3 CD statement

[Debtosh Dey]

Clause 34a of 3CD statement mentions “specified rate” so that TDS deducted below such rate should be disclosed. I do not find any definition of specified rate in Income Tax Act (nor any clarification in Guidance Notes issued by ICAI). The only clue is Sec 2(37A) where, for the purpose of deduction of tax u/s 192, 193, 194, 194A, 194B, 194BB, 194D and 195 it means rates specified in the Finance Act. The section also includes rates specified in DTA u/s 90 and 90A in relation to TDS u/s 195.

Note that all sections of TDS like 194C, 194H, 194I, etc are not covered in sec 2(37A) stated above and the section goes beyond Finance Act in case of DTA. Therefore, does “specified rate” also include nil or concessional rate of tax granted by Income Tax Authority to recipients under certificates u/s 197 ? If yes, does the clause mean that TDS deducted less than rates specified in Finance Act/ DTA/ Certificate u/s 197 for the relevant section only needs to be disclosed ? (No question if certified rate is ‘nil’).

Debtosh Dey, M.Sc (Engg), FIE, C. Engg (I), FCMA, FCS, LL.B.

[Ganeshan Kalyani]

In my view specified rate means applicable rate for respective services under appropriate section of the TDS provision. The rate could be any rate applicable for such service, may it be lower rate as per Income tax certificate or higher rate of tax deducted or NIL rate. All the expenses to which TDS is deductible is required to be disclosed in clause 34a of Form 3CD annexures. This is my view.

[Debtosh Dey]

Thanks Mr Ganeshan Kalyani.

AI Summary

Specified rate for TDS: disclose payments where withholding is below the applicable rate under the relevant TDS provision. The query asks whether 'specified rate' in clause 34a of Form 3CD means only rates in the Finance Act/DTAA or also concessional or nil rates under tax certificates. The reply adopts a functional interpretation: specified rate equals the applicable rate for the particular TDS provision-statutory, DTAA, or certificate-granted-and all expenses subject to TDS, including cases where tax is deducted below such applicable rate, must be disclosed in clause 34a.