Tax deducted at source (TDS) – Miscellaneous TDS provisions

Miscellaneous TDS provisions

194LBA: TDS on Certain Income from Units of a business trust:

Payer: as per section 115UA business trust
Payee: any resident or non- resident (excluding foreign company) which is unit holder
Time of deduction: credit of income to payee or actual payment (cash, cheque, draft, or any mode) whichever is earlier.

Rate of TDS:

• Distribution of dividend income & income referred u/s 10(23FC) &10(23FCA) to resident =10%
• Distribution of dividend income & income referred u/s 10(23FC) (a) to non-resident= 5%
• Distribution of income referred u/s 10(23FC)(b) to non-resident= 10%
• Distribution of income referred u/s 10(23FCA) to non-resident= rates in force

194LBB: TDS on income in respect of Units of Investment fund

Payer: as per section 115UB Investment Fund

Payee: resident or non- resident (including foreign company) which is unit holder

Time of deduction: credit of income to payee or actual payment (cash, cheque, draft, or any mode) whichever is earlier.

Rate of TDS:

• If payee is resident =10%
• If payee is non-resident =rates in force

Exception: all income liable to deduct tds except which is same nature as income referred to u/s 10(23FBB)

194LBC: TDS on income in Respect of Investment in Securitization Trust

Payer: Securitization trust

Payee: Resident or non-resident (including foreign company)

Time of deduction: credit of income to payee or actual payment (cash, cheque, draft, or any mode) whichever is earlier.

Rate of TDS:

• if payee is resident individual & HUD= 25%
• if payee is other than above but resident=30%
• if payee is non-resident=rates in force

1940: TDS on E-commerce Operator

E-commerce operator facilitating sale of goods or provision of services of an E-commerce Participant through its digital or electronic facility or platform (by whatever name called) it means a person must own, operates, or manage Digital/Electronic Facility or Platform like flipkart, Amazon, Meesho etc

Electronic Commerce means the supply of goods or services or both including digital products over digital or electronic network.

E-commerce participant means a person resident in India selling goods or providing services or both, including digital products, through digital or electronic facility for electronic commerce.

Payer: E-commerce operator

Payee: any customer

Time of deduction: credit of income to payee or actual payment (cash, cheque, draft, or any mode) whichever is earlier.

Exceptions

• when E-commerce Participant is individual or HUF and gross amount of such sale or services or both during the previous year does not exceed 5 lakh rupees and e-commerce participant furnished PAN or Aadhar number to the e-commerce operator.
• When E-commerce participant is non-resident than no TDS deduction required
• If E-commerce operator is non-resident than Equalisation levy will be applicable.
• Any amount received or receivable by e-commerce operator for hosting advertisements or providing any other services which are not in connection with the sale or services than tds u/s 194O will not apply but other provision of tds may apply.
• Transaction in securities and commodity traded through recognized stock exchange (RSE) and settled by recognized clearing corporations (RCC) including RSE and RCC located in International Financial service centre (IFSC)
• Transactions in electricity, renewable energy certificates and energy saving certificates traded through power exchanges registered in accordance with Regulation 21 of the CERC.
• The payment gateway like paytm, razor pay will not be required to tds u/s 194O, if tax has been deducted by e-commerce operator u/s 194O on the same transactions, for that payment gateway company may take an undertaking from e-commerce operator regarding deduction of tax.
• If the insurance agent (like policy bazzar) is not involved in transactions between insurance company and the buyer of insurance policy (generally in years after first year of insurance both insurance company and buyer of policy direct transactions can be done)
• As per section 196 payment to government no tds will deduct like IRCTC pay ministry of railway for selling tickets online.

Rate of TDS:

1% on the gross amount of sales or services or both, 5% in absence of Pan/Aadhar

Gross payment includes all type of commission but GST indicated separately in the invoice, it shall be excluded for the purpose of TDS.

194P: TDS in case of specified senior citizen-Relaxation from filling ITR

In case of a specified senior citizen (resident individual only pension and interest income from same specified bank in which he receiving his pension, and has attained age of 75 years or more and), the specified bank (as decided by Central Government) shall compute the total income after considering deduction allowable u/s chapter VIA and rebate allowable u/s 87a for relevant assessment year and deduct TDS based on the rates in force. So once TDS u/s 194P deducted than section 139 will not apply so no requirement of income tax return filling

Declaration: the declaration by specified senior citizen to specified bank which contains total income, deductions u/s VIA, rebate allowed u/s 87a, declaration confirming only pension income and interest income.

194S:TDS on transfer of Virtual Digital Assets

Payer: Any person (resident or non-resident)

Payee: Resident

Transfer of Virtual digital asset deducted u/s 194S

Exceptions

Payer is specified person and the aggregate value of such consideration does not exceed 50,000 during the financial year or

Payer is other than specified person and the aggregate value of such consideration does not exceed 10000 during the financial year

Specified person means an individual or HUF either who does not have any income under PGBP head or if having income under PGBP head turnover does not exceed 1 crore in case of business and receipts does not exceed 50 lacs in case of profession preceding financial year in which Virtual digital assets is transferred.

Time of deduction: credit of income to payee or actual payment (cash, cheque, draft, or any mode) whichever is earlier.

Rate of TDS: 1% but where consideration of transfer of VDA is either wholly in kind or in exchange of another VDA or partly in cash and kind but cash is not sufficient to meet the tax liability, the payer must ensure that the tax required to be paid is deducted

Important Points:

• For a transaction if both 194O & 194S are applicable follow 194S (1).
• If payer is specified person than no need to obtain TAN for deducting tds.
• If there is any difficulty for applying provision of this section than CBDT remove difficulty with prior approval of Central government.

Time limit for filling form-26QE:

Tax deducted must be reported on form-26QE within 30 days from the end of month in which tax has been deducted.

• Details to be contained in form-26QE:
• Pan and name of buyer
• Pan and name of seller
• Address of buyer and seller
• Mobile no. and email of buyer and seller
• Total value of consideration
• Date of transfer
• Date of payment and date of tds deduction
• Payment in cash or kind or another VDA
• Bank payment details to pay