PATEL’S COMMERCE CHAMBER 1

Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

7. INCOME FROM OTHER SOURCES

(Sections 56 to 58 of the Act)
Charging Section [Section 56]
Income from other sources is the last and residual head of income and brings within its
scope all the taxable income, profits or gains of an assessee which fall OUTSIDE the
scope of any other head.
When any income, profit or gain does not fall precisely under any of the other
specific heads but is chargeable under the provisions of the Act it would be charged under
this head.

Sec. 56(1) covers income which does not fall under any other head of income.
Sec. 56(2) specifies nine incomes which are always taxable under the head “Income
from other sources”.

The following nine incomes are always taxable under the head “Income from other
sources”-
1. Dividend from company or dividend of co-operative society.
2. Winnings from lotteries, crossword puzzles, races including horse races, card games
and other games of any sort or from gambling or betting of any from or nature
whatsoever.
3. Sum received from employees as contribution to any staff welfare scheme (if it is not
taxable as business income under sec. 28) if it is not deposited before due date of such
act.
4. Interest on debentures, Government securities / bonds (if it is not taxed as business
income under sec. 28).
5. Rental income from machinery plant or furniture let on hire (if the same is not taxed
as business income under sec. 28).
6. Rental income of letting out of plant, machinery or furniture along with letting out of
building and the two letting are not separable (if the same is not taxed as business income
under sec. 28).
7. Any sum received under a Keyman insurance policy including bonus (if the same is not
taxable as salary income or business income).
8. Money or property received without consideration or for inadequate consideration.
9. Interest received on compensation or on enhanced compensation.

Other incomes which are normally included under the head ‘Income from
other Sources’
Following are some other incomes which are normally chargeable to tax under this
head because these are not covered under any other heads:
(i) Income from sub-letting of a house property by a tenant;
(ii) Casual income;
(iii) Insurance commission;
(iv) Family pension (payments received by the legal heirs of a deceased

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 2
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

employees);
(v) Director’s sitting fee for attending board meetings;
(vi) Interest on bank deposits/deposits with companies/ loans;
(vii) Interest received on delayed refund;
(viii) Income from royalty, if it is not income from business or profession;
(ix) Director’s commission for standing as a guarantor to bankers;
(x) Income from undisclosed sources;
(xi) Remuneration received by Members of Parliament;
(xii) Interest on securities of foreign governments;
(xiii) Director’s commission for underwriting shares of a new company;
(xiv) Examinership fees received by a teacher from an institution other than
his employer;
(xv) Rent from a vacant piece of plot of land;
(xvi) Agricultural income from agricultural land situated outside India; (xvii)Income
from granting of mining rights;
(xviii) Interest paid by the Government on excess payment of advance tax₹ etc
(xix) Amount withdrawn from NSS (National Saving Scheme). In case of NSS 1987
Scheme both principal and interest is taxable. But in case of NSS 1992 only
interest being taxable on withdrawl.
(xx) Advance received and retained on or after 1.4.2014 in the course of
negotiation for transfer of a capital assets which did not materialize.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 3
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

8. SET OFF & CARRY FORWARD OF LOSSES

Set off in the year of Carry forward Time Wheth

loss & Set off in limit er
Head of subsequent for c/f Return
Income previous and set to be
years off of filed
Under Under Under Under
losses before
other
same Other same due
head
head head head date
(Sec. 70) (Sec. 71) u/s
139(1)
Income from Yes (Upto ₹
House Property 2,00₹000
Yes only₹ Yes No 8 A.Y. No
balance
carried
forward
)
Profits and
Gains from
Business or
Profession
Non – Yes (Both
Speculation from
Business Speculatio Yes₹
n except Yes No 8 A.Y. Yes
Business from
& Non Salary
Speculatio
n
Business)
Speculation Yes (Only Yes (Only
Business from No from No 4 A.Y. Yes
Speculatio Speculatio
n n
Business) Business)
Unabsorbed
Depreciation₹
Yes
Unabsorbed Yes
Yes Yes Excep Indefinite No
Scientific Except
t from Period
Research₹ from
Salar
Family Salary
y
Plannin
g expenditure

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 4
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

Agricultural Yes (only Yes (only

from No from No 4 years No
agricultura agricultura
l l
income) income)

Specified Yes (Only Yes (only

Business u/s 35 from No from No Indefinit Yes
AD Specified Specified e Period
Business) Business)

Capital Gains
Short term Yes Only from Yes No 8 A.Y. Yes
LTCG

Long Term Only from No Only from No 8 A.Y. Yes

LTCG LTCG

Income from
Other Sources
Lotteries₹ Loss of It cannot
Crossword same No N.A. N.A. be carry N.A.
puzzles₹ card cannot be forward
set off
games₹
gambling etc.

