{"id":177,"date":"2021-03-30T09:57:17","date_gmt":"2021-03-30T09:57:17","guid":{"rendered":"http:\/\/wpcharming.wpengine.com\/humanrights\/?p=177"},"modified":"2021-03-31T14:25:13","modified_gmt":"2021-03-31T14:25:13","slug":"hr-firm-awards-announced","status":"publish","type":"post","link":"https:\/\/sfsadvisors.co.in\/?p=177","title":{"rendered":"Amendments in TDS\/TCS Provisions per Union Budget 2021-22"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]The\u00a0 Finance\u00a0 Bill,\u00a0 2020\u00a0 includes\u00a0 many\u00a0 provisions\u00a0 relating\u00a0 to\u00a0 amendment\u00a0 and changes in various TDS and TCS provisions and further introduced many new TDS and TCS provisions in the statute.<\/p>\n

In this article we are focusing on following four major amendments as proposed per the Budget 2020-21:<\/p>\n

    \n
  1. Dividend paid by SPV to Business trusts<\/li>\n
  2. TDS on payment made to FII<\/li>\n
  3. Insertion of section 194Q<\/li>\n
  4. Higher rate of TDS for non-filing of return of Income.<\/li>\n<\/ol>\n

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    1. Section 194- TDS on Dividends:<\/h2>\n\t\t<\/span>\n\t<\/div>[vc_column_text]<\/p>\n

    Provision relating to deduction of TDS on Distribution of Dividend was\u00a0introduced and made effective from April 1, 2020 by withdrawing DDT in\u00a0the Finance Act, 2020. Thus, dividend became taxable in the hands of the\u00a0recipient. The second proviso to section 194 stated that this section shall\u00a0not apply if the dividend is paid to insurance company or insurers. The\u00a0Finance Bill 2021 now proposes to extend this benefit also to business\u00a0trusts and states that if any dividend is paid\/credited to a business trusts
    \nestablished for special purpose vehicle, no TDS shall be deducted. Thus,\u00a0SPV is not required to deduct TDS on payment of Dividend to business\u00a0trusts. This is retrospective amendment from AY 2020-21. Further, TDS\u00a0will not be deducted in case of payments made to any other person as may\u00a0be notified by Government.<\/p>\n

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    2.Section 196D- TDS on Income of FII from securities:<\/h2>\n\t\t<\/span>\n\t<\/div>[vc_column_text]<\/p>\n

    The section has been modified to rationalise the provision concerning\u00a0withholding on payments made to Foreign Institutional Investors (FIIs).\u00a0Accordingly, it is proposed to insert a proviso to subsection (1) of section\u00a0196D of the Act to provide that in case of a payee to whom an agreement\u00a0referred to in section 90(1) or section 90A(1) applies and such payee has\u00a0furnished the Tax Residency Certificate as required section 90(4) or section\u00a090A(4) of the Act, then the tax shall be deducted at the rate of 20% or\u00a0rate\/rates of income tax provided in such agreement for such income,\u00a0whichever is beneficial to FII.<\/p>\n

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    3.Section 194Q- TDS on Purchase of goods over a limit:<\/h2>\n\t\t<\/span>\n\t<\/div>[vc_column_text]In\u00a0 the\u00a0 last\u00a0 Finance\u00a0 Bill,\u00a0 section\u00a0 206C(1H)\u00a0 was\u00a0 introduced\u00a0 according\u00a0 to which seller was required to collect TCS on sale of goods and this year, a new section 194Q, being TDS on purchase of goods on the similar lines is proposed to be introduced.[\/vc_column_text][vc_column_text]a) A buyer, who is responsible for paying any sum to resident (referred as \u201cseller\u201d) for purchase of any goods of the value\/ aggregate of such value.\u00a0exceeding in a previous year of\u00a0\u00a050 lakhs, shall deduct 0.1% (5% in case of No PAN\/ Aadhaar cases) of such sum exceeding\u00a0 50 Lakhs as income tax,<\/p>\n

    b) A buyer means a person whose total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees during the financial year immediately preceding the financial year,<\/p>\n

    c) If the amount is credited to any account by whatever name called, these provisions shall apply,<\/p>\n

