1. TAX DEDUCTION AT SOURCE (INCOME TAX ON SALARY) FOR GOVT. PROCESS Presented by HMINGTHANGA KIPGEN CAISIAS RESEARCH & CONSULTING TIN-FACILITATION CENTRE (Under Income Tax Department) Managed by NSDL

2. FIRST SESSION

3. LEARNING OBJECTIVES Summary of TDS (Income Tax on Salary) Workflow of Tax Payment Payment of Tax (with GAR – 7) Verification of Tax Payment Workflow of TDS Income Tax on Salary – Computation of Salary

4. SUMMARY OF TAX DEDUCTION AT SOURCE Summary of section 204(iv) Any person, on behalf of Central Government or State Government, MAKING PAYMENT for the purpose u/s 192 of the Act, is known as the “Persons responsible for paying”. Summary of section 192 to 194 Any PERSON RESPONSIBLE for making payment under the Head “as in Section 192 to 194” shall at the TIME OF PAYMENT, Deduct Income-Tax on the amount payable.

5. RESPOSIBLE PERSON PERSON/PARTY RECEIVING PAYMENT DRAWING & DISBURSEMENT OFFICER EMPLOYEES, CONTRATORS, SERVICE PROVIDER, OTHER BENEFICIARIES etc..

6. WORKFLOW (u/s 204(iv), 192 to 194) Net Payment Payment Income Tax Employees/Deductees Govt Revenue DDO/Responsible Person

7. BOOK ADJUSTMENT/TRANSFER CREDITBANK DEPOSIT GAR 7 CHALLANITNS 281 CHALLAN ACCOUNT OFFICE (TREASURY)BANK CENTRAL BOARD OF DIRECT TAX INCOME TAX (TDS) Only for Govt. Deductor (Offices) Both Govt. and Non-Govt. office

8. PAYMENT OF TAX (with GAR – 7) DDO Shall prepare: –Payroll or other bills showing IT Deductions –IT Deduction should be accompanied by GAR-7 GAR-7 for IT deductions shall include: –Total Deductions –Office TAN Number –Office DDO Registration Number –DDO Code –Type of Income Tax (TDS (Salary), TDS (Non-Salary) or TCS) –Head of Accounts,. etc

9. Head of Accounts (TDS through Treasury Office) –Major Head :Suspense Account (8658) –Minor Head:TDS Suspense (112) 865800112000000 Income Tax should be Credited to CBDT (Central Board of Direct Tax) HEAD OF ACCOUNTS FOR TDS/TCS

10. REPORTING OF TAX PAYMENT BY TREASURY OFFICES TREASURY OFFICE Shall: –Maintain records of Tax Deducted/Collected reported by DDO –Prepare monthly statement called Form 24G and report to Income Tax Department through an Authorised Tax Information Network Facilitation Center (TIN-FC) on or before 10 th Day of every month. Form 24G shall include: –TAN Number of each Offices (DDO) –Name of each offices –Amount of Tax deducted/collected by DDOs –Type of Tax (TDS (Salary), TDS (Non-Salary) or TCS)

11. Contd.. Responsibility of Treasury: –Filing of monthly Form 24G Statement –Inform BIN Details to each DDOs Defaults: – If the PAO/CDDO/TO etc, fails to deliver the statement as required u/s 200(2A), he will be liable to pay, by way of penalty, under section 272A(2)(m), a sum which shall be Rs.100/- for every day during which the failure continues. However, the amount of such penalty shall not exceed the amount of tax which is deductable at source. Treasury Office Form 24G TIN - FC BIN Number

12. CONFIRMATION OF TAX PAYMENT DDO can verify the Tax payment or BIN: BIN details or Payment of Tax through Treasury can be confirm using NSDL online BIN Verification utilities NSDL Website: https://onlineservices.tin.egov-nsdl.com/TIN/JSP/etbaf/ViewBIN.jsp