Loss from activity Yes (Only Yes (Only

of owning and from such No from such No 4 A.Y. Yes
maintaining race activity) activity)
horses

Other Income Yes Yes N.A. N.A. It cannot N.A.

be c/f

Note: Loss from the activity of owning & maintaining animal for races other than horse
race can be set off & carry forward like any other business loss.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 5
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

9. DEDUCTIONS UNDER CHAPTER VIA

(Sections 80C – 80U)

Deduction u/c VI A not available from LTCG u/s 112₹ LTCG u/s 112A₹ STCG u/s
111A₹ lottery income₹ races etc.

Sec. Available Conditio Deduction

to n
• Subscription to notified bond of
NABARD.
• 5 years term deposit in bank/ post
office.
• LIP – Self₹ Spouse₹ Children
(Dependent₹ Independent Married₹
Unmarried₹ Major₹ Minor)
- Maximum deduction 20% of sum
assured.
- In case of Insurance Policy issued
on or after 1-4-2012 maximum
deduction is 10% of sum assured.
- In case of Insurance Policy issued
on or after 1-4-2013 maximum Up to ₹
deduction is 15% of sum assured if 1₹50₹000
policy issued in respect of person For
referred to in Sec. 80U or 80DDB. 80C₹
Individual 80CCC &
• Contribution to Provident Fund₹
80C / HUF
Superannuation Fund. 80CCD(1)
• 6 years NSC & Accrued interest for (Sec.
initial 5 years. 80CCE)
• Tuition Fees (for full time education of
two children in India)
• 15 years PPF [Self₹ Spouse₹ Children].
Date of Clearing of cheque is
considered as date of payment. The
annual ceiling for investment in PPF is
₹ 1₹50₹000
• Payment towards Cost of purchase /
construction of Residential property
including repayment of housing loan
(Only Principal Component)
• Notified Unit (ELSS) of UTI₹ Mutual
fund₹ LIC
• Subscription to Public Deposit Scheme
of

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 6
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

HUDCO (Housing & Urban

Development Corporation Ltd.)
• Senior Citizen Saving Scheme
• Amount deposited in Sukanya
Samriddhi Account scheme
Deposit to Pension Fund of LIC or
80CCC Individual other insurer

Contribution to NPS (National Covered in

Pension Scheme) overall
80CCD(1) Individual Upto 10% of Basic Salary & DA ceiling of
(Employee contribution)₹ or Sec. 80CCE
Upto 20% of GTI (Individual other
than
Employee)
Contribution to NPS (National
Pension Scheme)
Deduction
80CCD(1B Individual Deduction available to assessee₹
) s up to
whether or not any deduction is allowed
50₹000
u/s 8CCD(1)
Contribution to NPS (National
Pension Scheme) Not
Upto 14% of Basic Salary & DA covered in
80CCD(2) Individual (Employer contribution₹ if employer is overall
CG) ceiling of
Upto 10% of Basic Salary & DA Sec.
(Employer contribution₹ in case of any 80CCE
other employer)
Mediclaim Policy of GIC or Central
Government Health Scheme or
contributory Health Service Scheme paid Up to
by any mode other than cash and ₹ 25₹000
medical expenditure in respect of Upto
senior citizen without any health ₹50₹000 (if
insurance. anyone is
Individual Senior
80D • Insurance taken on the health of Self₹
/HUF Citizen)
Spouse and Dependent Children and
medical expenditure incurred if
anyone is
senior citizen.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 7
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

• Insurance taken on the health of Upto ₹

Parents (Father & Mother whether 25₹000
dependent or not) and medical Upto ₹
expenditure incurred if any parent is 50₹000 (if
senior citizen. anyone is
Senior
Citizen
i.e. 60
years or
more)

