EXEMPTIONS FOR TAX DEDUCTION AT SOURCE

abhishreshthaa

New member
Exceptions

  • Where interest paid does not exceed Rs 5000
  • Paid to any banking company, any financial corporation, LIC,UTI,or any company or co-operative society carrying on the business of insurance, such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette

  • Income credited or paid by a firm to a partner of the firm

  • Income credited or paid by a co-operative society to a member thereof or to any other co-operative society.

  • Income credited or paid in respect of deposits under any schemes like Post Office
  • (Time deposits), Post Office(Recurring deposits), Post Office Monthly Income Account, Kisan Vikas Patra, NSC VIII issue and Indira Vikas Patra.

  • Income credited or paid in respect of deposits (other than time deposits made on or after the 1st day of July, 1995) with a banking company to which the Banking Regulation Act, 1949 applies.
  • To such income credited or paid in respect of-
    - deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank;
    - deposits (other than time deposits made on or after the 1st day of July, 1995) with a co-operative society, other than a co-operative society or bank referred to in sub-clause (a), engaged in carrying on the business of banking.

  • To such income credited or paid by the Central Government under any provision of the Indian Income-tax Act, or the Estate Duty Act, 1953, or the Wealth-tax Act 1957 and other direct taxes.



Deposit in joint names –

  • In absence of any information with the payer both the persons can be treated as payees for TDS purposes.

  • If the payer has definite information about the beneficial ownership of the deposit, the interest payable under joint account can be aggregated with the interest payable on any one of the payees in their separate independent accounts usually with the payee having a higher interest income.

  • If the payer has definite information about the separate share of the joint deposit holders then their respective interest will be added to the separate interest income of each of them.

  • The order of the payees names say X & Y or Y & X on the deposits have no significance.

  • Interest payable on hundi by buyer to supplier in case of outstation sale of goods-

  • Here the supplier draws a hundi on the buyer and routes it through his banker and to charge interest on the amount of hundi from the date of acceptance and date of actual payment. As the interest is payable to the supplier and not to the bank the buyer has to cut TDS under this section on the interest payable.

  • Interest payable by consignors to their commission agent –

  • It has to be deducted even when the commission agent makes a net payment i.e. after deducting interest due to him to the consignor.

  • In a case where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the winnings.


  • Unclaimed and/or undisbursed prize money is not a winning from lottery and so not applicable for section 194 B


The payer can be –

  • Central Government or any State Government; or

  • Local authority; or

  • Corporation;

  • Company; or firm; or Trust or ;

  • Co-operative society; or

  • Authority, constituted in India 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, towns and villages, or for both; or

  • Society registered under the Societies Registration Act, 1860;

  • University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or


  • For the purposes of this section, the expression " work " shall also include advertising;

  • broadcasting and telecasting including production of programmer for such broadcasting or telecasting;

  • carriage of goods and passengers by any mode of transport other than by railways;

  • catering



  • Exception - Any sum credited or paid in pursuance of any contract the consideration for which does not exceed twenty thousand rupees

  • If at the time of entering the contract it was not expected to be above Rs 20000 but later on it breached the limit the TDS has to be cut on earlier payments also.

  • When several contracts are made and each individual contract is less than Rs 20000 but the total payment of all contracts is more than Rs 20000 then TDS is not to be deducted even if the total payment exceeds Rs 20000.
 

rosemarry2

MP Guru
Exceptions

  • Where interest paid does not exceed Rs 5000
  • Paid to any banking company, any financial corporation, LIC,UTI,or any company or co-operative society carrying on the business of insurance, such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette

  • Income credited or paid by a firm to a partner of the firm

  • Income credited or paid by a co-operative society to a member thereof or to any other co-operative society.

  • Income credited or paid in respect of deposits under any schemes like Post Office
  • (Time deposits), Post Office(Recurring deposits), Post Office Monthly Income Account, Kisan Vikas Patra, NSC VIII issue and Indira Vikas Patra.

  • Income credited or paid in respect of deposits (other than time deposits made on or after the 1st day of July, 1995) with a banking company to which the Banking Regulation Act, 1949 applies.
  • To such income credited or paid in respect of-
    - deposits with a primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank;
    - deposits (other than time deposits made on or after the 1st day of July, 1995) with a co-operative society, other than a co-operative society or bank referred to in sub-clause (a), engaged in carrying on the business of banking.

  • To such income credited or paid by the Central Government under any provision of the Indian Income-tax Act, or the Estate Duty Act, 1953, or the Wealth-tax Act 1957 and other direct taxes.



Deposit in joint names –

  • In absence of any information with the payer both the persons can be treated as payees for TDS purposes.

  • If the payer has definite information about the beneficial ownership of the deposit, the interest payable under joint account can be aggregated with the interest payable on any one of the payees in their separate independent accounts usually with the payee having a higher interest income.

  • If the payer has definite information about the separate share of the joint deposit holders then their respective interest will be added to the separate interest income of each of them.

  • The order of the payees names say X & Y or Y & X on the deposits have no significance.

  • Interest payable on hundi by buyer to supplier in case of outstation sale of goods-

  • Here the supplier draws a hundi on the buyer and routes it through his banker and to charge interest on the amount of hundi from the date of acceptance and date of actual payment. As the interest is payable to the supplier and not to the bank the buyer has to cut TDS under this section on the interest payable.

  • Interest payable by consignors to their commission agent –

  • It has to be deducted even when the commission agent makes a net payment i.e. after deducting interest due to him to the consignor.

  • In a case where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the winnings.


  • Unclaimed and/or undisbursed prize money is not a winning from lottery and so not applicable for section 194 B


The payer can be –

  • Central Government or any State Government; or

  • Local authority; or

  • Corporation;

  • Company; or firm; or Trust or ;

  • Co-operative society; or

  • Authority, constituted in India 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, towns and villages, or for both; or

  • Society registered under the Societies Registration Act, 1860;

  • University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or


  • For the purposes of this section, the expression " work " shall also include advertising;

  • broadcasting and telecasting including production of programmer for such broadcasting or telecasting;

  • carriage of goods and passengers by any mode of transport other than by railways;

  • catering



  • Exception - Any sum credited or paid in pursuance of any contract the consideration for which does not exceed twenty thousand rupees

  • If at the time of entering the contract it was not expected to be above Rs 20000 but later on it breached the limit the TDS has to be cut on earlier payments also.

  • When several contracts are made and each individual contract is less than Rs 20000 but the total payment of all contracts is more than Rs 20000 then TDS is not to be deducted even if the total payment exceeds Rs 20000.

Hey abhi,

Please check attachment for Study on TAX Deduction at Source (TDS), so please download and check it.
 

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