15. INCOME TAX (TDS) WORK FLOW Payment Deductor/Employer Net Payable Income Tax Payment Treasury or Bank Employee/ Deductees 1.Payment to Assessee 2.Tax deduction 3.Tax Payment Return Filing/ Reporting Income Tax Department Employee/ Deductees Tax Deduction Certificate (Form 16A or 16) 12 3

16. TAX PAYEE DEDUCTORS ACCOUNT OFFICES PAN TAN AIN ITR 24Q / 26Q 24G Annually Quarterly Monthly ITR-V Token & Receipt Nos. BIN Details TDS Process – Book Adjustment (only for Govt. Deductors) ENTITY TYPEIDENTIFICATIONRETURN TYPEPERIODICITYCOMPLAINCE PROOF

17. Information required for Return of Tax Account Office AIN Number Name of Account Office as per Income Tax TAN of Deductors DDO Regn. No DDO Code Name & Address of each DDOs TDS/TCS (amount) by each DDOs Type of Tax Deductor TAN Number Name of Office as per Income Tax PAN of DDO PAN of Deductees DDO Regn. No DDO Code AO AIN Number BIN/CIN Details Payment Details IT Deduction Details Previous filing Token (if TDS is filed in previous quarter)

18. Due Dates for Govt. Deductors QuarterPeriodDue Date Q1April – June31-July Q2July – September31-October Q3October – December31-January Q4January - March15-May DEPOSIT OF TAX TDS RETURN FILING BIN (for Govt. Deductors only)CIN (for Govt. and Non-Govt.) On the same day for which Sum is CreditedOn or before 7 th Day of corresponding month in which Sum is credited

19. INCOME TAX ON SALARY

20. Income Tax (Tax Slab) Sr. NoTotal Taxable Salary (Rs.)Income Rates 1Zero to 2,50,0000% 22,50,001 to 5,00,00010% 35,00,001 to 10,00,00020% 4 Above 10,00,00030%

21. CALCULATION OF INCOME TAX ON SALARY Net Aggregate Income : Rs. 6,00,000 (Less) Deduction U/s 80C, 80CCC, 80CCD(1):Rs. 1,50,000 (Max. Rs.1.5Lac) Other Section:Rs. 0 Taxable Income : Rs. 4,50,000 Income Tax:Rs. 20000 (Less) Tax Credit u/s 87A:Rs. 2000 Net Income Tax:Rs. 18000 (Add Edu. Cess 3%):Rs. 540 Gross Income Tax Liability:Rs. 18540 Tax SlabSalary DistributionRateIncome Tax 0 – 2500002500000%0 250001 – 50000020000010%20000 500001 – 1000000020%0

22. CALCULATION OF HRA EXEMPTION 1.Basic Salary – Rs. (5000x12) – Rs. 60,000/- 2.Dearness Allowance (D.A) – Rs. (5950x12) – Rs. 71,400/- i.e. Annual Salary = Rs. 1,31,400/- 3.House Rent Allowance (H.R.A.) – Rs. (3500x12) – Rs. 42,000/- 4.Actual Rent Paid – Rs. (4500x12) – Rs. 54,000/- The minimum of the following amount shall be exempt Actual HRA received (35,00x12) – Rs. 42,000/- Rent Paid in excess of 10% of salary (54,000-13,140) – Rs. 40,860/- 40% of Salary – Rs. 52,560/- From the receipt of HRA: Rs. 42,000/- received Rs. 40860/- is to be exempted and the balance Rs. 1140/- is Taxable.

