Notification on no surcharge and cess on TDS u/s 194C
This query is : Resolved
04 February 2010
Dear Experts,
Some of my clients are still dedcuting TDS u/s 194C inclusive of surcharge and cess. They say that since there is not notification/Circular on the removal of surcharge and cess from TDS, they will continue to deduct the same along with the rates specified in the section.
Kindly let me know of any Circular or Notification issued in this regard or any section reference in the Income Tax Act (as amended by the finance act 2, 2009), as i was not able to search the same even in the bare act/rules. Kindly help.
Some of my clients are still dedcuting TDS u/s 194C inclusive of surcharge and cess. They say that since there is not notification/Circular on the removal of surcharge and cess from TDS, they will continue to deduct the same along with the rates specified in the section.
Kindly let me know of any Circular or Notification issued in this regard or any section reference in the Income Tax Act (as amended by the finance act 2, 2009), as i was not able to search the same even in the bare act/rules. Kindly help.
04 February 2010
Please refer "Rationalisaion of provisions relating to tax deduction at source (TDS)"
you can visit http://indiabudget.nic.in/ub2009-10/memo.htm
and select memorandum Part I - ENglish version
you can visit http://indiabudget.nic.in/ub2009-10/memo.htm
and select memorandum Part I - ENglish version
04 February 2010
The link for the Union Budget is fine but they want an explicit notification or section reference from the act.
03 August 2024
Under the Income Tax Act, as amended by the Finance Act 2, 2009, there were changes regarding the inclusion of surcharge and cess in the calculation of TDS (Tax Deducted at Source). Specifically, these changes affected the applicability of surcharge and cess on TDS rates under section 194C and other relevant sections.
### **Key Points:**
1. **Changes Post-Finance Act 2, 2009:**
- The Finance Act 2, 2009, introduced amendments that clarified that TDS should be deducted at the rates specified in the Income Tax Act without including surcharge and cess. This means that the TDS rates provided in the Act are to be applied directly without additional surcharge and cess.
2. **Relevant Notification and Circular:**
- **Notification No. 36/2010** - This notification, dated 23rd June 2010, clarifies the rate of TDS to be deducted under various sections, including section 194C. It confirms that the TDS rates specified in the Act are to be applied without the addition of surcharge and cess.
- **Circular No. 2/2010** - Issued by the Central Board of Direct Taxes (CBDT), this circular provides clarification on the rate of tax deduction at source and confirms that surcharge and cess are not to be included in the TDS rates.
### **Specific Sections and References:**
- **Section 194C**: Relates to TDS on payments to contractors and sub-contractors. The section specifies the rate of TDS applicable, which is to be applied without the addition of surcharge and cess.
- **Finance Act 2, 2009**: This act includes amendments that clarified the removal of surcharge and cess from TDS calculations.
### **Summary:**
- **Notification for TDS Rates (Including Surcharge and Cess)**: **Notification No. 36/2010**, dated 23rd June 2010.
- **Circular Clarification**: **Circular No. 2/2010** provides clarification that TDS should not include surcharge and cess.
### **Actionable Steps:**
1. **Refer to the Notifications and Circulars:** Provide your clients with a copy of **Notification No. 36/2010** and **Circular No. 2/2010** to demonstrate the official clarification regarding the removal of surcharge and cess from TDS.
2. **Direct Reference:** You can access these documents on the official [CBEC-GST website](https://cbec-gst.gov.in) or consult the [Income Tax Department's website](https://incometaxindia.gov.in) for the latest updates and official circulars.
3. **Update Compliance:** Ensure that your clients update their TDS deduction practices in line with the clarified rates to avoid any compliance issues.
By referencing these notifications and circulars, your clients can correctly apply the TDS rates without surcharge and cess, in accordance with the latest legal requirements.
### **Key Points:**
1. **Changes Post-Finance Act 2, 2009:**
- The Finance Act 2, 2009, introduced amendments that clarified that TDS should be deducted at the rates specified in the Income Tax Act without including surcharge and cess. This means that the TDS rates provided in the Act are to be applied directly without additional surcharge and cess.
2. **Relevant Notification and Circular:**
- **Notification No. 36/2010** - This notification, dated 23rd June 2010, clarifies the rate of TDS to be deducted under various sections, including section 194C. It confirms that the TDS rates specified in the Act are to be applied without the addition of surcharge and cess.
- **Circular No. 2/2010** - Issued by the Central Board of Direct Taxes (CBDT), this circular provides clarification on the rate of tax deduction at source and confirms that surcharge and cess are not to be included in the TDS rates.
### **Specific Sections and References:**
- **Section 194C**: Relates to TDS on payments to contractors and sub-contractors. The section specifies the rate of TDS applicable, which is to be applied without the addition of surcharge and cess.
- **Finance Act 2, 2009**: This act includes amendments that clarified the removal of surcharge and cess from TDS calculations.
### **Summary:**
- **Notification for TDS Rates (Including Surcharge and Cess)**: **Notification No. 36/2010**, dated 23rd June 2010.
- **Circular Clarification**: **Circular No. 2/2010** provides clarification that TDS should not include surcharge and cess.
### **Actionable Steps:**
1. **Refer to the Notifications and Circulars:** Provide your clients with a copy of **Notification No. 36/2010** and **Circular No. 2/2010** to demonstrate the official clarification regarding the removal of surcharge and cess from TDS.
2. **Direct Reference:** You can access these documents on the official [CBEC-GST website](https://cbec-gst.gov.in) or consult the [Income Tax Department's website](https://incometaxindia.gov.in) for the latest updates and official circulars.
3. **Update Compliance:** Ensure that your clients update their TDS deduction practices in line with the clarified rates to avoid any compliance issues.
By referencing these notifications and circulars, your clients can correctly apply the TDS rates without surcharge and cess, in accordance with the latest legal requirements.
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