Updates On TDS


Tds refunds in case of cancelled property deals . ( Sec.194 IA )


In case of contract of purchases the property of more than 50 Lac. It is mandatory  to deduct the Tds and pay to the govt exchequer simultenues with the payment to the purchaser. On several occasions deal get cancelled in midway. In such situation what will be the status of the TDS paid? Who can claim the credit / refund of this TDS?

The purchaser cannot  claim the refund because

Refund of TDS  paid U/s.194 IA is big challenge, Rather it is a big loophole in the whole scheme. Normally tax is deducted while making payment to the seller and paid within 7 days of the following month. In most cases people prefer to pay it immediately. 



Issuing form No 15G & 15H can bring you in great difficulties.


The CPC TDS has issued a circular to all banking companies to incorporate all payments of interest made by them on form no 15H & 15G i.e without deduction of tax. As per law of Income tax form no 15G & 15H can be issued only in case when the total income including the interest in bank in less than taxable limit. 

The person issuing form no 15H & 15G in spite of having taxable income will amounts to false declaration which has dire consequences including prosecution by including the information of form 15G & 15H in TDS return department has data ready with them. So they can catch Tax evaders very easily.



Non-resident referred to in Section 194LC will not be penalised for not having a PAN


By virtue of Section 206AA, if PAN of the recipient is not available, tax is deductible either at the normal rate or at the rate of 20%, whichever is higher.


However under the amended provisions of Section 206AA, in respect of payment of interest on long-term infrastructure bonds to a non-resident (as referred to in Section 194LC), tax will be deducted at the normal rate of 5%, even if the non-resident-recipient does not have PAN.


Read all the case laws here



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