23. THANK YOU

24. SECOND SESSION

25. CONSEQUENCES OF FAILURE TO DEDUCT OR PAY SECTION 201(1) of Income Tax Act expressly states that any person liable to deduct TDS on the income distributed, makes default in the deduction and/or payment of TDS, shall be treated “assessee in default” and penalty U/s 221 of Income Tax Act shall be payable by such assessee. SECTION 201(1A) “Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,— (i)at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii)at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

26. DEMANDS FOR DEFAULT Sr. No.Type of DefaultsUnder SectionRates 1Late Filing of eTDS Return234ERs. 200 per day 2 Late Deduction/Short Deduction/Non-Deduction of Tax 2011% Per Month 3Late Deposit of Tax2011.5% Per Month PENALTY(Under Section 271H) 1. Failure to submit TDS return within a year of the due date 2. Submission of incorrect details (such as PAN, Challan, TDS amount) in the statement filed Penalty of between Rs 10,000 (ten thousand) to Rs 1,00,000 (one lakh)

27. Sr. No.Type of Default 1Short Payment 2Short Deduction 3Interest on Payments Default u/s 201(1A) 3(a)Interest on Short Payment 3(b)Interest on Late Payment 3(c)Additional Late Payment interest against the processing of latest correction 4Interest on Deduction Default u/s 201(1A) 4(a)Interest on Short Deduction 4(b)Interest on Late Deduction 4(c)Additional Late Deduction interest against the processing of latest correction 5Late Filing Fee u/s 234E 5(a)Late Filing Levy 5(b)Additional Late Filling levy against the processing of latest correction 6Interest u/s 220(2)

28. Information for TDS Compliances Mandatory details for eTDS Filing and where to get them: 1.TAN (Tax Deduction Account Number):TIN-FC (offline) or NSDL Website (online) 2.PAN of Person Responsible:TIN-FC and PAN Center- (offline) NSDL Website or UTI Website- (online) 3.BIN/CIN Information:NSDL Website or TRACES website 4.AIN of Account office:Concern Treasury Offices 5.DDO Regn Number:NSDL CRA 6.PAN of Deductee:From Tax Payee (Employee/Contractor etc) 7.Payment details 8.Income Tax Deduction details 9.Previous eTDS Filing Token Number (if any) and 10.Calculation of Income Tax for Salary Employees in case of Annual Statement

29. TDS Reconciliation Analysis and Correction Enabling System GENERAL FEATURES 1.Statement Status 2.TDS Statement Justification Report 3.Consolidated File 4.Declaration of Non Filing of Statements (NIL Return) 5.Request for Resolution (Online Ticketing System) 6.Tax Credit status of Tax Payee 7.Form 16/16A ( TDS Certificates) 8.Online and Offline Correction Filing 9.Tracking of Challan/BIN Status 10.Validation of Certificate u/s 197 11.Digital Signature Certificate (in case of Correction through TRACES)

30. Tax Exemption Certificate (Certificate u/s 197 or 197A) Form No. 15G Declaration under sub-sections (1) and (1A) of section 197A of the Income-tax Act, 1961, to be made by an individual or a person (not being a company or a firm) claiming certain receipts without deduction of tax. Form No. : 15H Declaration under sub-section (1C) of section 197A of the Income-tax Act, 1961, to be made by an individual who is of the age of sixty years or more claiming certain receipts without deduction of tax Important Notes: 1)Tax Exemption/Lower Deduction Certificate u/s 197/197A should be verified through Income Tax TRACES Utilities. Cautionary measures show be taken so that expired Certificate are not used.

31. IMPORTANT WEBSITE Income Taxhttp://www.incometaxindia.gov.inhttp://www.incometaxindia.gov.in E-Filinghttp://www.incometaxindiaefiling.gov.inhttp://www.incometaxindiaefiling.gov.in TRACEShttp://www.tdscpc.gov.inhttp://www.tdscpc.gov.in NSDLhttps://www.tin-nsdl.comhttps://www.tin-nsdl.com

32. CAISIAS RESEARCH AND CONSULTING TAX INFORMATION NETWORK – FACILITATION CENTRE (TIN-FC) Managed by NSDL MV-106, MISSION VENG AIZAWL, MIZORAM – 796005 PH: 0389-2321164 MB: 9612503228 OUR CONTACT INFORMATION

33. THANK YOU