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CA Ameet Patel demystifies TDS provisions at Moneylife Foundation programme
Many taxpayers consider provisions relating to TDS (Tax Deducted at Source) to be complicated. Ameet Patel, a chartered accountant by profession and a partner at Manohar Chowdhry & Associates, demystified TDS provisions for a packed audience today. The session, “TDS and how they affect you as a taxpayer” was conducted by Moneylife Foundation at the Moneylife Foundation Knowledge Centre, Dadar, with the support of Capital First. He started the session remarking, “The literacy levels for taxation among people are quite low,” making sessions like these are important. 
 
Ameet Patel, a rankholder an accomplished Chartered Accountant and ex-president of the Bombay Chartered Accountants' Society (BCAS) gave an introduction to TDS and highlighted its advantages. He then moved on to  TDS provisions for different payments like salaries, interest on securities interest on banking/other companies, rent and professional fees. Given the fact that it has become complicated for the tax deductor, he simplified these provisions. In many cases, TDS does not need to be deducted. For instance, TDS is not collected on payments made to Reserve Bank of India (RBI) and the Government of India. Ameet Patel highlighted many other scenarios like these.
 
The rates at which TDS is deducted is different for different nature of payments. Moreover, these rates are different for different categories of assesses. Mr Patel simplified these provisions, appropriately classifying these into different heads. He said, “For salaries, there is no specified rate for deduction of TDS as opposed to other forms of payment.” Some people have the misconception that surcharge and education cess is to be added while deducting TDS. Ameet Patel clarified that these need not be added. Highlighting the due dates for payment of TDS, he said that payment for the month of March can be made upto April 30 as opposed to the 7th of the next month for all other months. 

In a few cases, deductors fail to comply with TDS provisions, which give rise to consequences like penalties and interest. Ameet Patel highlighted these consequences, emphasising the importance of complying with these provisions. He highlighted the importance of Form 26AS saying that it is like the Bible for taxpayers for TDS provisions. Delineating different aspects of Form 26AS, he said that  a simple error like quoting of incorrect PAN (or not quoting PAN) in TDS return is the most common reason why proper credit is not reflected in TDS return.  He told the audience to ensure that the information in Form 26AS is the same as that in the TDS certificate to make sure that proper TDS credit is appearing in Government records before filing the return of income. He also pointed out that getting TDS certificate is not that important as long as the TDS is reflected in 26AS.
 
Form 15G and 15H are other critical important forms for savers by which they tell the banks not to deduct TDS, if they so qualify. He highlighted the complexities of these forms, going on to explain the misconceptions many have relating to these forms and their own tax status. 
 
He finally advised the audience to comply with tax laws, given the fact that records are maintained digitally by government agencies and everything can be tracked by them. Many people are unduly harsh on the tax deductors. He advised them to empathise with them sating “Put yourself in the tax deductors shoes.” Tax deductors are compelled to take a conservative position when the law is not very clear as there are harsh consequences (interest, penalty and prosecution) if they do not comply with the provisions.  
 
The session ended with an interactive Q & A session covering TDS provisions for a number of issues like co-operative societies, bank fixed deposits and gifts with Mr Patel re-iterating the vital importance of 26AS. This was the second in a series of tax programmes sponsored by Capital First.

User

COMMENTS

chhaganlal s nandu

9 months ago

THE SESSION WAS VERY INTERESTING.
I HAVE ONE QUESTION. THE PERSON MAKING THE PAYMENT DEDUCTS T D S FROM THE DEDUCTEE BUT DOES NOT DEPOSIT IN THE TREASURY. THE DEDUCTOR WILL HAVE TO FACE THE CONSEQUENCIES BUT THE DEDUCTEE WILL NOT GET THE CREDIT AS IT WILL NOT BE REFLECTED IN 26 AS. WHAT IS THE REMEDY?

REPLY

Sucheta Dalal

In Reply to chhaganlal s nandu 9 months ago

Please go to http://foundation.moneylife.in and send your question through our FREE tax helpline available there.

chhaganlal s nandu

9 months ago

THE SESSION WAS VERY INTERESTING.
I HAVE ONE QUESTION. THE PERSON MAKING THE PAYMENT DEDUCTS T D S FROM THE DEDUCTEE BUT DOES NOT DEPOSIT IN THE TREASURY. THE DEDUCTOR WILL HAVE TO FACE THE CONSEQUENCIES BUT THE DEDUCTEE WILL NOT GET THE CREDIT AS IT WILL NOT BE REFLECTED IN 26 AS. WHAT IS THE REMEDY?

