Advance Tax, Tax Deduction at Source and Introduction to Tax Collection at Source
The total income of an assessee for the previous year is taxable in the relevant assessment year. For example, the total income for the P.Y. 2023-24 is taxable in the A.Y. 2024-25. However, income-tax is recovered from the assessee in the previous year itself through –
Another mode of recovery of tax is from the employer through tax paid by him under section 192(1A) on the non-monetary perquisites provided to the employee.
These taxes are deductible from the total tax due from the assessee. The assessee, while filing his return of income, has to pay self-assessment tax under section 140A, if tax is due on the total income as per his return of income after adjusting, inter alia, TDS, TCS, relief of tax claimed under section 89, tax credit claimed to be set off in accordance with the provisions of section 115JD, in case assessee exercises the option of shifting out of the default tax regime provided under section 115BAC(1A), any tax or interest payable according to the provisions of section 191(2) and advance tax.
Direct payment of tax - Section 191(1) provides that in the following cases, tax is payable by the assessee directly –
In view of this provision, the proceedings for recovery of tax necessarily had to be taken against the assessee whose tax was liable to be deducted, but not deducted.
In order to overcome this difficulty, the Explanation to this section provides that if any person, including the principal officer of a company –
does not deduct, or after deducting fails to pay such tax, or does not pay, the whole or part of the tax, then, such person shall be deemed to be an assessee-in- default.
However, if the assessee himself has paid the tax, this provision will not apply.
This section casts an obligation on every person responsible for paying any income chargeable to tax under the head ‘Salaries’ to deduct income-tax at the time of payment on the amount payable.
Such income-tax has to be calculated at the average rate of income- tax computed on the basis of the rates in force for the relevant financial year in which the payment is made, on the estimated total income of the assessee where the employee intimates to the employer his intent to exercise the option of shifting out of the default tax regime provided under section 115BAC(1A).
If intimation is not made by the employee, it would be presumed that the employee continues to be in the default tax regime u/s 115BAC and has not exercised the option to opt out of the default tax regime. Accordingly, in such a case, the employer has to deduct tax at source, on income under section 192, in accordance with the rates provided under section 115BAC(1A).
It is also clarified that the intimation would not amount to exercising option under section 115BAC(6) and the person shall be required to do so separately in accordance with the provisions of that section [Circular No. 4/2023 dated 5.4.2023].
The employer shall take the above particulars into account while calculating tax deductible at source.
Sub-section (2C) provides that the employer shall furnish to the employee, a statement in Form No. 12BA giving correct and complete particulars of perquisites or profits in lieu of salary provided to him and the value thereof. The statement shall be in the prescribed form and manner. This requirement is applicable only where the salary paid/payable to an employee exceeds ₹1,50,000. For other employees, the particulars of perquisites/profits in lieu of salary shall be given in Form 16 itself.
Every year, the CBDT issues a circular giving details and direction to all employers for the purpose of deduction of tax from salaries payable to the employees during the relevant financial year. These instructions should be followed.
Sub-section (2D) casts responsibility on the person responsible for paying any income chargeable under the head “Salaries” to obtain from the assessee, the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in the prescribed form and manner, for the purposes of –
In case an employee has intimated his employer of his intent to exercise the option of shifting out of the default tax regime provided under section 115BAC(1A), Rule 26C requires furnishing of evidence of the following claims by him to the person responsible for making payment under section 192(1) in Form No.12BB for the purpose of estimating his income or computing the amount of tax to be deducted at source:
|
S. No. |
Nature of Claim |
Evidence or particulars |
||||
|
1. |
House Rent Allowance |
Name, address and PAN of the landlord(s) where the aggregate rent paid during the previous year exceeds ₹1 lakh. |
||||
|
2. |
Leave Travel Concession or Assistance |
Evidence of expenditure |
||||
|
3. |
Deduction of interest under the head “Income from house property” |
Name, address and PAN of the lender |
||||
|
4. |
Deduction Chapter VI-A under |
Evidence of investment or expenditure. |
||||
This section casts responsibility on every person responsible for paying to a resident any income by way of interest on securities.
Interest on securities means -
Such person is vested with the responsibility to deduct income-tax at the rates in force from the amount of interest payable.
The rate at which tax is deductible under section 193 is 10%, both in the case of domestic companies and non-corporate resident assessees.
Tax should be deducted at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.
Where any income by way of interest on securities is credited to any account in the books of account of the person liable to pay such income, such crediting is deemed to be credit of such income to the account of the payee and tax has to be deducted at source. The account to which such interest is credited may be called “Interest Payable account” or “Suspense account” or by any other name.
