherein it was clarified that
TDS to be deducted on Service tax portion also
in view of circular no-715.
)$$)%% "#$|- "#

$2%
 !>
 Income-tax deduction rate is 10% [plus surcharge plus
EC] from the payment of fees for Professional or
managerial or consultancy or Technical services.
 Tax is to be deducted at the time of payment of fee or
credit to the account of the payee, whichever is earlier.
 ³Professional Services´ include:-
 services rendered by a person in the course of carrying
on the profession of Legal, medical, engineering,
architectural, accountancy, technical consultancy,
advertising interior decoration or such other profession
as notified u/s 44AA.
 Technical services means the technical servies as in
explanation 2 to clause (vii) of sub section (1) of sec 9.
)$$)%% "#$|- "#

$2%  &C
 Explanation[2] states that ³fees for technical services´
means any consideration (including any lump sum
consideration) for the rendering of any managerial,
technical or consultancy services (including the provision of
services of technical or other personnel) but does not
include consideration for any construction, assembly,
mining or like project undertaken by the recipient or
consideration which would be income of the recipient
chargeable under the head ³Salaries´.]
)$$)%% "#$|- "#

$2%  &C
 Following payments are also be covered :-
 Payments to share registrar
 Payments to recruitment agency
 payments to hospital for rendering medical services

 The tax is to be deducted from gross amount of

the bill if it includes reimbursement for actual
expenses also.

 On a separate bill for reimbursement of actual

expenses incurred, no tax is to be deducted
)$$)%% "#$|- "#

$2%  &C
 Exceptions
 Aggregate fee in a year to a party does not
exceed Rs. 20,000/-
 Payee furnishes a certificate issued by
Assessing officer either for nil TDS or TDS at a
lower rate
 Tax is to be deposited with the Central Govt. by 7th of
next month
 In case of year end provisioning, the time limit for
depositing the tax is two months from the close of
accounting year
"+4 %  %& %

 !?
 Income-tax at source is deductible from payment of :
- Interest
- Royalty
- Fees for technical, managerial consultancy etc.
- any other payment
 Tax is to be deducted at the prescribed rates or the rates
specified in Double Taxation Avoidance Agreements with
the respective countries whichever is lower.
 For remittance of payment a NOC is to be obtained from
the Assessing Officer.
"+4   $%& %
 &C
 Tax is to be deducted at the time of payment or credit to
the account of the payee (whichever is earlier).

 Tax is to be deposited with the Central Govt. by 7th of next

month

 In case of year end provisioning, the time limit for

depositing the tax is two months from the close of
accounting year.

|
|

No deduction of Income-tax at source is required to be

made in case of sums payable to -
‡ Government

‡ Reserve bank of India

‡ Corporations established by or under a Central Act

which is under any law, exempt from income tax on its
income
* Mutual Funds registered under SEBI Act.

* Mutual Funds set up by a public sector bank or a public

financial institution or authorised by RBI
4*,#%$+A, 1)
 W.e.f 1st June, 2001, quoting of PAN is compulsory on -
‡ TDS Certificates
‡ TDS Returns
‡ Statement of perquisites to employees u/s 192(2C)

 Provision is not applicable to persons furnishing Form

15G/15H.

 We have to obtain PAN from all payees and to quote the

same on above documents, in the absence of the PAN
neither company is succeeded in filing the TDS return/
deposit the payment nor the payee will get the TDS credit.
 |

 All TDS returns have to be filed before due dates

prescribed.

 For companies and Government deductors, e-TDS

returns are compulsory.
 D |

| | |
 

 W.E.F. 01.04.2005, the person

responsible for paying tax at
source, shall after depositing
the TDS, prepare and file
Quarterly Statement with the
TINFCs appointed by NSDL




$'  $4 %$*
 ,#
' '
1 24Q TDS on Salaries paid 192 31A

2 26Q TDS on Other Payments v
v v v 
v

v v v  
v 
v v v  
v v 
3 26QA Payments of Interest 206A
v
without deducting tax at
source

4 27Q TDS on Payment to Non 195
v

Resident

5 27EQ TCS on Scraps 206C
v

 D |

| | |

Q.E. Due Date

When to file
30th June 15th July
the
Quarterly 30th Sept. 15th Oct.

Statements 31st
December
15th January

31st March 15th

June
D|  .|

The person responsible for making TDS and preparing

quarterly statements shall quote :
 In case of Deductor¶s :
1. PAN & TAN
2. PAN not required if TDS is made by or on behalf of the
Government

 In case of Deductees¶ :
1. PAN
2. 85% of PAN is required to be quoted in case of TDS other
than TDS on salary & NRI and in case of salary, 95% of
PAN is required to be quoted.




 
  

 