• Assessee does not own any

other residential house
property
• Loan sanctioned during PY 2016-17
Interest on loan taken from a financial
institution for purchasing a residential
house property. This deduction shall be
available subject to the following
conditions:
80EEA Individual • Stamp duty value of property does not
exceed ₹ 45 lakh Up to
• Assessee does not own any other ₹ 1₹50₹000
residential property on the date of
sanction of loan.
• Loan sanctioned during PY 2019-20 or
PY 2020-21 or PY 2021-22
• Should not be eligible to claim
deduction u/s 80EE
Interest on loan taken from a
financial institution for purchase of
80EEB Individual electric vehicle. Up to
• Loan sanctioned during 1.4.2019 ₹ 1₹50₹000
to 31.3.2023
• Deduction available till the repayment
of loan continues
Donation (any sum of money)
• Available in respect of fund set up
for Charitable purpose not religious
purpose See Note
80G Any GTI xx after the
assessee Less: LTCG₹ STCG u/s 111A xx Chart
Less: All ded u/s 80C to 80U except 80G
xx
Adjusted GTI xx
Any payment exceeding ₹ 2₹000 shall
only be
allowed as deduction if such sum is

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 8
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

paid in any mode other than cash.

Rent Paid in case of non-receipt of HRA

Least of the following amount is
deductible:
• Rent Paid (-) 10% of Adjusted GTI
• ₹ 5₹000 per month Lower
80GG Individual • 25% of Adjusted of the 3
GTI Conditions:
• The person should not own any
residential house at the place of
business or employment.
• The assessee should not own any
residential house at any other
place
and claim benefit of SOP.

Sum paid to following institutions:-

• Approved research
Association₹
University₹ College or other
institution to be used for scientific
research. (similar to Sec. 35)
Assessee • Approved research association which 100% of the
80GGA not having has as its object the undertaking of sum paid
PGBP research in social science or statistical
income research or to a university₹ college or
other institution for research in social
science or statistical research. (similar
to Sec. 35)

Any payment exceeding ₹ 2₹000 shall

only be allowed as deduction if such Sum
is paid in any mode other than cash.
Donation for any sum to Indian Political
Indian Party or Electoral Trust by any mode other Amoun
80GGB
Compan than Cash. t
y donate
d

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 9
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

Any
assessee
other than Donation for any sum to Indian Political
80GGC Amoun
Indian Co.₹ Party or Electoral Trust by any mode other
t
local than Cash.
donate
authority & d
AJP funded
by the
Govt.
Additional emoluments paid to new
Workmen
• Deduction available only to
business covered u/s 44AB.
30% of
• Cost incurred on any employee
Additional
whose total emoluments are less
Wages
80JJAA Any than or equal to ₹ 25₹000 p.m. is
Paid (No
Assessee additional wages.
deduction
• Minimum number of days of
if ROI not
employment in a financial year is
filed by
240 days (150 days in case of
due date)
manufacture of Apparel₹ foot wear
& Leather)
• Employee should participate in the
recognized PF.
• Emoluments paid by account payee
cheque/ draft or ECS

Royalty Income of Author Royalty

Case 1 : Copyright transferred for Received
lumpsum consideration less
Case 2 : Copyright not transferred₹ expenses
Resident Royalty Received whether in Lumpsum or or
80QQB otherwise ₹ 3₹00₹000
Individual
• For the purpose of Deduction in Case whichever
2₹ royalty received not to exceed is lower
15% of value of book sold. (No
• Amount Received in India in deduction
convertible foreign exchange within 6 if ROI not
months from end of P.Y. shall be filed by
taken as Royalty due date)
received

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 10
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

Royalty
Received
less
Royalty on Patent expenses
• Amount Received in India in or
80RRB Resident
convertible foreign exchange within 6 ₹ 3₹00₹000
Individual
months from end of PY shall be taken whichever
as Royalty received is lower
(No
deduction
if ROI not
filed
by due
date)
Individual
except Interest on Saving Account with a Upto
80TTA
Senior Scheduled Bank₹ or a Co-operative Bank ₹ 10₹000
Citizen/ or Post Office
HUF
Individual
Interest on any Deposit with a Upto
80TTB (Senior
Citizen) Scheduled Bank₹ or a Co-operative Bank ₹ 50₹000
or Post Office
Fixed
Suffering from disability (Blindness₹ Low Deductio
vision₹ Leprosy-cured₹ Hearing n
80U Individual
impairment₹ Locomotors disability₹ ₹ 75₹000 or
Mental retardation₹ Mental illness) ₹ 1₹25₹000
(if
disability >
80%)

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 11
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

