September 2025

1. Legal Status of Default Deductor becomes “Assessee in Default”for: Failure to deduct TDS or Failure to deposit deducted TDS 2. Financial Penalties A.  For Non-Deduction COMPONENT CALCULATION Principal Amount Equal to TDS not deducted Interest 1% per month from due date of deduction to actual deduction date B.  For Non-Payment After Deduction COMPONENT CALCULATION Principal Amount […]

1. Legal Basis for TDS Certificates Section 203of the Income Tax Act, 1961 mandates that every deductor must issue a TDS certificate to the deductee. Rule 31of the Income Tax Rules, 1962 prescribes the format, timelines, and details required in these certificates. 2. Types of TDS Certificates FORM NO. APPLICABLE FOR DUE DATE Form 16 Salaries (Section 192) 31st

1. Legal Basis and Purpose Section 203Amandates obtaining a 10-digit alphanumeric TAN for entities deducting/collecting tax. Rule 114Agoverns the application process, replacing the redundant Rule 114AA (w.e.f. 8-12-2004). 2. Application Process Form 49B: Primary application form (online/offline). Online: Via NSDL TIN portal. Offline: Submit duplicate copies to TIN-FC centers. New Companies: Can apply via Form INC-7during registration (e-Biz portal).

1. Legal Definition Primary Responsibility: The person legally obligated to deduct TCS/TDS under the Income Tax Act. Includes: Employers(for salaries) Banks/NBFCs(for interest payments) Clients(for contractor/professional fees) Tenants(for property rent) Buyers(for property/asset purchases) 2. Hierarchy of Responsibility SCENARIO RESPONSIBLE PERSON Corporate Payments Principal Officer (MD, CEO, CFO) Government Payments Drawing & Disbursing Officer (DDO) HUF/Partnership Karta/Managing

1. Core Principle (Tax Credit Mechanism) Shield for Taxpayers: When tax has been duly deducted at source (TDS)and deposited to the government, the Income Tax Department cannot demand the same tax again from the recipient (assessee). Objective: Prevents double taxationon the same income. 2. Conditions for Protection For Section 205 to apply: TDS must be correctly deductedas per applicable rates.

1. Legal Requirement Section 206Amandates specified entities to file statements for payments made to residents without TDS deduction (when normally deductible under Chapter XVII-B). Rules 31AC & 31ACAprescribe the format, frequency, and procedure. 2. Applicability Who Files?: Banks/NBFCs (interest payments) Companies/LLPs (dividends, professional fees) departments (contract payments) Threshold Exemption: Only if aggregate payments exceed: ₹50,000(for interest under Section 194A) ₹1,00,000(for

1. Core Rule (Strict Liability) No PAN = Higher TDS/TCS: TDS rate: 20%(instead of normal rate) TCS rate: Twice the normal rateor 5% (whichever is higher) Applies even if: Payment is below TDS threshold Recipient is eligible for lower/NIL deduction under DTAA 2. Applicability All Transactionsrequiring TDS/TCS under: Salaries (192) Interest (194A) Professional fees (194J) Rent (194I) E-commerce (194-O)

1. Overview Introduced: Finance Act 2021 (effective from 1st July 2021) . Purpose: Encourage tax compliance by imposing higher TDS rateson individuals/businesses who fail to file income tax returns (ITRs) despite significant TDS/TCS deductions. Budget 2025 Update: Proposed for omission(effective 1st April 2025) to reduce compliance burdens. 2. Key Provisions A.  Applicability Applies to “Specified Persons”: Non-filers: Failed to file

The Income Tax Act, 1961, provides specific cases where TDS is not required to be deducted, even if the payment would normally attract TDS. Below are key exemptions: 1. Payments Below Threshold Limits TDS is not applicable if the payment amount is below the specified threshold for that income type: Interest (Section 194A): ₹50,000(for non-seniors) / ₹1,00,000 (for seniors ≥60) from