TaxTMI 
TaxTMI 
TaxTMI 
TAX COLLECTED AT SOURCE
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....AX COLLECTED AT SOURCE<br>By: - DR.MARIAPPAN GOVINDARAJAN<br>Income Tax<br>Dated:- 9-1-2013<br><br>Section 206C of the Income Tax Act, 1961 ('Act' for short) deals with the tax collected at source. Section 206CA of the Act deals with the obtaining of tax collection account number. The following are the rules dealing with the tax collected at source: * Rule 31AA - Statement of collection of tax under proviso to Section 206C (3); * Rule 37C - Declaration by a buyer for no collection of tax at source under Section 206C(1A); * Rule 37CA - Time and mode of payment to Government account of tax collected at source under Section 206C; * Rule 37D - Certificate of tax collected at source under Section 206C(5); * Rule 37E - Prescribed returns regarding tax collected at source under Section206C (5A); * Rule 37EA - Returns regarding tax collected at source on computer media under Section 206C (5B); * Rule 37F - Prescribed authority for purposes of Section 206C(5A); * Rule 37G - Application for certificate for collection of tax at lower rates under Section 206C(9); * Rule 37H - Certificate for collection of tax at lower rates from buyer under Section 206C(9); ....
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.... * Rule 37-I - Credit for tax collected at source for the purpose of Section 206C(4); * Rule 114AA - Application for allotment of a tax collection account number. TAX COLLECTION AT SOURCE: Section 206C prescribes three types of categories for tax collection at source. According to section 206C(1) every person, being a seller shall, at the time of receipt of amount from the buyer in cash or by cheque or draft or by any other mode, collect from the buyer of any goods of the nature specified in the table below, a sum of equal to the percentage specified in the table of such amount as income tax. Sl. No. Nature of Goods Percentage 1 Alcoholic Liquor for human consumption 1% 2 Tendu leaves 5% 3 Timber obtained under a forest lease 2.5% 4 Timber obtained by any mode other than under a forest lease 2.5% 5 Any other forest produce not being timber or tendu leaves 2.5% 6 Scrap 1% 7 Minerals, being coal or lignite or iron ore 1% No collection of tax is to be made from the buyer, who is resident in India and furnishes a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods mention....
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....ed in the above said table are to be utilized for the purposes of manufacturing, processing or producing articles or things or for the purpose of generation of power and not for trading purposes. The person collecting tax shall delivery one copy of the said declaration to the Chief Commissioner on or before 7th day of the next month following the month in which the declaration is furnished to him. According to Section 206C(1C) every person who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry to another person, other than a public sector company for use of business shall collect the income tax as detailed in the table below: Sl. No Nature of contract or licence or lease etc., Percentage 1 Parking lot 2% 2 Toll Plaza 2% 3 Mining and quarrying 2% According to Section 206C(1D) every person, being a seller, who receives any amount in cash as consideration for sale of bullion (excluding any coin or any other article weighing 10 grams or less) or jewellery shall collect a sum equal to 1% of sale consideration as income tax, if such considerati....
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....on- * For bullion exceeds Rs.2,00,000; or * For jeweler, exceeds Rs.5,00,000. DEFINITION: For this purpose the term 'seller' means the Central Government, a State Government or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or co-operative society and also includes an individuals or a Hindu undivided family whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under Section 44AB(a) or 44AB(b) during the financial year immediately preceding the financial year in which the goods of the nature specified in the above table or under sub section (1D) are sold. 'Scrap' means waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons. 'Buyer' with respect to goods means a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the table or the right to recover any such goods but does not include- * A public sector companies, the Central Government, a Stat....
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....e Government, and an embassy, a High Commission, legation, commission, consulate and the trade representation, of a foreign state and a club; or * A buyer in the retail sale of such goods purchased by him for personal computation. TAX COLLECTION ACCOUNT NUMBER: An application for the allotment of a tax collection account number shall be made in duplicate in Form 49B to the Assessing Officer having jurisdiction to assess the application. Where a tax collection account number has been allotted to a person, such person shall quote such number- * In all challans for the payment of any sum; * In all certificates furnished; * In all the returns to any income tax authority; and * In all other documents pertaining to such transactions as may be prescribed in the interest of revenue. PAYMENT OF TAX: The tax collected shall be deposited within 7days from the last day of the month in which collection is made to the credit of Central Government. Delay in payment will attract interest @ 1% per month or part thereof. After 31.03.2008 all corporate assesees and other assessees who are subject to compulsory audit under Section 44AB have to make electronic payment of tax through inter....