RETURN OF INCOME

Section Content
Statutory filing of Return
• For Firm & Company mandatory
• For other if Taxable Income before deduction under chapter VI A₹ &
capital gain exemption u/s 54₹ 54B₹ 54EC₹ 54F₹ 54GA & 54GB >
Maximum amount not chargeable to tax
• Individual who deposited ₹ 1 Crore or more in current account.
• Individual who incurred expenditure of ₹ 2 lakh or more on foreign
travel.
• Individual who incurred expenditure of ₹ 1 lakh or more an
electricity consumption.
• Any resident who is otherwise not required to furnish a return of
Income₹ will be required to furnish a return if he has any asset
located outside India including any financial interest in any entity₹
139(1) or has signing authority in any account located outside India.
Due date of
Different submission
Situations of return
1. Where the assessee is a company October 31
2. Where the assessee is a person other than a October 31
company
2.1 In case where accounts of the assessee are
required to be audited under any law
2.2 Where the assessee is a partner in a firm
whose accounts are required to be audited
under any law
3. Assesses required to file Transfer Pricing Report
under Sec. 92E pertaining to International
Transaction November 30
4. In any other case July 31
Note: Where the last day for filing return is a day on which the office is
closed₹ the assessee can file the return on the next day afterwards on
which the office is open and₹ in such cases₹ the return will be
considered to have been filed within the specified time limit.
139(1A) Salaried employee to furnish return through their employer.
139(1B) Option to file return through computer readable media (CD₹ floppy).
139(1C) Exempted from filing Return
For reducing the compliance burden of small taxpayers₹ the Central
Government has been empowered to notify the class or classes of
persons who will be exempted from the requirement of filing of return of
income₹ subject to satisfying the prescribed conditions.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 12
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

139(3) Loss Return

Loss cannot be carried forward if Return of Income not filed within due
date u/s
139(1). Exception: Income from HP₹ Unabsorbed Depreciation₹
Agricultural Income.
139(4) Belated Return
Before 3 months prior to the end of the relevant AY or before the
completion of assessment whichever is earlier. Belated Return can also
be revised.
139(5) Revised Return
Before 3 months prior to the end of the relevant AY or before the
completion of assessment whichever is earlier. A return may be revised
any number of times.
139(6) Particulars to be furnished with the return
The prescribed form of the return shall₹ in certain specified cases₹
require the assessee to furnish the particulars of-
(i) Income exempt from tax
(ii) Assets of the prescribed nature and value and belonging to him
(iii) His bank account and credit card held by him
(iv) Expenditure exceeding the prescribed limits incurred by him
under prescribed heads
(v) Such other outgoing as may be prescribed.
139(6A) Particulars to be furnished with return of income in the case of an
assessee engaged in business or profession
The prescribed form of the return shall₹ in the case of an assessee
engaged in any business or profession also require him to furnish –
(i) The report of any audit referred to in section 44AB.
(ii) The particulars of the location and style of the principal place
where he carries on the business or profession and all the
branches thereof.
(iii) The names and addresses of his partners₹ if any₹ in such
business or profession.
(iv) If he is a member of an association or the body of individuals;
and
(a) The names of the other members of the association or the
body of individuals; and
(b) The extent of the share of the assessee and the shares of all
such
partners or members₹ as the case may be₹ in the profits of the business
or profession.
139(9) Defective Return
Non-payment of self-assessment tax together with interest₹ if any₹
payable in accordance with the provisions of Section 140A₹ by the date
of furnishing the return of income shall make the return of income a
defective return. Department shall intimate defect to assessee to rectify
it within 15 days.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 13
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