No tax deduction is to be made from any interest payable:
Accordingly, the Central Government has, vide Notification No. 27 & 28/2018, dated 18-06-2018, notified-
(i) “Power Finance Corporation Limited 54EC Capital Gains Bond”
issued by Power Finance Corporation Limited {PFCL} and
(ii) “Indian Railway Finance Corporation Limited 54EC Capital Gains Bond” issued by Indian Railway Finance Corporation Limited {IRFCL}
Thus, no tax is required to be deducted at source on interest payable on “Power Finance Corporation Limited 54EC Capital Gains Bond” and “Indian Railway Finance Corporation Limited 54EC Capital Gains Bond”.
Note – It may be noted that tax has to be deducted at source in respect of interest payable on 8% Savings (Taxable) Bonds, 2003, or 7.75% Savings (Taxable) Bonds, 2018, only if such interest payable exceeds ₹ 10,000 during the financial year.
This section deals with the scheme of deduction of tax at source from interest other than interest on securities. The main provisions are the following:
This section applies only to interest, other than “interest on securities”, credited or paid by assessees other than individuals or Hindu undivided family. However, an individual or Hindu undivided family whose total sales, gross receipts or turnover from the business or profession carried on by him exceed ₹ 1 crore in case of business and ₹ 50 lakhs in case of profession during the immediately preceding financial year is liable to deduct tax at source under this section.
The deduction of tax must be made at the time of crediting such interest to the account of the payee or at the time of its payment in cash or by any other mode, whichever is earlier.
Where any such interest is credited to any account in the books of account of the person liable to pay such income, such crediting is deemed to be credit of such income to the account of the payee and the tax has to be deducted at source. The account to which such interest is credited may be called “Interest Payable account” or “Suspense account” or by any other name.
The CBDT has, vide Circular No.3/2010 dated 2.3.2010, given a clarification regarding deduction of tax at source on payment of interest on time deposits under section 194A by banks following Core-branch Banking Solutions (CBS) software. It has been clarified that Explanation to section 194A is not meant to apply in cases of banks where credit is made to provisioning account on daily/monthly basis for the purpose of macro monitoring only by the use of CBS software. It has been further clarified that since no constructive credit to the depositor’s/payee’s account takes place while calculating interest on time deposits on daily or monthly basis in the CBS software used by banks, tax need not be deducted at source on such provisioning of interest by banks for the purposes of macro monitoring only. In such cases, tax shall be deducted at source on accrual of interest at the end of financial year or at periodic intervals as per practice of the bank or as per the depositor's/ payee's requirement or on maturity or on encashment of time deposits, whichever event takes place earlier, whenever the aggregate of amounts of interest income credited or paid or likely to be credited or paid during the financial year by the banks exceeds the limits specified in section 194A.
Note - The time for making the payment of tax deducted at source would reckon from the date of credit of interest made constructively to the account of the payee.
The rate at which the deduction is to be made is given in Part II of the First Schedule to the Annual Finance Act. The rate at which tax is to be deducted is 10% both in the case of non-corporate resident assessees and domestic companies.
No deduction of tax shall be made in the following cases:
In respect of (i), (ii) and (iii) above, the limit is ₹50,000, in case of payee, being a senior citizen.
The limit will be calculated with respect to income credited or paid by a branch of a banking company or a co-operative society or a public company in case of:
The threshold limit will be reckoned with reference to the total interest credited or paid by the banking company or the co-operative society or the public company, as the case may be, (and not with reference to each branch), where such banking company or co-operative society or public company has adopted core banking solutions.
Section 206A requires every banking company or co-operative society or public company referred to in above to prepare such statement, for such period as may be prescribed
The statement should be in the prescribed form and should be delivered to the DGIT (Systems) or person authorized by him.
From a combined reading of (e) and (f), it can be inferred that a co- operative bank other than mentioned in (i) above is required to deduct tax at source on payment of interest on time deposit to its members. However, it is not required to deduct tax from the payment of interest on time deposit, to a depositor, being a co-operative society.
However, a cooperative society referred to in (e) or (f) is liable to deduct tax if –
Thus, such co-operative society is required to deduct tax under section 194A on interest credited or paid by it –
The Central Government is empowered to issue notification for non- deduction of tax at source or deduction of tax at a lower rate, from such payment to such person or class of persons, specified in that notification.
Section 194C provides for deduction of tax at source from the payment made to resident contractors and sub-contractors.
