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TDS Query

swohra (none) (537 Points)

17 January 2011

Dear Members

Should I deduct TDS @ 20% (PAN is not quoted) in case where amount liable for TDS is below threshold limit but payee has no PAN?

Thanks in advance..

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14 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 17 January 2011

If below from threshold limit than no need to deduct tds.

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rachit jain (chartered accountant ) (635 Points)
Replied 17 January 2011

yes you have to deduct 20% tds

sainath (student) (43 Points)
Replied 17 January 2011

since if the amount is below the limit as prescribed, then there is no need of deduction of TAX from the payment.

Since there is no TDS the question of PAN available or Not available doesnot arise.

SUNIL GARG (CHARTERED ACCOUNTANT) (175 Points)
Replied 17 January 2011

Dear Swohra,

Sainath is absolutely right.

When the payment amt. is less than the threshold limit, then there is no liability to deduct TDS, hence there should not be any question regading rate.

But if you are still deducting tax of that person, then in my personal view, it should be 20% (to be on the safe side).

1 Like

CA CMA CS Ram Pavan Kumar Melam (CA) (6980 Points)
Replied 17 January 2011

TDS chapter applicable only when the payment exceeds the threshold limit. This clarification is in agreement with views of Mr. Pankaj, Mr. Sainath and Mr. Sunil

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ashish bahadur (Account Assistant) (23 Points)
Replied 21 January 2011

i am 61 years old person, retired from Corporation where no pension scheme apply. In F.Y. 2010-11, i have no received from my ex-employer but in Jan. 2011 arrears from last 14 years will be received and arrear amount expected Rs. 250000/-. But employer deduct TDS on arrear by 10%. Can i exempt from TDS and in this year i invest Rs. 75000/- on LIC. Please suggest can i submit Form 15G for non deducted of TDS.

Pankaj Arora (Learner) (3134 Points)
Replied 21 January 2011

Yes you can submit.

CA CMA CS Ram Pavan Kumar Melam (CA) (6980 Points)
Replied 22 January 2011

Since you are a past employee of the Corporation, the amount received towards arrears will be treated as income under the Head Salaries as per the Income Tax Act, 1961.

The rate of tax applicable to you for the financial year 2010-11 is as applicable to the other individuals ie.

Income Range (Rupees)		Rate of Tax
From	To	Rate of Tax
0	160,000	Nil
160,000	500,000	10%
500,000	800,000	20%
8,00,000	Infinite	30%

Surcharge: Nil

Education cess: Levy of 2% towards ‘Education cess’ is applicable on Income tax and surcharge.

Secondary and Higher Education cess: Levy of 1% towards ‘Secondary and Higher Education cess’ is applicable on Income tax and surcharge.

Based on the inputs given by, the tax charge may be computed as below:

Arrears of salary	250,000
Less: Deductions u/s 16
- Professional tax	-
Income under the head salaries	250,000

Income from other sources	-
Total Income	250,000
Less: Deduction under chapter VI-A
- Section 80C	75,000
Total Income	175,000
Tax thereon (175,000 - 160,000) x 10%	1,500

However, you may claim relief under section 89(1) of the Income Tax Act, 1961.

Attached File : 44 tax computation.xls downloaded: 179 times

Shrinaath Paravasthu (Articles) (62 Points)
Replied 24 January 2011

The Service provider does not quote his PA No in his invoices , but the company got a statement from the provider certifying his PA No . Section 206 AA mentions that all vouchers , invoices & correspondances should mention PA No . Now at what rate Tax has to be deducted - 20 % or 10 % (Professional) ,considering the intention behind the section of obtaining PA No is satisfied by the company.

CA CMA CS Ram Pavan Kumar Melam (CA) (6980 Points)
Replied 24 January 2011

As you have PAN, should deduct only 10% though not quoted on the Invoice. You may insist the service provider for change / revising of the Invoice. Or even you may put their PAN on the invoice, since you have the information. Nothing big deal in this.