 Modes for furnishing Returns

|   | |  E


 |  |
INSTRUCTIONS for filing through TIN-Facilitation
Centre
 &" B Each quarterly e-TDS statement (Form 24Q, 26Q
and 26QA) should be in a separate CD/Floppy.
 $4 @ B Each quarterly e-TDS statement is accompanied by
a duly filled and signed (by an authorized signatory) Form 27A in
physical form (With Deductor¶s Seal).
 ' ) &" B Each quarterly e-TDS statement is in one
CD/Floppy, it should not be roll across multiple floppies.
 #
FB In case the size of quarterly e-TDS statement exceeds
the capacity of one floppy then it needs to be furnished in a CD.
 4*$%% B Quarterly e-TDS statement should be
compressed, if required, only by using Winzip 8.1 or ZipItFast 3.0
(or higher version) compression utility to ensure quick and
smooth acceptance of the file.
 "3# 1 B Label mentioning TAN, name of deductor, period to
which statement pertains (quarter and F.Y.) and Form no. (24Q,
26Q or 26QA) to be affixed on each CD/floppy for the purpose of
identification.
 2$5$ 1 .
$8 1 -$,1- B There is no overwriting/striking
on Form 27A. If there is any, then the same should be ratified by
an authorized signatory.
 No bank challan or copy of TDS certificate or physical copies
of certificates or no/low deduction of TDS is required to be
furnished along with the statements.
 In case deductor does not have a TAN, it should first obtain the same
by applying for one, using the latest Form 49B through any TIN-FC or
through online web-based facility provided by NSDL (www.tin-
nsdl.com). (Statement shall not be accepted if TAN is not quoted).
 $)" ) | B TAN details (name, address, etc.,) of the deductor
as provided in the quarterly e-TDS statement should be same as in the
TAN database maintained by ITD. If they are different the deductor
shall submit a TAN change request application to update the ITD TAN
database or a copy of the acknowledgment of TAN change request
already submitted.
 $" -% . % B Each branch or Drawing and Disbursement Officer
(DDO) of a deductor furnishing separate quarterly e-TDS statement
should furnish the quarterly e-TDS statement quoting separate TAN
issued to each branch/DDO respectively.
 The quarterly e-TDS statement has to be 


 passed through
the latest version of the FVU.
 $%%$)" B Control totals, TAN and name mentioned in the
quarterly e-TDS statement match with those mentioned on Form 27A.
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On the request of Payee, a consolidated TDS

Certificate may be issued for the entire year within
one month from end of the year.


"4 )$A,%% B
A statement of perquisites or profits in lieu of
salary is to be furnished to employees u/s 192(2C)
in form 12BA
 %A, %)&)",#%
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- Interest @ 1% p.m. u/s 201(1A) from the date of deduction till
actual payment
- Penalty u/s 221 - 100% of tax not deducted
- Penalty u/s 271C - 100% of tax not deducted

 "#,$*"+")$&&, 1"(
- Interest @ 1% p.m. u/s 201(1A) from the date of deduction till
actual payment
- Penalty u/s 221 - 100% of tax not deducted
- Prosecution u/s 276B - 3 months to 7 years imprisonment &
fine
 %A, %)&)",#%
 Disallowance of expenses u/s 40(a)(i)/(ia)/(iii)
Apart from penalty for failure to deduct tax at source or after
deduction failure to deposit the same in Govt. account in time,
the expenditure on which Income-tax is not deducted is not
allowed as deduction under the head PGBP.
Deposit to Govt Account in time means
A) In case where the tax was deducted during the last month
of previous year- on or before the due date of filing of
return.
B) In any other case, on or before the last day of the previous
year.
The said expenditure will be allowed as deduction in the year in
which it was actually paid
 %A, %)&)",#%  &C'

 "#,$A,  |
$)"%.,$ %
- Penalty u/s 272(A)(1) - Rs. 10,000 for each default

 "#,$%%,|
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4
- Penalty u/s 272BB - Rs. 10,000
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v
(1) These rules may be called the Income-tax (8th
Amendment) Rules,2009.
(2) They shall come into force on the 1st day of April,2009.
2. In the Income tax Rules,1962,-
For rules 30, 31, 31A AND 31AA, the following rules shall
be substituted ,namely:-
³Time and mode of payment to Government account of
tax deducted at source or tax paid under Chapter XVII B ³
4 (1) All sums deducted in accordance with the
provisions of Chapter XVII-B shall be paid to the
credit of the Central Government-
(a) Within two months from the end of the month in
which the amount is credited by the tax payer to the
account of the payee if the crediting is on the date up
to which the accounts of the payer are made; and
(b) In any other case , within one week from the end of
the month in which the-
i. deduction is made ; or
ii. Income-tax is due under sub-section 1(A) of section
192.
(2) The person responsible for making deduction, or payment of
tax, under Chapter XVII ±B shall, within the time specified in
sub-rule (1), or sub-rule-(2),-
(a) Electronically furnish an income tax challan in form No. 17;
and
(b) Pay the amount so deducted to the credit of the Central
Government by electronically remitting it into the reserve
bank of India, State Bank of India or any authorized bank.
For the purposes of this rule, the amount shall be construed
as electronically remitted to the Reserve bank of India or of
any authorized bank, if the amount is remitted by way of ±
Internet banking facility of the Reserve Bank of India or of
the State Bank of India or of any authorized bank; or
(a) Credit or debit card
4v (v) Every person who has been allotted a tax deduction and collection
account number under section 2 4  shall deliver, or cause to be
delivered the following quarterly statements; namely :-
(a) The TDS compliance Statement in Form No 24 C ;
(b) The quarterly statement of deduction of tax under section v2 in
Form No 24 Q
(c) The quarterly statement of deduction of Tax under sections v4 to
v D in
(i) Form No 27 Q in respect of the deductee other than a company,
being a non resident or resident but not ordinarily resident, or the
deductee being a foreign company
(ii) Form no 2 Q in respect of all other deductees; and
(d) The Quarterly Statement for collection of tax under section 2 C in Form
No 27EQ
(2) Every person , who is required to deliver, under sub-rule (v), the statements
referred to therein, shall deliver , such statements electronically to the
director general of Income Tax (Systems) or the person authorized by
director general of Income Tax (Systems)
(4) The Statement in Form No 24C referred to in sub-rule (v), shall be
delivered ,on or before the vth July, the vth October , the vth January in
respect of the first three quarters of the financial year ,respectively , and on
or before the vth June following the last quarter of the financial year
(4) The Statement in Form No 24 Q , Form No 2 Q , Form No 27 Q & from
Form No 27EQ referred to in Sub-rule(v) , shall be delivered ,or caused to
be delivered ,on or before the vth June following the financial year
 |  |9|
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