139A PAN
The following persons are required to obtain a permanent account
number:
1. If income exceeds exemption limit or turnover exceeds or is likely to
exceed
₹ 5₹00₹000. Application should be submitted to obtain the permanent
account number before May 31 of the assessment year.
2. Non-individual entities which enters into a financial transaction of
an amount aggregating to ₹ 2₹50₹000 or more in a financial year.
3. Non-individual entities with the natural persons₹ it is also proposed
that the managing director₹ director₹ partner₹ trustee₹ author₹
founder₹ karta or any person competent to act on behalf of such
entities shall also apply for PAN.
4. Charitable Trust
5. Person specified by the Central Government (such as importers and
exporters)
6. Every person who intends to enter into certain prescribed
transactions. Every person who has been allotted a PAN and who has
linked his Aadhar with PAN₹ may disclose his Aadhaar Number in lieu of
a PAN.
139AA Every person who is eligible to obtain Aadhar Number is required to quote
Aadhar Number in:
(a) PAN Application Number
(b) Return of Income
Person can quote the Enrollment ID of Aadhar Application form in case
he does not possess the Aadhar Number.
139B Submission of Return through TRP It provides as follows:
• For the purpose of enabling any specified class or classes of persons
to prepare and furnish returns of income through a Tax Return
Preparer.
• The Scheme shall specify the manner in which the Tax Return
Preparer shall assist the persons furnishing the return of income₹
and shall also affix his signature on such return.
• A tax Return Preparer may be an individual other than an employee
of the specified class or classes of persons.
• The above Scheme shall also provide the manner in which a TRP
shall be authorized₹ the educational qualifications₹ the training and
other conditions required to be fulfilled₹ the code of conduct for the
Tax Return Preparer₹ the duties and obligations of the Tax Return
Preparer₹ the manner in which the authorization may be withdrawn.
• Practicing CA and Advocate cannot act as TRP.
• Cannot submit return of income of an assessee whose books of
accounts are required to be audited u/s 44AB.
139C Annexure Less Return
The Central Board of Direct Taxes has notified the following forms:

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 14
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

New Subject
ITR
Forms
ITR – 1 For an individual if his total income is upto ₹ 50 lakh and
includes:
(a) Salary and family pension;
(b) Income from one house property (excluding losses);
(c) Income from other sources but does not include:
• Winnings from lottery;
• Winnings from horse races; and
• Loss under this head.
ITR – 2 For individuals and HUFs not having income from profit and
gains from business or profession
ITR – 3 For individual and HUF having Income from profit and gains
of business or profession
ITR – 4 Income computed on presumptive basis u/s 44AD, 44ADA &
44AE
ITR – 5 For Firms, LLP, AOPs, BOIs, artificial judicial
persons, co-operative society or local
authority.
ITR – 6 For Companies
ITR – 7 For persons required to furnish return under section
139(4A)/ (4B)/ (4C)/ (4D)/ (4E)/ 4F) (i.e. trusts, political
parties, institutions, colleges etc.)

Note:
1. The assessee will have the following 3 options of filling return
electronically
(a) E-filing with digital signature
(b) E-filing with electronic verification code (EVC)
(c) E- filing and submitting ITR-V to CPC
2. Return in ITR 1 cannot be filed by a person₹ who:

Interest for late filing of return [Sec. 234A]

An assessee shall be liable to pay interest u/s 234A @ 1% p.m. or part of the
month for late filing of return. Interest is calculated on the amount of tax due
i.e. tax assessed on the total income less advance tax₹ TDS if any:
Default Period for computing interest
If the return of income From the date immediately following the due date for
is furnished after the filing return of income to the date of furnishing of
due return of
date income.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 15
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

If the return of income From the date immediately following the due date for
is not filed filing return of income to the date of completion of
assessment u/s
144.

10. Tax Deducted at Source (TDS)

The total income of an assessee for the previous year is taxable in the relevant
assessment year. For example, the total income for the PY 2019-20 is taxable in the
AY 2020-21. However, income-tax is recovered from the assessee in the previous
year itself through following modes:
a) Payment of Advance Tax
b) Tax Deducted at Source (TDS)
c) Tax Collected at Sources (TCS)

These taxes are deductible from total tax due from the assessee. The assessee shall
pay self- assessment tax under Section 140A, if tax is due on the total income as
per his return of income after adjusting TDS and advance tax.

NO TDS on payment to following persons [Section 196]

No deduction of tax shall be made by any person from any sums payable to -
a) the Government; or
b) the Reserve Bank of India; or
c) a corporation established by or under a Central Act, which is exempt from
income-tax or
d) a Mutual Fund specified under Section 10(23D);

Point of time when TDS has to be deducted at source

1. At the time of payment
In the following cases, tax is deductible at the time of payment –
• Salary [Sec. 192]
• Winnings from lottery/ crossword puzzle [Sec. 194B]
• Winnings from horse race [Sec. 194BB]
2. At the time of payment or at the time of giving credit to the recipient
in the books of the payer, whichever is earlier
In all the other cases tax is deductible either at the time of payment or at the time of
passing credit entry or book entry in the books of the payer, whichever is earlier-

Person liable to deduct TDS

The person responsible for making payment (or passing book entry) shall deduct tax at
source under the aforesaid sections whether the payment is for business or personal
purposes. However, if
• Payer is an individual/ HUF carrying on business whose turnover is upto ₹ 1 crore
and upto ₹ 50 lakh if carrying on profession in the immediately preceding financial
year, TDS need not be deducted, except u/s 194 IA, 194 IB & 194M

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 16
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

• Payer is an individual /HUF and payment/credit is of professional fees for personal

purposes of the payer [Sec. 194J] then TDS is not deductible irrespective of
turnover in the immediately preceeding FY.
• Payee is Government, TDS is not deductible.

