In terms of Rule 31A of the Income Tax Rules, 1962 any person responsible for deducting TDS has to furnish quarterly TDS Return within the time prescribed therein in Form 24Q, Form 26Q and Form 27Q for TDS on salary, TDS on other than salary and for non-residents respectively.
Deduction of TDS is not required for the following cases as per the Income Tax Act, 1961(Act):
- TDS on dividend u/s 194 of the Act is not applicable if it is paid or credited to Infrastructure Investment Trust and the Real Estate Investment Trust by an Indian company in which such trusts holds controlling interest and any specific percentage of shareholding or interest. TDS is not required to be deducted in this case because dividend income for such trusts is exempt if paid by the Indian Company stated above in terms of section 10(23FC) of the Act
- TDS is not required to be deducted on dividend to any person who has been specifically exempted from TDS deduction via notification under clause (e) of second proviso to section 194 of the Act
- TDS is not required to be deducted on interest on securities if paid or credited to any person who has been specifically exempted from TDS deduction via notification u/s 194A(5) of the Act
- TDS is not required to be deducted on interest on zero coupon bond issued on or after the 1st day of June, 2005 paid by infrastructure capital company or infrastructure capital fund or infrastructure debt fund or a public sector company or scheduled bank
- No TDS is required to be deducted on any capital gain paid to any foreign institutional investor on transfer of securities
- No TDS is required to be deducted under newly introduced section 194Q of the Act on purchase of goods of value exceeding Rs. 50 lacs in a previous year, if TDS is deducted in any other provision and TCS is collectable on such transaction.
Earlier while filing the TDS Return in Form 24Q, Form 26Q and Form 27Q, the details of the above said exemption of TDS deduction was not required to be filled.
However, amendments have been made vide Notification No. 71/2021 dated 08-06-2021 in Rule 31A of the Rules, which requires that if any TDS is not deducted due to above said exemption, details of such amount paid or credited without TDS deduction shall have to be filled in TDS Return.
Also, TDS Form 26Q and Form 27Q has been amended wherein the reasons for non-deduction or low deduction or deduction at a higher rate of TDS is required to be filled. Different codes for such reason have been provided to fill in the form.
Also, the banks or post office or cooperative society has to file details for TDS deducted u/s 194N on cash withdrawal by any person of more than Rs. 1 cr. or 20 lacs as the case may be.
Also, Form 27EQ for TCS has been amended to furnish information regarding collection of TCS at a higher rate if no PAN is submitted by the buyer or no return is filed by any person for last two years if TDS deducted and TCS collected is Rs. 50,000/- or more in those two years.
Reference of Notification 71/2021 dated 08-06-2021- https://www.incometaxindia.gov.in/communications/notification/notification_71_2021.pdf
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