1. TAX DEDUCTION &
COLLECTION AT SOURCE
CA. DHRUV SETH
DS@SETHSPRO.COM
WWW.SETHSPRO.COM

2. Coverage
Basic TDS provisions
Differentiating between the sections
Procedural aspects of TDS
Penal Consequences of TDS

3. Sec – 192 – TDS on Salary
Every person paying any income
chargeable under the head “Salaries”
exceeds
Rs. 2,00,000/- for Individual
Rs. 2,50,000/- in case of Senior Citizen
Rs. 5,00,000/- in case of Very Senior Citizen

4. Sec – 192 – TDS on Salary
Calculated at
Average Income Tax computed on the
basis of rates in force.
Education Cess + SHE Cess to be applied
No Surcharge

5.  The employee having income chargeable under
any other head of income may inform such
incomes and TDS to employer Form 12C
 Sec 192(3) allow the deductor to make
adjustments for any excess or shortfall in the
deduction of tax already made during the
financial year.
Sec – 192 – TDS on Salary

6. Sec 194A – Interest
 By any person (Not being Individual or HUF whose
total turnover in previous year less than 40 Lacs) if
Interest more than
 If payer is Bank - Rs 10,000/- or
 in Other Cases - Rs 5,000/-
 At the time or Credit or payment which ever is
earlier @10%

7. Sec 194C(1) – Contracts
Applies to -
Central or State Government, Local Authority
Corporation, Company or Co-op Society
Authority for housing accommodation
Society, Trust, University
Partnership firm
Individual, HUF, AOP & BOI whose turnover in
Immediately preceding year was more than 40
Lacs

8. Work contracts including:-
Supply of labour for carrying out work
Advertising
Broadcasting & Telecasting
Carriage of goods and passengers by any
mode of transport other than railways.
Catering
Sec 194C(1) – Contracts

9.  Exemption:-
 Rs 30,000/- per credit/payment and
 Rs 75,000/- per financial year
 Nil for transporter if PAN available.
 On Invoice value, excluding value of material if
value of material is mentioned separately.
 At the time of payment or credit which ever is
earlier
Sec 194C(1) – Contracts

10. Exemption Limit Rs 5,000/-
By all (Individual & HUF whose turnover in
Immediately preceding year was more
than 40 Lacs)
Deduction 10%
Sec 194H – Commission

11. Sec 194I – Rent
 By all (Individual & HUF whose turnover in Immediately
preceding year was more than 40 Lacs)
 Deductible if More than Rs 1,80,000/- per year
 Rent means any payment for the use of
 Building, Furniture or fittings - 10%
 Machinery or Plant or equipment's - 2%

12. Sec 194J – Professional & Technical
 By all (Individual & HUF whose turnover in
Immediately preceding year was more than 40
Lacs)
 Exempt- Rs 20,000/- per year
 Rate - 10%
 Fees for Professional Services
 Fees for Technical Services
 Royalty or non compete payments

13. Sec 195 - Payment to Non residents
 Interest or other sums (Other than salary and
dividend u/s 115-O) to Non residents or the foreign
company
 At the rate specified in Finance act or as per DTAA,
which ever is beneficial to the assessee
 From 1st
July 2009 remittance can be made after
filing form 15CA/15CB

14. Non Furnishing of PAN- Section
206AA
From 1st
April 2010
 Any person who is entitled to receive any sum on
which tax is deductible shall furnish his PAN to the
deductor then TDS is liable to be deducted
 The Rate specified
 Or 20%
Whichever is Higher

15. Tax Collection at Source- Sec
206C
 Every person being a seller shall collect TCS
 No Minimum Exemption limit
 Alcoholic liquor for human consumption- 1%
 Tendu Leaves 5%
 Timber under forest lease, any other forest produce-
2.5%
 Scrap 1%

16. Penal Consequences
 Disallowance of expense U/s 40a(i)(a)
 Interest @1.5% per month till default continues
 Late filing of TDS return – Fees of Rs. 200 per day
 Wrong filing of TDS return – Upto Rs. 1 lac
 Prosecution for not depositing deducted TDS