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....net banking. ISSUE OF CERTIFICATE: The person collecting tax shall issue a quarterly certificate of tax collected with full details in Form 27D. The due date of issuing such certificate is as below: Period TCS certificate to be issued on or before Quarter ending 30th June of the financial year July 30 of the financial year Quarter ending 30th September of the financial year October 30 of the financial year Quarter ending 31st December of the financial year January 30 of the financial year Quarter ending 31st March of the financial year May 30 of the financial year immediately following the financial year in which tax is collected If the said certificate is lost, a duplicate certificate may be issued on a plain paper giving necessary details as contained in Form No. 27D. However, the Assessing Officer shall get the payment certified from the Assessing officer designated in this behalf by the Chief Commissioner or Commissioner and shall also obtain an indemnity bond from the assessee. taxtmi.com RETURNS: Quarterly return is to be submitted for the tax collected and deposited and the due date of filing the returns is as detailed below: Period Due date First Qua....
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....rter ending on 30th June 15th July Second Quarter ending on 30th September 15th October Third Quarter ending on 31st December 15th January Fourth Quarter ending on 31st March 15th May The quarterly return cannot be submitted before payment of tax, interest if any and late fee, if any. If PAN data of collectee is lower than 85%, quarterly return will not be accepted. CONSEQUENCES: If a seller does not collect or after collecting the tax fails to pay the tax, he shall be deemed to be an assessee in default in respect of the tax and the amount of the tax together with the amount of simple interest, calculated @ 1%, or part thereof, shall be charged. Sec. 276BB of the Act provides for prosecution who fails to pay tax collected at source for a period which shall not be less than 3 months which may extend up to 7 years with fine. ============= Document 1 Form No. 49B [See section 203A and rule 114A] Form of application for allotment of Tax Deduction and Collection Account Number under Section 203A of the Income Tax Act, 1961 To, Assessing Officer (TDS / TCS) Assessing Officer Code (TDS / TCS) Area code AO Type Range Code AO Number Sir, Whereas *I/we *am/are lia....
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....ble to *deduct/collect or deduct tax and collect tax in accordance with Chapter XVII under the heading *B. - Deduction at source' or 'BB. - Collection at source' of the Income-tax Act, 1961; And whereas no Tax Deduction Account Number/Tax Collection Account Number or Tax Deduction Account Number and Tax Collection Account Number has been allotted to *me/us; *I/We give below the necessary particulars: [ Please refer to instructions before filling up the form ] 1 Name - (Fill only one of the columns 'a' to 'h', whichever is applicable.) (a) Central / State Government: State Government Central Government Local Authority (Central Govt.) Tick the appropriate entry Local Authority (State Govt.) Name of Office Name of Organisation Name of Department Name of Ministry Designation of the person responsible for * making payment / collecting tax (b) Statutory / Autonomous Bodies : Statutory Body Tick the appropriate entry Autonomous Body Name of Office Name of Organisation Designation of the person responsible for * making payment / collecting tax V.1.1 (c) Company (See Note 1) : Tick the appropriate entry Other Government Company/Corporation established by a ....
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....Central Act Government Company/Corporation established by a State Act Company (tick if applicable) Title (M/s) Name of Company Designation of the person responsible for * making payment / collecting tax (d) Branch/Division of a Company: Other Government Company/Corporation established by a Central Act Tick the appropriate entry Government Company/Corporation established by a State Act Company (tick if applicable) Title (M/s) Name of Company Name of Division Name/Location of Branch Designation of the person responsible for * making payment / collecting tax (e) Individual / Hindu Undivided Family (Karta) - (See Note 2) : Tick the appropriate entry Individual Hindu Undivided Family Title (tick the appropriate entry for individual) Shri Smt. Kumari Last Name / Surname First Name Middle Name (f) Branch of Individual Business (Sole proprietorship concern)/ Hindu Undivided Family (Karta) Branch of Individual business Tick the appropriate entry Branch of Hindu Undivided Family Individual/ Hindu Undivided Family (Karta): Smt. Title (tick the appropriate entry for individual) Shri Kumari Last Name / Surname First Name Middle Name Name/Locati....
