New TDS Deposit Guidelines: The federal government has eased the rules surrounding the timeframe inside which corporations or deductors should deposit TDS (deducted from funds made by them) with the federal government earlier than a prosecution discover is issued. The usual due date for depositing TDS with the federal government is the seventh of the month following the month during which it’s deducted.
Staff could also be involved that the relief in TDS compliance granted to corporations might have an effect on the well timed deposit of the tax in opposition to their respective PANs.
In line with an ET report, there have been current cases of corporations, similar to SpiceJet and Byju’s, not depositing TDS with the federal government on time, leading to workers encountering income tax points.
What are the brand new TDS Deposit Guidelines?
Beforehand, corporations had 60 days from the unique due date to deposit the excellent TDS (tax deducted at supply). Nevertheless, ranging from October 1, 2024, the brand new earnings tax legal guidelines present corporations with further time to perform this.
From October 1 onwards, corporations may have till the deadline to file the TDS return to deposit TDS with the federal government. However, if the TDS is deposited after the unique due date, penal curiosity must be paid as well as.
Additionally Learn | New TDS rates from October 1, 2024: What are the revised tax deducted at source rates? Check list of changes for these transactions
This successfully grants an additional 20 days to make the TDS deposit, i.e., 60 days from the unique due date plus an extra 20 days.
The earnings tax division has launched a brand new rule relating to the prosecution discover for corporations that fail to deposit the TDS by the due date for submitting the TDS return.
Beforehand, the discover could be despatched after 60 days from the due date for depositing the TDS. Nevertheless, below the brand new TDS legal guidelines, the discover will probably be despatched instantly if the corporate fails to deposit the TDS, together with the penal curiosity, by the TDS return submitting deadline. This variation applies provided that the TDS quantity exceeds Rs 25 lakh.
New TDS Deposit Guidelines Defined with Instance
As an instance this modification, think about a state of affairs the place an organization deducts tax from an worker’s April wage. The final date to deposit the tax deducted in April is Could 7, and the final date to file the TDS return for the tax deducted in April, Could, and June is July 31. Underneath the sooner legal guidelines, if the corporate didn’t deposit the tax deducted by July 7 (60 days from the due date of Could 7), the earnings tax division would ship a discover asking why the corporate shouldn’t be prosecuted.
With the brand new TDS legal guidelines, the earnings tax division will ship the prosecution discover if the corporate fails to deposit the TDS, together with the penal curiosity, by July 31, the TDS return submitting deadline.
In line with the earnings tax legal guidelines, the tax deductor should deposit the TDS dues on or earlier than the seventh of the following month, with an exception in April. For presidency workers, the March TDS is deposited on or earlier than April 7, whereas for others, it’s April 30.
Additionally Learn | Latest post office small savings schemes interest rates Oct-Dec 2024: Government announces rates for PPF, SSY, SCSS, NSC – check list
Ought to workers be nervous?
The current amendments to the TDS legal guidelines present corporations with further time to deposit the TDS with the federal government. Nevertheless, issues have been raised in regards to the potential destructive influence on workers.
Many workers don’t commonly evaluate their Kind 26AS and Annual Info Assertion (AIS) through the monetary 12 months to confirm if their employer has deposited the tax deducted from their wage in opposition to their PAN.
Usually, workers examine their Kind 26AS and AIS within the following 12 months whereas submitting their earnings tax returns. When employers fail to deposit the TDS, workers are sometimes shocked after they evaluate their Kind 26AS and AIS.
Media stories have highlighted cases the place workers of Byju’s obtained tax notices from the earnings tax division relating to unpaid TDS dues. Lately, SpiceJet acknowledged that TDS dues remained unpaid between April 2020 and August 2023.
Pranay Bhatia, Associate & Chief, Company Tax, Tax & Regulatory Providers, BDO India, was quoted as saying by ET, “The brand new TDS legal guidelines present additional time for corporations to deposit TDS dues with the federal government. Whereas this rest will assist corporations, it is not going to adversely have an effect on the staff’ TDS credit score. The earnings tax division can nonetheless ship the prosecution discover to the businesses in the event that they fail to deposit the tax deducted on or earlier than the due date to file TDS return assertion.”
Naveen Wadhwa, Vice President of Analysis and Advisory Division, Taxmann, provides, “The comfort of TDS legal guidelines from October 1, 2024, provides corporations additional time to deposit TDS together with the penal curiosity earlier than the prosecution discover is distributed. Nevertheless, the brand new TDS legal guidelines is not going to adversely influence workers’ TDS credit score in opposition to their PAN.”
Latest stories have highlighted cases the place employers have withheld TDS from their workers’ salaries however didn’t remit the funds to the federal government. Because of this, quite a few workers confronted difficulties in claiming TDS credit score when submitting their earnings tax returns.
In line with Wadhwa, “Part 205 of the Earnings-tax Act prohibits tax restoration from taxpayers, offered tax is deducted from their wage or another earnings however not deposited with the tax division. Nevertheless, taxpayers should present proof to the earnings tax division that tax has been deducted from their wage.”
By furnishing proof of TDS deductions, people can guarantee they obtain the suitable TDS credit score and stop any further tax liabilities.