    However, the Central Government may, by notification in the official Gazette, specify for this purpose, subject to conditions as prescribed in such notification shall be exempted from TDS,
    \nIt is also stated that if the transaction is covered for TDS\/TCS under any provision\u00a0 of\u00a0 the\u00a0 Act\u00a0 and\u00a0 has\u00a0 deducted\u00a0 such\u00a0 amount,\u00a0 they\u00a0 shall\u00a0 be exempted from this provision. Further, if the transaction also falls in the purview of section 206 C (1H) then section 194Q is given preference and Buyer shall be responsible for deducting tax.<\/p>\n

     <\/p>\n

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    4.Section 206AB and Section 206CCA \u2013 Higher rate of TDS\/TCS for non- filing of return of income:<\/h2>\n\t\t<\/span>\n\t<\/div>[vc_column_text]As\u00a0 per\u00a0 section\u00a0 206AA,\u00a0 a\u00a0 higher\u00a0 rate\u00a0 of\u00a0 TDS\/TCS\u00a0 was\u00a0 deducted\u00a0 if\u00a0 the recipient\/payee failed to submit PAN\/Aadhar cases. New Sections 206AB and Section 206CCA have been proposed in the Finance Bill, which will require\u00a0 that\u00a0 the\u00a0 Deductor\/Payer\u00a0 will\u00a0 also\u00a0 have\u00a0 to\u00a0 ensure\u00a0 while\u00a0 making payment that the \u201cspecified person\u201d has also filed the Return of Income for the last two financial years, immediately prior to the financial year in which payment is made. In case of non-filing of Return income, by such resident deductee where the time limit under Section 139(1) has expired and the aggregate TDS and TCS is \u20b950,000ormoreineachofthesetwoprevious years,\u00a0 then\u00a0 the\u00a0 TDS\/TCS\u00a0 will\u00a0 have\u00a0 to\u00a0 be\u00a0 deducted\u00a0 at\u00a0 higher\u00a0 of\u00a0 the following rates as applicable under that Section in which payment is made:<\/p>\n

    a)\u00a0 At twice the rate specified in the relevant provision of the Act, or
    \nb) At twice the rate or rates in force, or
    \nc) At the rate of five percent.<\/p>\n

    CPC\/Government\u00a0 will\u00a0 provide\u00a0 online\u00a0 verification\u00a0 mechanism\u00a0 on\u00a0 the website of ITD, in due course, which will enable the Deductor\/ Payer to verify whether the payee\/Recipient has filed the return of Income for the last two years or not.<\/p>\n

    The above provisions shall not apply to the following sections- 192, 192A,
    \n194B, 194BB, 194 LBC and 194N[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/2″][\/vc_column][vc_column width=”1\/2″]\n\t

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    By CA Soniya Dashottar<\/h2>\n\t\t<\/span>\n\t<\/div>[\/vc_column][\/vc_row][vc_row row_type=”row_full_center_content” bg_color=”#d1d1d1″ border_color=”#000000″ border_style=”dotted” border_width=”1px”][vc_column][vc_column_text]We trust you will find this insight informative as well as useful.\u00a0For any queries, you can write to us at info@sfsadvisors.co.in
    \nDisclaimer: This insight is meant for informational purpose only and should not be\u00a0considered as an advice or opinion.<\/p>\n

    Best Regards,
    \nTeam SFS[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_button title=”Click here to Download Pdf” color=”custom” button_custom_color=”#6d6d6d” link=”url:https%3A%2F%2Fsfsadvisors.co.in%2Fwp-content%2Fuploads%2F2021%2F03%2FAmendments-in-TDS-TCS-per-Union-Budget-2020-21.pdf|||”][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

    [vc_row][vc_column][vc_column_text]The\u00a0 Finance\u00a0 Bill,\u00a0 2020\u00a0 includes\u00a0 many\u00a0 provisions\u00a0 relating\u00a0 to\u00a0 amendment\u00a0 and changes in various TDS and TCS provisions and further …<\/p>\n","protected":false},"author":2,"featured_media":1367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[52],"tags":[],"_links":{"self":[{"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/posts\/177"}],"collection":[{"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=177"}],"version-history":[{"count":14,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/posts\/177\/revisions"}],"predecessor-version":[{"id":1356,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/posts\/177\/revisions\/1356"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=\/wp\/v2\/media\/1367"}],"wp:attachment":[{"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sfsadvisors.co.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}