TDS RATES

Section Nature of Payment Threshold limit Rate of

to TDS
deduct tax
192 Salary Basic exemption Avg Rate
limit of
Tax
192A Premature withdrawal from ₹ 50,000 p.a. 10%
employee’s Provident Fund
193 Zero Coupon Bond / -- --
Government
Securities
8% GOI Saving (Taxable) Bond ₹ 10,000 p.a. 10%
2003
7.75% GOI Saving (Taxable) ₹ 10,000 p.a. 10%
Bond
2018

Interest on Securities ₹ 5,000 p.a. 10%

(Listed/ Unlisted)
194 Dividend on shares ₹ 5,000 p.a 10%
194 A Interest on Fixed Deposit &
Recurring Deposit from Banking ₹ 50,000 p.a. (for
Company / Co- operative Society Senior Citizen) 10%
engaged in banking/ deposit with ₹ 40,000 p.a. (for
Post office other)
Interest other than from
Banking company / Post office. ₹ 5000 p.a. 10%

194 B Winning from lottery, Cross

₹ 10,000 30%
word
puzzle or other game
194 BB Winning from horse race ₹ 10,000 30%
194 C Payment to contractor/ sub ₹ 30,000 per 1% (2% if
contractor single contract or payment
₹ 1,00,000 in made to
aggregate person
other than
Ind/HUF)

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 17
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

Payment to Transport contractor -- Nil

who is eligible to compute income
u/s 44AE
5% (10%
if
payment
194 D Insurance Commission ₹ 15000 p.a.
made to
person
other than
Ind/HUF)
Sum paid under Life Insurance
194 DA ₹ 1 lac p.a. 5%
policies
which are not exempted u/s
10(10).
194 G Commission on sale of Lottery ₹ 15₹000 p.a. 5%
194 H Payment of commission or ₹ 15₹000 p.a. 5%
Brokerage
194 I Payment of Rent for land,
building or furniture or fitting ₹ 2,40.000 p.a. 10%
whether or not
owned by payee.
Payment of Rent for use of
Plant, Machinery or equipment ₹ 2,40,000 p.a. 2%
whether or not owned by payee.

194IA Payment on transfer of

₹ 50 lakh
immovable Property (other than 1%
agricultural land)
194IB Payment of Rent to a resident
by an ₹ 50000 p.m. 5%
Individual/ HUF not liable to
deduct TDS u/s 194I.
194 J (a) Payment of Technical Services Fee ₹ 30000 p.a. 2%
194 J(b) Payment of Professional/ Non-
₹ 30000 p.a. 10%
compete fee
194 K Dividend on units of mutual fund ₹ 5000 10%
194 LA Payment of compensation on
₹ 250000
compulsory acquisition of 10%
immovable property (other than
agricultural land)
194 M Payment to contractor or
professional by Individual or HUF ₹ 50 lakh p.a. 5%
not required to deduct TDS u/s
194C or 194J

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 18
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

194 N Cash withdrawal exceeding ₹ 1 2% on the

crore in a Financial year from one amount
₹ 1 crore p.a.
or more account maintained in a exceeding
bank or Post ₹ 1 crore
office.
Cash withdrawal exceeding ₹ 20
lakh in a financial year from one or > 20 lakh but ≤ 1 2%
more account maintained in a bank cr.
or post office by a recipient who
has not furnished the return of
income for all the 3 AY.₹ for which > 1 Cr. 5%
the time limit has
expired.
194 O Payment by E-Commerce Operator
to E-commerce participant.
Not applicable for -- 1%
E-commerce participant being
individual or Huf having sale
through ECO upto ₹ 5 lakhs.
194 Q Payment by a buyer (whose 0.1% of
turnover in the last FY exceeds ₹ the sum
₹ 50 lakh
10 Cr) to any resident – seller for exceeding
purchase of goods. ₹ 50 lakh