Nifty, Sensex may rally a bit more – Thursday closing report
We had mentioned in Wednesday’s closing report that Nifty, Sensex might record more gains. As expected, the major indices of the Indian stock markets advanced further and closed on Thursday with upto 1.88% over Wednesday’s close. Trading volumes were high on the NSE (more so since it was the derivatives expiry day) and no one was in doubt about the strength of the rally. The trends of the major indices in the course of Thursday’s trading are given in the table below:
 
 
Positive global cues, along with fresh influx of foreign funds and a rise in global crude oil prices, lifted the global and Indian equity markets on Thursday. Besides, healthy quarterly results and a strong rupee pushed both the key benchmark indices to their new highest monthly levels. The key indices made substantial gains during the mid-afternoon trade session as healthy buying was witnessed in capital goods, banks and automobile stocks. The BSE market breadth was tilted in favour of the bulls -- with 1,304 advances and 1,142 declines. In terms of broader markets, the midcap and smallcap indices gained more than half a percent each. Initially on Thursday, the key indices opened on a higher note, in-sync with their Japanese peers, and a positive close to the US markets on Wednesday. The domestic indices moved on their upward trajectory aided by positive global cues emanating out of US and Europe. Besides, value buying and fresh influx of foreign funds helped domestic indices surge. In addition, higher crude oil prices and a strong rupee cheered investors. There is however, a word of caution for short-term investors that the market can turn volatile owing to F&O (Futures and Options) expiry session, according to market analysts.
 
Reserve Bank of India Governor Raghuram Rajan on Thursday said the central bank had been moderating extreme currency volatility through interventions. "The RBI has been moderating periods of extreme volatility in currency through exchange intervention -- though only when the movement is excessive -- and increasing access to foreign exchange reserves, including pooling of reserves," Rajan said while inaugurating a meeting of SAARCFINANCE. On the Indian situation, Rajan described the steps taken to reduce the fiscal deficit, of containing inflation through a combination of better food management, and on a new inflation framework and calibrated monetary policies. India had also embarked "on a clean-up of bad debts in the banking system so as to free bank balance sheets to support growth", he added. The stability of the rupee is important for FIIs to maintain the ability to take back stock market capital gains to their home country in US dollars, and this is clearly a time when FIIs are bullish on the Indian stock markets.
 
As the government fine-tunes tax regime with countries it has the Double Taxation Avoidance Agreement (DTAA) with, India Inc. has asked the Income Tax department to ensure that Indian firms are not subjected to double taxation. “Difference in accounting practices followed by different countries would lead to a double taxation on the income of an Indian taxpayer,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement.  The association said it has made a presentation to the Central Board of Direct Taxes (CBDT) suggesting changes in the proposed Foreign Tax Credit (FTC) rules to ensure the Indian taxpayer is not subjected to double tax incidence on income. “A high-level delegation led by Rajesh Garg, chairman of the Assocham national council on direct taxes, recently called on CBDT member Rani Singh Nair and held detailed discussion on the issue,” the statement said.  Assocham said it may be possible that in the initial years, FTC exceeds the amount of Indian taxes whereas in the subsequent years, the Indian taxes exceed FTC. The tax policy of the Indian government is important as India is an attractive destination for both FDI and FII investment.
 
Tata Steel on Wednesday posted a net loss of Rs.3,279 crore for the fourth quarter ended March caused by one-off costs associated with its European business. The company said in a statement that fourth quarter earnings were impacted due to one-off costs associated with the Britain business, such as impairment of non-current assets (Rs.1,724 crore), employee separation compensation (Rs.239 crore) and restructuring and other provisions (Rs.856 crore), among others. "While the pressure on the product prices continued during the quarter both in India and in Europe, our operations during the quarter were very resilient across most of the geographies and have reported much improved underlying performance compared to the previous quarter," said Tata Steel ED (Finance) Kaushik Chatterjee. The company's consolidated revenues for the quarter in question of Rs.29,507 crore were down 12.4% from Rs.33,666 crore in the same period a year ago. Earnings before interest, tax, depreciation and amortisation (EBITDA), or operating income, during the fourth quarter of Rs.2,270 crore, increased 43.7% from Rs.1,580 crore last year. From its India business, the company recorded a net profit of Rs.676 crore and EBITDA of Rs.2,188 crore on revenues of Rs.10,522 crore. "Despite muted market environment, Tata Steel India operations recorded strong growth in the quarter and volumes grew by 16% on the back of growth in high value segments like auto and branded products," the company said. Tata Steel shares closed at Rs325.00, up 0.20% on the BSE.
 
State-run gas utility GAIL (India) on Wednesday reported a healthy 51% rise in net profits at Rs.770 crore for the fourth quarter ended March buoyed by higher volumes of gas transmission and bigger trading margins. The company posted a net profit of Rs.511 crore in the same period a year ago, GAIL chairman B.C. Tripathi told reporters. "Profit was higher because of higher transmission and trading margins," Tripathi said. GAIL's turnover in the quarter, however, fell 18.3% to Rs.11,627 crore. In the same quarter last year, the company's turnover was Rs.14,235 crore. Sales fell due to a 15% drop in petrochemicals prices and a 38 percent decline in LPG price realisations, the chairman said. For the full fiscal 2015-16, GAIL reported a net profit of Rs.2,299 crore on a turnover of Rs.51,614 crore. In the previous fiscal, the company had a net profit of Rs.3,039 crore. GAIL will import 55 shiploads of 3.5 million tons of liquefied natural gas (LNG) in 2016-17, which was the same volume imported in the previous fiscal, Tripathi said. Gail India shares closed at Rs380.10, down 0.31% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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