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Thread: TDS Section 195

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    Rules and Regulations

    Default TDS Section 195

    Statutory obligation on payer

    Deducting tax at source is mandatory

    TDS does not substitute the obligation of receiver of income to file return and pay taxes

    If TDS not done, receiver is finally liable

    Tax free income to be grossed-up for TDS purposes [Section 195A]

    Tax deducted is income received [Section 198]

    Consequences of default

    Payer is deemed to be ‘assessee-in-default’ [Section 201(1) & 220]
    Receiver’s tax becomes payer’s tax

    Payer not to get deduction for expense [Section 40(a)]

    Interest @ 1% per month [Section 201(1A)]

    Penalty up to 100% up to tax in arrear [Section 221]

    Penalty up to 100% up to tax in arrear [Section 271C]

    Imprisonment for failure to deposit TDS amount (3 months to 7 years) and fine [Section 276B]
    Madhumilan Syntex Ltd. & Ors. Vs. UOI 2007-TIOL-44-SC-IT (SC)

    Source NIRC - ICAI
    Attached Files Attached Files
    Last edited by Rules and Regulations; 23-08-2010 at 01:03 PM.

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