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....on of branch (g) Firm / Association of Persons / Association of Persons (Trusts) / Body of Individuals / Artificial Juridical Person (See Note 3) : Name (h) Branch of Firm / Association of Persons / Association of Persons (Trusts) / Body of Individuals / Artificial Juridical Person: Name of Firm / Association of Persons / Association of Persons (Trusts) / Body of Individuals / Artificial Juridical Person: Name/Location of branch 2 Address Flat / Door / Block No. Name of Premises / Building / Village Road / Street / Lane / Post Office Area / Locality / Taluka / Sub-Division Town / City / District State / Union Territory PIN code Telephone No. STD Code Phone No. e-mail IDs b) 3 Nationality of Deductor (Tick the appropriate entry) Indian Foreign 4 Permanent Account Number (PAN) - (specify wherever applicable) 5 Existing Tax Deduction Account Number (if any) 6 Existing Tax Collection Account Number (if any) 7 Date (DD-MM-YYYY) - - Signed (Applicant) Verification *I/We, in my/our capacity as .... .do hereby declare that what is stated above is true to the best of my/our knowledge and belief. Verified today the - - d d mm yyyy (Signature/Left Thumb Im....
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....pression of Applicant) at Notes : 1 This column is applicable only if a single TAN is applied for the whole company. If separate TANs are applied for different divisions/branches, please fill details in (d). 2 For branch of Individual business/Hindu Undivided Family, please fill details in (f). 3 For branch of firm/Association Of Persons/Association Of Persons (Trust) / Body Of Individuals/Artificial Juridical Person, please fill details in (h). 4 * Delete whichever is inapplicable. Instructions for filling up Form 49B (a) Form is to be filled legibly in ENGLISH in BLOCK LETTERS and in BLACK INK only. (b) Each box, wherever provided, should contain only one character (alphabet/number/punctuation mark) leaving a blank box after each word. (c) Thumb impression, if used, should be attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp. (d) Deductors are required to provide details of Assessing Officer (TDS / TCS) in the application. These details can be obtained from the Income Tax Office. (e) The deductor/collector must fill up Area Code, AO Type, Range Code and AO Number. If the applicant is unable to determine the details, TIN F....
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....acilitation Centre (TIN-FC) may assist it in doing so. (f) Form should be filled up completely. (g) 'Designation of the person responsible for making payment/collecting tax' field is mandatory to fill up, wherever applicable. (h) The address of applicant should be an Indian Address only. Item No.Item DetailsGuidelines for filling up the form 1NameDeductor/Collector shall fill the details of its name depending on its category in only one of the fields 1 (a) to 1 (h) specified in the form. If deductor/collector fills details in more than one category, the application form will be rejected. 1 (a)Name - Central / State GovernmentCentral / State Government / Local Authority deductor/collector will fill up the name in this field. Name of Office is mandatory. Name of Organisation/Department/Ministry may be filled with relevant details. For example, if Directorate of Income Tax (systems) in Income Tax Department is applying for a TAN, it will fill the Name fields as: Name of Office : DIRECTORATE OF INCOME TAX (SYSTEMS) Name of Organisation : INCOME TAX DEPARTMENT Name of Department : DEPARTMENT OF REVENUE Name of Ministry : MINISTRY OF FINANCE Central/State Government/Local Authority D....
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....eductor/Collector - will select its appropriate entry by ticking in the relevant box for Central Government or State Government or Local Authority (Central Govt) or Local Authority (State Govt.). 1 (b)Name - Statutory / Autonomous BodiesName of Office is Mandatory. Relevant Box for Statutory Body or Autonomous Body is to be ticked by the deductor/collector. For example, if Bandra office of Brihanmumbai Municipal Corporation is applying for a TAN, it will fill the Name fields as: Name of Office : BRIHANMUMBAI MUNICIPAL CORPORATION, BANDRA Name of Organisation : BRIHANMUMBAI MUNICIPAL CORPORATION Statutory/Autonomous Bodies will select its appropriate entry by ticking in the relevant box. 1 (c)Name - CompanyIf the deductor/collector is a company (e.g. a bank), this point is applicable. It is mandatory to fill the 'Name of Company'. This category is to be filled by the company if it is applying TAN for the company as whole. In case company wants to apply different TANs for different divisions/branches point 1(d) should be filled. Name should be provided without any abbreviations. Different variations of 'Private Limited' viz. Pvt Ltd, Private Ltd, Pvt Limited, P Ltd, P. Ltd., P. Ltd a....
