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NEW DELHI: The Income Tax Department has amended the TDS form, making the reasons for non-deduction of tax more comprehensive and mandatory.
According to the revised form, banks will also have to report Tax deducted at source (TDS) for cash withdrawals exceeding Rs 1 crore.
Through a notification, the Central Board of Direct Taxes (CBDT) has made amendments Income tax rules Dividends distributed by mutual funds and business trusts, cash withdrawals, professional fees and interest, to include TDS on e-commerce operators.
Nangia & CO LLP partner Shailesh Kumar said that with this notification, the government has revised the format of Forms 26Q and 27Q, which requires filling details of deductions and TDS amount deposited on various resident and non-resident payments.
Form 26Q is used for quarterly filing of TDS returns on any payment other than salary to Indian residents operated by the government or corporate in India.
Form 27Q is used for quarterly filing of TDS returns electronically on any payment other than salaries to non-residents, including NRIs and foreigners. Except government deductors, it is mandatory for all other deductors to mention their PAN in the form.
Kumar said, “The new forms are more comprehensive and payers are required not only to report cases where TDS is deducted, but also cases where TDS is not deducted for some reason. TDS deducted Separate codes have been provided to mitigate various situations. TDS rate / no deduction. ”
The revised form and rules also seek to include reporting for new sections of TDS inserted in the Income Tax Act, such as Section 194N for cash withdrawals, Section 197A in different situations, allowing non-deduction of TDS.
In the 2019-20 budget, the government imposed a TDS of 2 per cent on cash withdrawals of more than Rs 1 crore from a bank account in a financial year to discourage business payments in cash.
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