Tax has to be deducted at source under section 194C by any person responsible for paying any sum to a resident contractor for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the –
Tax has to be deducted at the time of payment of such sum or at the time of credit of such sum to the account of the contractor, whichever is earlier.
Where any such sum is credited to any account in the books of account of the person liable to pay such income, such crediting is deemed to be credit of such income to the account of the payee and the tax has to be deducted at source. The account to which such sum is credited may be called “Suspense account” or by any other name.
However, no tax has to be deducted at source in respect of payments made by individuals/HUF to a contractor exclusively for personal purposes.
The rate of TDS under section 194C on payments to contractors would be 1%, where the payee is an individual or HUF and 2 % in respect of other payees. The same rates of TDS would apply for both contractors and sub- contractors.
The applicable rates of TDS under section 194C are as follows –
|
Payee |
TDS rate |
|
Individual HUF contractor/sub-contractor |
1% |
|
Other than individual/HUF contractor/ sub-contractor |
2% |
|
Contractor in transport business (if PAN is furnished) |
Nil |
|
Sub-contractor in transport business (if PAN is furnished) |
Nil |
No deduction will be required to be made if the consideration for the contract does not exceed ₹ 30,000. However, to prevent the practice of composite contracts being split up into contracts valued at less ₹30,000 than to avoid tax deduction, it has been provided that tax will be required to be deducted at source where the amount credited or paid or likely to be credited or paid to a contractor or sub-contractor exceeds ₹30,000 in a single payment or ₹ 1,00,000 in the aggregate during a financial year.
Therefore, even if a single payment to a contractor does not exceed ₹ 30,000, TDS provisions under section 194C would be attracted where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid to the contractor during the financial year exceeds ₹1,00,000.
Work includes –
However, “work” shall not include manufacturing or supplying a product according to the requirement or specification of a customer by using raw material purchased from a person, other than such customer or associate of such customer, as such a contract is a contract for ‘sale’. However, this will not be applicable to a contract which does not entail manufacture or supply of an article or thing (e.g. a construction contract).
It may be noted that the term “work” would include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer or its associate. In such a case, tax shall be deducted on the invoice value excluding the value of material purchased from such customer or its associate, if such value is mentioned separately in the invoice. Where the material component has not been separately mentioned in the invoice, tax shall be deducted on the whole of the invoice value.
No deduction is required to be made from the sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor, during the course of the business of plying, hiring or leasing goods carriages, if he furnishes his PAN to the deductor.
In order to convey the true intent of law, it has been clarified that this relaxation from the requirement to deduct tax at source shall only be applicable to the payment in the nature of transport charges (whether paid by a person engaged in the business of transport or otherwise) made to a contractor, who fulfills the following three conditions cumulatively -
Meaning of Goods carriage:
Goods carriage means -
The term “motor vehicle” does not include vehicles having less than four wheels and with engine capacity not exceeding 25cc as well as vehicles running on rails or vehicles adapted for use in a factory or in enclosed premises.
Any person other than an individual or HUF, who is responsible for paying any income by way of commission (other than insurance commission) or brokerage to a resident shall deduct income tax at the rate of 5%.
However, an individual or HUF whose total sales, gross receipts or turnover from the business or profession carried on by him exceed ₹ 1 crore in case of business and ₹ 50 lakhs in case of profession during the financial year immediately preceding financial year in which such commission or brokerage is credited or paid, is liable to deduct tax at source.
The deduction shall be made at the time such income is credited to the account of the payee or at the time of payment in cash or by issue of cheque or draft or by any other mode, whichever is earlier.
Even where income is credited to some other account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit to the account of the payee for the purposes of this section.
No deduction is required if the amount of such income or the aggregate of such amount does not exceed ₹15,000 during the financial year.
“Commission or brokerage” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person
This section is not applicable to professional “Professional Services” means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as notified by the CBDT for the purpose of compulsory maintenance of books of account under section 44AA.
Further, there would be no requirement to deduct tax at source on commission or brokerage payments by BSNL or MTNL to their public call office (PCO) franchisees.
There are two types of payments involved in the advertising business:
The applicability of TDS on these payments has already been dealt with in Circular No. 715 dated 8-8-1995, where it has been clarified in Question Nos. 1 & 2 that while TDS under section 194C (as work contract) will be applicable on the first type of payment, there will be no TDS under section 194C on the second type of payment e.g. payment by advertising agency to the media company.
However, another issue has been raised in various cases as to whether the fees/charges taken or retained by advertising companies from media companies for canvasing/booking advertisements (typically 15% of the billing) is ‘commission’ or ‘discount’ for attracting the provisions of section 194H.
