(A) TDS in Salaries (Section 192):-
Section 192 of the Act amended to provide that the person responsible for paying, for the purpose of estimating income of the assessee or computing tax deductible under Section 192(1) of the Act, shall obtain from the assessee, evidence or particulars or proof of the prescribed claim, including claim for set-off of loss under the provisions of the Act in the prescribed form and manner. Form will prescribe shortly.
(B) TDS Mechanism for EPF Scheme (EPFS) Section 192A:-
New Section 192A inserted which provides that notwithstanding anything contained in any other provisions of this Act, the Trustees of the EPF Scheme 1952 framed under Section 5 of the Employees Provident Funds and Miscellaneous Provisions Act 1952 or any other person authorized under the Scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognized provident fund is includible in his total income owing to the provision of Rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of such accumulated balance due to the employee, deduct tax thereon @10%. Rules will notify shortly
However, no deduction under aforesaid Section to be made where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee is less than Rs 30,000. It is further provided that any person entitled to receive any amount on which tax is deductible under this Section shall furnish his PAN to the person responsible for deduction of tax failing which tax shall be deducted at the maximum marginal rate.
(C) Deduction of Tax on interest (Other than interest on Securities) (Section 194A):-
(I) Payment of interest by Co-operative banks to its members:
Section 194A of the Act amended to provide that the exemption from deduction of tax from payment of interest by a co-operative bank to its members under Section 194A (3)(v) of the Act shall not apply to the payment of interest on time deposits by the co-operative bank to its members. But cooperative societies can enjoy the benefit even after his amendment.
(II) Amendment of definition of Time Deposit:
Definition of “Time Deposits” amended so as to include Recurring Deposits within its scope for the purpose of deduction of tax under Section 194A of the Act. However, with a view to protect the interest of small depositors, the existing threshold limit of Rs 10,000 for non deduction of tax shall also be applicable in case of interest payment on Recurring Deposits.
(III) Interest payments by banks working on Core Banking Solutions (CBS):
Provisions of Section 194A amended to provide that computation of interest income for the purpose of deduction of tax under Section 194A should be made with reference to the income credited or paid by the Banking Company or the Co-operative Bank or the Public Company (all branches) which has adopted Core Banking Solutions. The interest income of all branches of one bank has to be considered for TDS purpose.
(IV) Motor Accident Claim Tribunal Compensation:
Provisions of Section 194A amended to provide that deduction of tax under Section 194A in respect of interest payment 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 Rs 50,000.
(D) Clarification on TDS on payments made to Transporters (Sec 194C) :-
Provisions of Section 194C amended to provide that the relaxation under Section 194(6) from non deduction of tax shall be applicable only to payments in the nature of transport charges, whether paid by a person engaged in the business of transport or otherwise, to a contractor who is engaged in the business of transport i.e. plying, hiring or leasing goods carriage and who is eligible for computing income as per Section 44AE of the Act (i.e. a person who is not owning more than 10 goods carriage at any time during the previous year) and who has also furnished a declaration in every year to this effect along with his PAN.(Sample declaration attached)
(E) TDS relating to Rent (Section 194I):-
Section 194I of the Income Tax Act amended by providing for no deduction under this Section where income by way of rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset as per Section 10(23FCA), directly owned by such business trust.
(F) TDS relating to certain income from units of a Business Trust (Section 194LBA):-
Section 194LBA(1) amended to provide for deduction of income tax @10% in case where any distributed income as referred to under Section 115UA, being in the nature referred to in Section 10(23FCA) is payable by a Business Trust to its unit holder who is a resident at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or issuance of cheque or draft or by any other mode, whichever is earlier.
Where the unit holder is a non-resident (not being a Company) or a foreign company, the deduction of income tax at source has to at the rate as in force at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or issuance of cheque or draft or by any other mode, whichever is earlier.
(G) TDS relating to income in respect of units of Investment Fund (New Section 194LBB):-
This newly inserted Section 194LBB provides for deduction of tax @10% on any income other than that proportion of income which is of the same nature as referred in Section 10(23FBB) that is payable to a unit holder in respect of units of an investment fund as specified under Section 115UB (Explanation1- Clause a), at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or issuance of cheque or draft or by any other mode, whichever is earlier.