Note:
1. Surcharge and Cess is not applicable for TDS. It is applicable only:
• When the recipient is a foreign company or non resident
• On payment of Salary to any individual
2. The Rate of TDS will be 20% in all cases₹ if PAN is not quoted by the deductee.
However, for the purpose of Sec. 194O if the E-commerce participant does not
furnish PAN or Aadhar₹ rate of TDS would be 5%.
3. TDS needs to be deducted if the amount is above the limits given.
4. Interest @ 1% p.m. or part of the month from the date TDS was deductible to the
date tax is deducted (i.e. on late deduction).
5. Interest @ 1.5% p.m. or part of the month from the date tax was deducted to the
date tax is actually paid (i.e. on late deposit).
6. Professional Services would include any fees₹ commission or remuneration by
whatever name called₹ paid or payable to a director of a company other than
Salary income. No threshold limit is provided. Tax will be deductible even if the
Payment / Credit during a FY is less than ₹ 30,000.
7. Sec. 194IA will apply to all types of purchasers including individuals and HUFs. The
buyer of an immovable property is not required to obtain and quote TAN. The
option of obtaining certificate from the Assessing Officer under section 197
prescribing nil rate or lower rate of TDS is not available in such a case.
8. For the purpose of Sec. 194IA if the value adopted/assessed/assessable for the

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 19
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

stamp duty purposes is more than the actual consideration paid/ payable₹ then
such value shall be considered for the purpose of deduction of tax at source. The
registering officer shall not register the document unless the transferee furnishes
the proof of deduction and payment of such tax.
9. For the purpose of Sec. 194 IA₹ consideration for immovable property shall include
all charges paid towards club membership fee₹ car parking fee electricity and
water facility fees₹ maintenance fee or any other charges of similar nature which
are incidental to transfer of the immovable property.
10. For the purpose of Sec. 194 IB₹ deductor shall not be required to obtain TAN and
they shall deduct TDS only once in a previous year.
11. TDS can be deposited under section 194M without any requirement to obtain TAN.
12. Exemption from TDS of 5% being deducted from Commission payable to individual
insurance agents subject to their filling a self-declaration that their income is
below taxable limit.
13. TDS shall be deducted on amount paid or payable without including GST on
services component.

TDS CERTIFICATES
Certificate for TDS shall be given by deductor/ payer
Income Form No. Due date
Salary Form 16 st
Annually by 31 May of following FY
Other Form 16A Quarterly within 15 days of furnishing the statement
Income of
TDS

DUE DATES FOR DEPOSIT OF TDS

1. If deductor/payer is other than Govt.
Deduction date Due dates
If amount deductible in April to Feb. 7th of next
month
If amount deductible in March April 30th
2. If deductor/payer is Government
Amount deposited without challan On the same day of
deduction
Amount deposited with challan On the 7th day of next
month

DUE DATES FOR DEPOSIT OF STATEMENTS OF TDS

Quarter ending Due dates
June July 31st
September October 31st
December January 31st
March May 31st

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200
PATEL’S COMMERCE CHAMBER 20
Regidi street, Hinjlicut, Ganjam Income Tax – (Part-3)

Fee and penalty for delay in furnishing of TDS Statement and penalty for
incorrect information in TDS Statement [Sec. 272A]
In order to provide effective deterrence against delay in furnishing of TDS statement,
it is provided that-
(i) To levy fee of ₹ 200 per day for late furnishing of TDS statement from the due
date of furnishing of TDS statement to the date of furnishing of TDS statement.
However, the total amount of fee shall not exceed the total amount of tax
deductible during the period for which the TDS statement is delayed and
(ii) To provide that in addition to said fee, a penalty ranging from ₹ 10,000 to ₹
1,00,000 shall also be levied for not furnishing TDS statement within the
prescribed time.

In view of the levy of fee for late furnishing of TDS statement₹ it is also provided that
no penalty shall be levied for delay in furnishing of TDS Statement if the TDS statement
is furnished within one year of the prescribed due date after payment of tax deducted
along with applicable interest and fee.

In order to discourage the deductors to furnish incorrect information in TDS

statement₹ it is provided that a penalty ranging from ₹ 10,000 to ₹ 1,00,000 shall be
levied for furnishing incorrect information in the TDS statement.

PREPARED BY – SANTOSH KUMAR PATEL (M.COM, M.PHIL, MBA) CELL NO. - 8908091200