TDS / TCS / Business ITR Compliances

Tax Deducted at Source (TDS), Tax Collected at Source (TDS) and Business Income Tax Return (B-ITR) are 3 important Prime Direct Tax Compliance which every Firm/LLP/Company doing business in India has to comply and follow the Income Tax Act and Rules and Act regulating Tax Deduction on payment of certain specified expenditures namely Salary, Interest, Rent, Dividend, Commission, Brokerage, Professional Fee, Royalti, Compensation, Advertisement, Contract Works and Payment made to Non Resident/Foreign Companies. TDS deduction rate varies expenditure wise as mentioned in Sectins 192 to 196D of the Income Tax Act

Tax Collection at Source (TCS) - Under section 206C of the Income Tax Act, tax has to be collected at source on sale of Category A, B, C & D goods ( namely Alcoholic Liquor, Timber, MInerals, Coal, Iron Ore, Parking Toll, Toll Plaza, Jewellery, Motor Vehicle Valued exceeds Rs 10 lakhs, etc.)

NON COMPLIANCE of Tax deduction and/or Deposit shall attract Interest per month and Non Filing of Return attract per day penalty for each return and Prosecution ( Imprisonment).

Non Compliance Impact on Income Tax Return and Tax Computation as filed. Failure to deduct the amount of TDS to be deducted or has deducted the TDS but fails to pay the same, the entire amount that was deductible is disallowed u/s 40(a)(ia) for the purpose of computing income taxable income from Business. Therefore on such expenditure Income Tax assessing office charge Income Tax with Interest.

NOW TDS on Purchase/Sale of Property - Purchaser liable to deduct 1% TDS on sales consideration and Deposit with Government. Purchaser shall have to file return and Issue certificate to saler.