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....re not allowed. It should be 'Private Limited' or 'Limited' only. For example, Name of Company : ABC PRIVATE LIMITED Category of company- Deductor/Collector will select its appropriate entry by ticking in the relevant box. 1(d)Branch of a companyIf Branch/Division of a Company is applying for its separate TAN, it will mention the Name and Location of the Branch (in whose name TAN is sought) in this field. Different Branches of a company applying for separate TANs will fill this field. For example, Cement Division of ABC Private Limited located at Andheri will fill as: Name of Company : ABC PRIVATE LIMITED Name of Division : CEMENT DIVISION Name/Location of Branch : ANDHERI BRANCH OR, ABC Bank of India - Nariman Point Branch, Mumbai will be written as: Name of Company : ABC BANK OF INDIA Name of Division .. Name/Location of Branch : NARIMAN POINT BRANCH, MUMBAI Category of a company - Deductor/Collector will select its appropriate entry by ticking in the relevant box. 1 (e)Name - Individual/Hindu Undivided Family (Karta)First Name is Mandatory. Name of the deductor/collector should be written in full and not in abbreviated form. As an exception, very large Middle names may be abbrev....
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....iated. Name should not be prefixed with Shri, Smt., M/s, Kumari, Late, Major, Dr., etc. In case name is prefixed with Title, application may be rejected. Individuals/ HUFs (Karta) must state their full expanded name and fill in the appropriate fields for Last, Middle or First Name. For example, Dinesh Kumar Garg will be written as: Last Name/Surname First Name Middle Name GARG DINESH KUMAR Or, if middle name is not there, it will be left blank. For example, Gunjan Bansal will be written as : Last Name/Surname First Name Middle Name BANSAL GUNJAN If a Sole Proprietor/HUF wants to obtain a single TAN in his/her name for all businesses run by him/her/it, then he/she/it shall fill name in this field. Deductor/Collector will select its appropriate entry (i.e. Individual / Hindu Undivided Family) by ticking in the relevant box. Individual shall select its appropriate entry by ticking in the relevant box for 'Shri', 'Smt', 'Kumari'. HUF will leave the mentioned fields blank. 1(f)Branch of Individual Business(Sole Proprietorship concern)/ Hindu Undivided Family (HUF)This field will be filled only if TAN is being applied for branch of Individual Business (Sole Proprietorship Concern)/Hindu....
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.... Undivided Family. Other Title (Dr. Late, Smt etc.) related rules given in Item No. 1(e) will be applicable here also. In case an Individual/HUF wants to obtain separate TANs for different businesses being run by him/it, this category will be applicable. Hence, the name of the concern will be filled in the field for Name/Location of Branch. Name of Branch should be entered in the relevant field. For example, Last Name/Surname First Name Middle Name KOHLI BHUWAN Name/Location of Branch : WELLWORTH BOOK HOUSE Deductor/Collector will select its appropriate category (i.e. Individual / Hindu Undivided Family) by ticking in relevant box for Individual or Hindu Undivided Family 1 (g)Firm/Association of persons/ Association of persons (Trusts)/ Body of Individuals/Artificial Juridical Person.The Name of the Firm/Association of persons/Association of persons (Trusts)/Body of Individuals/Artificial Juridical Person will be written in full in the field provided. 1(h)Branch of Firm/Association of Persons/Association of Persons (Trusts)/Body of Individuals/ Artificial Juridical PersonIf different branches of a firm are applying for separate TANs, this category is applicable. The Name of Firm/ A....
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....OP/etc. will include the description of the branch. Name of Branch should be entered in the relevant field. For example, Name of Firm : SHAH & COMPANY Name/Location of Branch : FORT BRANCH 2AddressDeductor/Collector shall mention the address of the location where the tax is being deducted. It is compul- sory for the deductor/collector to mention at least two details out of four ie (Flat/Door/Block No., Name of Premises/Building/Village, Road/Street/Lane/Post Office and Area/Locality/Taluka/Sub Division). Town/City/ District, State, Union Territory and PIN Code are mandatory. The applicant should not mention a foreign address. 2Telephone Number and e-mail ID(1) If Telephone Number is mentioned, STD Code is mandatory, (2) In case of mobile number, country code should be mentioned as STD Code. STD Code Telephone No. Where '91' is the country code of India. (3) It is mandatory for applicants to mention either their telephone number or an e-mail id so that they can be contacted in case of any discrepancy in the application form. (4) Applicants may provide their valid e-mail IDs for receiving intimation about the status of their application through e-mail 3Nationality of Deductor/Collect....
