Proposed amendments in TDS/TCS provisions
(Effective from 1st June, 2015.)
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Relaxing the requirement of obtaining TAN for certain deductors
It is proposed to amend the provisions of section 203A of the Act so as to provide that the requirement of
obtaining and quoting of TAN under section 203A of the Act shall not apply to the notified deductors or collectors, especially for the transactions which are likely to be one time transaction such as single transaction of acquisition of immovable property from non-resident by an individual or HUF on which tax is deductible under section 195 of the Act.
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TDS on Transporters:
Presently, section 194C of the Act exempts payments made to contractors during the course of plying, hiring and leasing goods carriage if the contractor furnishes his PAN.
It is proposed to restrict such exemption to cases where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to such effect, along with PAN.
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TDS on interest (other than interest on securities).
Following changes have been proposed in Section 194A of the Act,
i) The current exemption fromTDS on payments of interest to members by a co-operative society will be withdrawn in respect payment of interest by co-operative banks to its members.
ii) The definition of 'time deposits' is proposed to include recurring deposits within its scope.
iii)The computation of interest income for the purposes of deduction of tax under section 194A will now be with reference to Bank instead of Branch.
(iv) The deduction of tax from interest payments on the compensation amount awarded by the Motor Accident Claim Tribunal shall be made only at the time of payment, if the amount of such payment or aggregate amount of such payments during a financial year exceeds INR 50,000.
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Computation of late fee payable under section 234E
It is proposed to amend the IT Act to enable computation of late fee payable under section 234E of the Act at the time of processing of TDS statement under Section 200A of the Act.
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Employer to obtain evidence of the prescribed claims from the employee
The Finance Bill proposes to amend section 192 of the IT Act to provide that for purposes of estimating income of the employee for deduction of tax thereunder, the employer will obtain from the employee evidence of the prescribed claims (including claim of set off loss) under the Act in the form and manner prescribed.
______________________________
Amendment to section 195(6)regarding TDS on Payments to Non Resident
Reporting requirements for Payments to Non Resident are now proposed to be extended even in respect of payments, which in the opinion of the payer, are not chargeable to tax under the IT Act. Further, currently there is no penalty prescribed for non-furnishing of information or furnishing of incorrect information under section 195(6) of the IT Act (i.e. form 15CA and form 15CB).
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It is now proposed to provide a penalty of one lakh rupees in case of non-furnishing of information or furnishing of incorrect information under section 195(6) (i.e. form 15CA and form 15CB) of the Act.
______________________________
TDS on pre-mature taxable withdrawal from Employees Provident Fund
A new provision of the Act has been inserted for deduction of tax at the rate of 10% on pre-mature taxable withdrawal from Employees Provident Fund Scheme, 1952 ("EPFS"). In this case threshold limit of payment of INR 30,000 for such provision to apply.
(Effective from 1st June, 2015.)
**************************
Relaxing the requirement of obtaining TAN for certain deductors
It is proposed to amend the provisions of section 203A of the Act so as to provide that the requirement of
obtaining and quoting of TAN under section 203A of the Act shall not apply to the notified deductors or collectors, especially for the transactions which are likely to be one time transaction such as single transaction of acquisition of immovable property from non-resident by an individual or HUF on which tax is deductible under section 195 of the Act.
______________________________
TDS on Transporters:
Presently, section 194C of the Act exempts payments made to contractors during the course of plying, hiring and leasing goods carriage if the contractor furnishes his PAN.
It is proposed to restrict such exemption to cases where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to such effect, along with PAN.
______________________________
TDS on interest (other than interest on securities).
Following changes have been proposed in Section 194A of the Act,
i) The current exemption fromTDS on payments of interest to members by a co-operative society will be withdrawn in respect payment of interest by co-operative banks to its members.
ii) The definition of 'time deposits' is proposed to include recurring deposits within its scope.
iii)The computation of interest income for the purposes of deduction of tax under section 194A will now be with reference to Bank instead of Branch.
(iv) The deduction of tax from interest payments on the compensation amount awarded by the Motor Accident Claim Tribunal shall be made only at the time of payment, if the amount of such payment or aggregate amount of such payments during a financial year exceeds INR 50,000.
______________________________
Computation of late fee payable under section 234E
It is proposed to amend the IT Act to enable computation of late fee payable under section 234E of the Act at the time of processing of TDS statement under Section 200A of the Act.
______________________________
Employer to obtain evidence of the prescribed claims from the employee
The Finance Bill proposes to amend section 192 of the IT Act to provide that for purposes of estimating income of the employee for deduction of tax thereunder, the employer will obtain from the employee evidence of the prescribed claims (including claim of set off loss) under the Act in the form and manner prescribed.
______________________________
Amendment to section 195(6)regarding TDS on Payments to Non Resident
Reporting requirements for Payments to Non Resident are now proposed to be extended even in respect of payments, which in the opinion of the payer, are not chargeable to tax under the IT Act. Further, currently there is no penalty prescribed for non-furnishing of information or furnishing of incorrect information under section 195(6) of the IT Act (i.e. form 15CA and form 15CB).
______________________________
It is now proposed to provide a penalty of one lakh rupees in case of non-furnishing of information or furnishing of incorrect information under section 195(6) (i.e. form 15CA and form 15CB) of the Act.
______________________________
TDS on pre-mature taxable withdrawal from Employees Provident Fund
A new provision of the Act has been inserted for deduction of tax at the rate of 10% on pre-mature taxable withdrawal from Employees Provident Fund Scheme, 1952 ("EPFS"). In this case threshold limit of payment of INR 30,000 for such provision to apply.
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