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Extended Withholding Tax

by on September 27, 2012

EWT: TDS Overview



EWT: TDS (Tax Deducted at Source)

  • Tax is deducted at source from all payments/provisions which are hit by the TDS provisions of the Act
  • Some of the above payments/provisions pertain to services that come within the scope of Tax Deducted at Source (‘TDS’) under the Indian Income-tax Act, 1961 (‘Act’).
  • Tax is not deducted from payment for goods
  • TDS is required to be deducted at the time of payment or invoice posting whichever is earlier.
  • The taxes which are so deducted, will then have to be deposited to the credit of the Indian Government on or before 7th of next every month.
  • The company will have to issue TDS certificates to the vendors for the tax deducted and also file with the tax office, Quarterly & Annual Return‘ of the total taxes deducted during the year under the various sections of the Act. 

EWT: Vendor TDS:




EWT: Vendor Transactions:



EWT: Customer Interest TDS:




EWT: Provisions and Adjustments:

  • TDS computed on entries in provisional liability accounts (GR/IR and SR/IR Accounts)
  • TDS is computed at each period end on uncleared entries remaining in the GR/IR and SR/IR accounts
  • GR/IR and SR/IR accounts relevant for computing TDS on provisions identified separately
  • GL accounts to which the provisional TDS is posted identified and document Type used for provisional TDS postings is separately identified
  • JV facility available for carrying out changes to TDS relevant postings
  • Accounts to which losses (non-recoverable TDS) is to be posted and the document type to be used for TDS adjustment postings is  identified separately.

EWT Activities:

TDS:

Due Date for monthly TDS rETURN : 7TH of everymonth

TDS on Salaries-192B
TDS on Contractors-194C
TDS ON Rent- 194I
TDS on Professional Fees- 194 J

TDS Querterly Returns:

1st Q-Apr to June- Due date-15th of July
2nd Q- July to Sept- Due Date- 15 Th of Oct
3rd Q- Oct to Dec- Due Date- 15th of Jan
4th Q- Jan to Mar- Due Date 15 Th June

Quartly Returns:
24Q for salaries
27Q for other than salaries

Contracts (including work land labour contract) – 194 c The tax has to be deducted @ 2% on contract payments and 1% for subcontract and advertisement contract payments. The tax is required to be deducted if a single payment exceeds Rs. 20000/– or if the aggregate payments exceed Rs. 50000/– per annum.

Rent- 194 i Any amount paid as rent above Rs. 120000/- per year will attract TDS provisions @ 10% for Individual & HUF and 20% for others.

Fees for professional or technical services/royalty/Income on units of mutual funds: 194 j
The tax has to be deducted @10% with some basic exemption limits.

Interest on securities/Dividends/Interest/Insurance commission-:193, 194, 194A& 194D The tax has to be deducted @ 20% for domestic companies and 10% for others with some basic exemption limits, in the case of interest if the amount of interest is up to Rs. 5000/– during a financial year. however, in the case of interest paid by a banking company, Co-operative society engaged in the business of banking and a public company engaged in the financing or construction of residential houses in India, this limit is Rs. 10000/-.

Insurance commission-: Any person responsible for paying to a resident any remuneration or reward whether by way of commission or otherwise, for procuring insurance business is required to deduct tax @ 20% for companies and 10% for other person if the amount credited or paid is more than Rs. 5000/- in a financial year.

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