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....orThis field is mandatory for all categories of deductor/collector. 4Permanent Account Number (PAN)Deductor/Collector will mention the existing 10-digit Permanent Account Number allotted to it, if any, else leave this field blank. 5Existing Tax Deduction Account Number (TAN)If a deductor has existing TAN in old format, it will mention the same in this field. 6Existing Tax Collection Account Number (TAN)If a collector has Tax Collection Account Number in the old format, it will mention the same in this field. GENERAL INFORMATION FOR TAN APPLICANTS (a) Deductor/Collector can obtain Form 49B in the format prescribed by Income Tax Department from TIN-FCs, any other stationery vendor providing such forms or freely download it from NSDL website (www.tin-nsdl.com) or from Income Tax Department website (www.incometaxindia.gov.in) (b) The fee for processing of TAN application to be paid to TIN-FCs is Rs. 50/- (Plus service tax, as applicable). (c) In case the applicant has already been allotted a ten digit alphanumeric TAN, it will not apply again as having or using more than TAN is illegal. However, different branches/divisions of a deductor/collector may apply for separate TAN for eac....
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....h branch/ division. (d) In case deductor/collector has already been allotted TAN and wants any change in particulars (e.g. name, address etc.), it can fill up 'Form for changes for Correction in TAN data for TAN allotted' and submit the same at any TIN-Facilitation Centre. (e) Deductor/Collector will receive an acknowledgment containing a 14 digit unique number from the TIN-FC on submission of Form 49B. This acknowledgment number can be used by the deductor/collector for tracking the status of its application. (f) For more information Visit us at http:\\ www.tin-nsdl.com Call TIN Support Desk at 022- 24994650 e-mail us at [email protected] Write to : National Securities Depository Limited, A Wing, 3rd Floor, Trade World, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400 013. Document 2 (iii) for Form No. 27D, the following Form shall be substituted, namely:- "FORM NO.27D [See rule 37D] Certificate under section 206C of the Income-tax Act, 1961 for Tax collected at source Name and address of the Collectee Name and address of the Collector PAN of the Collector TAN of the Collector Address. City. CIT(TDS) PAN of the Collectee Assessment Year P....
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....eriod From To ...Pin code.. Amount received/debited Summary of receipt Nature of receipt Summary of tax collected at source Quarter Receipt Number of original quarterly statements of TCS under Amount of tax collected in respect of the collectee proviso to sub-section (3) of section 206C Date of receipt/debit Amount of tax deposited/remitted in respect of the collectee I. DETAILS OF TAX COLLECTED AND DEPOSITED IN THE CENTRAL GOVERNMENT ACCOUNT THROUGH BOOK ENTRY (The Collector to provide payment wise details of tax collected and deposited with respect to the collectee) S. No. Tax Deposited Book identification number (BIN) in respect of the collectee (Rs.) BAMS Number given by PAO/CDDO/TO DDO Sequence Number in the Book Adjustment Mini Statement Date on which tax deposited (dd/mm/yyyy) Total II. DETAILS OF TAX COLLECTED AND DEPOSITED IN THE CENTRAL GOVERNMENT ACCOUNT THROUGH CHALLAN (The Collector to provide payment wise details of tax collected and deposited with respect to the collectee) S. No. Tax Deposited in respect of the collectee (Rs.) BSR Code of the Bank Branch Total Challan identification number (CIN) Date on which tax dep....
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....osited (dd/mm/yyyy) Challan Serial Number I, ……………………….., son/daughter of Verification ……......working in the capacity of . .[Rs. . (designation) do hereby certify that a sum of Rs.………………………………….. ..(in words)] has been collected at source and deposited to the credit of the Central Government. I further certify that the information given above is true, complete and correct and is based on the books of account, documents, TCS statements, TCS deposited and other available records. Place Date Designation: Signature of person responsible for collection of tax Full Name: Notes: 1. Government collectors to fill information in item I if tax is paid without production of an income-tax challan and in item II if tax is paid accompanied by an income-tax challan. 2. Non-Government collectors to fill information in item II. 3. In item I and II, in the column for TCS, give total amount for TCS, Surcharge (if applicable) and education cess. 4. The collector shall furnish the address of the Commissioner of Income-tax (TDS) having ....
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....jurisdiction as regards TCS statements of the assessee. 5. This Form shall be applicable only in respect of tax collected on or after 1st day of April, 2010.". Notification No. 41/2010 [F.No. 142/27/2009-SO(TPL)] (Rajesh Kumar Bhoot) Director (Tax Policy and Legislation) Note. The principal rules were published vide, Notification No. 969(E), dated the 26th March 1962 and last amended by the Income-tax (5th Amendment) Rules, 2010 vide Notification S.0.1211 (E) dated 21st May, 2010.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....