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TDS Query

Hakim (20 Points)

14 December 2007

Our client has deducted TDS on freight of Freight Carrier. Now as we know from 1st October department has made compulsory to quote PAN number of persons of whom tax has deducted. Now question is Client has already deducted TDS of carriers who dont have PAN number and while submission of Electronic return PAN number is compulsory so i m not able to prepare FUV file because of no PAN available. In this case what will our status and in what way we can file return?

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13 Replies

Sahana (Service) (81 Points)
Replied 14 December 2007

I have a similiar query - in the case of a construction company where there are several labour contractors (many small time contractors) who do not have PAN numbers, can any one suggest a very practical solution for compliance to TDS return filing. - Tax has been deducted & paid, but return filing is pending for want of PAN numbers of the contractors.

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(Guest)

kindly suggest proper soluation

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 15 December 2007

Mr. Raghunathan Some times it is found that Labour Sardar (Leader) represents the group of Labours and he collects payment of wages from Contractor on behalf of Labours. Though some contractors treat the same as sub-contract, but I think there is scope of debate that whether Labour Sardar (Leader) will be treated as sub-contract or not?

CA vikash Jain (CHARTERED ACCOUNTANT) (300 Points)
Replied 15 December 2007

you can file return with the PAN no you have with you, and afterwards you can file revised return when you get the PAN no of all the person. this way you are not violating the law for submission of return in time also you are matching the tax deposited by you in bank.

(Guest)

sir, should tds be deducted on bills for travel-air if so at what %

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Gagan Gupta (Chartered Accountant) (161 Points)
Replied 24 December 2007

You can fill this PAN no. FFFF99999F This PAN no. is suggested by some TDS Return software

Sahana (Service) (81 Points)
Replied 01 January 2008

Dear Mr. Gagan Gupta, Quite interesting. But can you give me the circular reference for this suggested solution. Would be much thankful to you. Raghunathan.

Sahana (Service) (81 Points)
Replied 01 January 2008

Mr. Vikas Jain, But to file form 26q we must ensure that atleast 70% of the contractors have PAN no. and the same is correctly mentioned in the return. My query is how to file the returns when this minimum 70% is not possible. In real ground situtations though many small time contractors do not have PAN, we will have to engage them.

CA vikash Jain (CHARTERED ACCOUNTANT) (300 Points)
Replied 03 January 2008

Mr. Raghunathan in case of small time contractors you can use one common Pan no.for many person taking from any one contracor his PAn no if he agrees, and if other contractor are not filling there return or claiming certificates, this is also an tax planning procedure for some person too. or you can take certificate from these person for low deduction or no deduction, then if you put in last colomn of the software as A or B in the field low deduction , then also even if you have minmum PAN no you can file the return

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 03 January 2008

Mr. Vikash Do you think it is advisable to use single PAN for different contractors? Why the Contractor having PAN will agree? Where is the tax planning here? Somebody has suggested me a better idea in such a situation:- 01. Deduct TDS as per provisions of the Act. 02. Deposit taxes separately for contrcators without PAN. 03. Do not record such TDS in TDS Returns. 04. Whenever you get their PAN file the revised TDS retuirn. 05. Inform the assessing officer vide a regsitered letter. What is your comment on this?

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CA vikash Jain (CHARTERED ACCOUNTANT) (300 Points)
Replied 03 January 2008

Sir, your point 1 & 2 is correct but for point no 3 i donot agree as in tin system when you deposit any TAX it will come under your TAN so my suggestion is record the tax deposited by you in your return you can use upto 30% those person from whom you donot have PAN this way your are not hiding anything and when you had the Reuired PAN you can revised it.

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 04 January 2008

Mr. Vikash
I admire your expertise in field of TDS. My submission is as follows:-
There are separate provisions of tax deductions and return filings. As regards deduction of Taxes, there is no compulsion of PAN. As regrds submission of Return, such condition have been imposed. Is there any change in the Act, saying that no Contrcat/ payment can be given to the person who is not having PAN?or, is there any provision in the Act that a person without having PAN can not do business? I think as per Act there is no such bar and if it is so, I guess that such notification will not sustain in court of Law.
Hence, deductor whose good nos. of deductees are not having their PAN, has only two legal options:-
a) File the return showing the details of TDS deducted from PAN holders only.
b) Do not file the return.

I can not appreciate any unethical mode.

Sahana (Service) (81 Points)
Replied 09 January 2008

Mr. Vikas, I too agree with Mr. Agarwal on ethical practices. But it appears that we have no way out in the situation. May be the issue has to be deliberated by all and the concernced authorities appraised of the actual situation for an effective clarification on the issue. In the meantime, if any solution comes your way please keep me informed. Thanks