(H) TDS relating to income by way of Interest on certain Bonds & Government Securities (Section 194LD):-
Section 194LD amended to provide that the concessional rate of 5% withholding tax on interest payment in respect of investments in Government securities or Rupee denominated Corporate Bonds shall now be available on interest payable before 01.07.2017 (extended from the present cut- off date of 01.06.2015)
(I) Furnishing of information under Section 195(6):-
Section 195 of the Act to be amended so as to provide that persons responsible for paying any sum to a non resident, not being a Company or a foreign Company, whether chargeable to tax or not, shall be required to furnish the information of the prescribed sum in such form and manner as may be specified. The form prescribed is Form 15CA and 15CB.
Insertion of a new provision under section 271I for levy of penalty of Rs 1,00,000 in case of non-furnishing of information or furnishing of incorrect information under Sub section (6) of Section 195(6) of the Act. i.e, Form 15CA & 15CB
Also provisions of Section 273B amended to provide that no penalty shall be imposed under the new provision if it is proved that there was reasonable cause for non furnishing or incorrect furnishing of information under Section 196(6) of the Act.
(J) No deduction to be made in certain cases (Section 197A):-
Existing provisions of Sub section (1A) & (1C) of Section 197A provides for no deduction of tax shall be made under the Sections referred to the aforesaid sub-sections in case of a person specified therein provided that he furnishes, in duplicate, a written declaration in the prescribed form, duly verified to the effect that the tax on his estimated total income for the previous year in which such income is to be included will be Nil.
Sub section (1A) & (1C) of Section 197A amended so as to give reference of Section 192A & 194DA also in the said sub sections.
(K) Relating to duty of person deducting tax (Section 200):-
Sub section (2A) inserted which provides that in case of an office of the Government where sum deducted in accordance with provisions of Chapter XVII or tax referred to under Section 192(1A) has been paid to the credit of Central Government without the production of challan, then the person responsible for deduction of tax by whatever name called shall deliver or cause to be delivered a statement in such form, duly verified setting forth such particulars and within such time as may be prescribed.
(L) Defining of TDS Statement processing procedure: (Section 200A):-
Under the existing provisions of Section 200A, there is no mechanism for determination of late fee under Section 234E at the time of processing of TDS Statements. Accordingly, provisions of Section 200A amended so as to provide for computation of fee payable under Section 234E at the time of processing of TDS statement under Section 200A of the Act.
(M) Relaxing the requirement of obtaining TAN for certain deductors (Section 203A):-
Under Section 203A, every tax deductor and tax collector is required to obtain TAN and quote the same for reporting of tax deduction/ collection to the Income Tax Department. However, at present, for reporting of tax deducted from payment over a specified threshold limit made for acquisition of immovable property (other than rural agricultural land) from a resident transferor under Section 194-IA, the deductor is not required to obtain and quote TAN and is allowed to report tax deduction quoting his PAN.
Obtaining of TAN creates compliance burden for individuals or HUFs who are exempt from audit under Section 44AB. With a view to reduce the compliance burden on these type of deductors, Section 203A is being amended so as to provide that the requirement of obtaining and quoting TAN under Section 203A shall not apply to notified deductors or collectors.
(N) Profits & gains from the business of trading in alcoholic liquor, forest produce, scrap etc (Section 206C):-
Sub section (3A) inserted which provides that in case of an office of the Government where sum deducted under sub section (1) or sub-section (1C) or sub-section (1D) has been paid to the credit of Central Government without the production of challan, then the person responsible for deduction of tax by whatever name called shall deliver or cause to be delivered a statement in such form, duly verified setting forth such particulars and within such time as may be prescribed.
(O) Insertion of New Section regarding processing of TCS Returns: (Section 206CB):-
As no procedures were specified in the Income Tax Act with regard to processing of TCS Returns, it is proposed to insert a new Section (206CB) relating to processing of TCS Statements. The said Section states that TCS Statement or a correction statement made under Section 206C shall be processed in the manner specified therein.
Download Declaration U/S 194C(6) of the Income Tax Act 1961