The CBDT has clarified that no TDS is attracted on payments made by television channels/newspaper companies to the advertising agency for booking or procuring of or canvassing for advertisements. It is also further clarified that ‘commission’ referred to in Question No.27 of the CBDT’s Circular No. 715 dated 8-8-1995 does not refer to payments by media companies to advertising companies for booking of advertisements but to payments for engagement of models, artists, photographers, sportspersons, etc. and, therefore, is not relevant to the issue of TDS referred to in this Circular.
Any person other than individual or HUF, who is responsible for paying to a resident any income by way of rent, is liable to deduct tax at source.
However, an individual or HUF whose total sales, gross receipts or turnover from the business or profession carried on by him exceed ₹ 1 crore in case of business and ₹ 50 lakhs in case of profession during the financial year immediately preceding financial year in which such rent was credited or paid, is liable to deduct tax at source.
Tax has to be deducted at the rate of:
This deduction is to be made at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier.
Where any such income is credited to any account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section will apply accordingly.
No deduction need be made where the amount of such income or the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of the payee does not exceed ₹ 2,40,000.
“Rent” means any payment, by whatever name called, under any lease, sub- lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any –
whether or not any or all of the above are owned by the payee.
CBDT Circular No.1/2008 dated 10.1.2008 provides clarification regarding applicability of provisions of section 194-I to payments made by the customers on account of cooling charges to the cold storage owners.
The main function of the cold storage is to preserve perishable goods by means of a mechanical process, and storage of such goods is only incidental in nature. The customer is also not given any right to use any demarcated space/place or the machinery of the cold store and thus does not become a tenant. Therefore, the provisions of 194-I are not applicable to the cooling charges paid by the customers of the cold storage.
However, since the arrangement between the customers and cold storage owners are basically contractual in nature, the provision of section 194-C will be applicable to the amounts paid as cooling charges by the customers of the cold storage.
The primary requirement of any payment to qualify as rent is that the payment must be for the use of land and building and mere incidental/minor/ insignificant use of the same while providing other facilities and service would not make it a payment for use of land and buildings so as to attract section 194-I.
Accordingly, the CBDT has, vide this circular, clarified that the provisions of section 194-I shall not be applicable on payment of PSF by an airline to Airport Operator.
CBDT Circular No.4/2008 dated 28.4.2008 provides clarification on deduction of tax at source (TDS) on service tax component of rental income under section 194-I.
As per the provisions of 194-I, tax is deductible at source on income by way of rent paid to any resident. Further, rent has been defined in 194-I to mean any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,-
whether or not any or all of the above are owned by the payee.
Service tax paid by the tenant doesn’t partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore, tax deduction at source under section 194-I would be required to be made on the amount of rent paid/payable without including the service tax.
Note - It is possible to take a view that the clarification given in Circular No.4/2008 would apply in the GST regime also.
Clarification regarding TDS on Goods and Services Tax (GST) component comprised in payments made to residents [Circular No. 23/2017 dated 19.07.2017]
The CBDT has, vide this circular, clarified that wherever in terms of the agreement or contract between the payer and the payee, the component of ‘GST on services’ comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source on the amount paid or payable without including such ‘GST on services’ component.
GST shall include Integrated Goods and Services Tax, Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax.
Further, for the purposes of this Circular, any reference to “service tax” in an existing agreement or contract which was entered into prior to 01.07.2017 shall be treated as “GST on services” with respect to the period from 01.07.2017 onward till the expiry of such agreement or contract.
The issue of whether or not TDS under section 194-I is applicable on ‘lump sum lease premium’ or ‘one-time upfront lease charges” paid by an assessee for acquiring long-term leasehold rights for land or any other property has been examined by the CBDT.
Accordingly, the CBDT has, vide this Circular, clarified that lump sum lease premium or one-time upfront lease charges, which are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any other property are not payments in the nature of rent within the meaning of section 194-I. Therefore, such payments are not liable for TDS under section 194-I.
Section 194-IB requires any person, being individual or HUF, other than those individual or HUF whose total sales, gross receipts or turnover from the business or profession exceeds ₹ 1 crore in case of business and ₹ 50 lakhs in case of profession in the financial year immediately preceding the financial year in which such rent was credited or paid, responsible for paying to a resident any income by way of rent, to deduct income tax @5%.
Under this section, tax has to be deducted at source only if the amount of such rent exceeds ₹ 50,000 for a month or part of a month during the previous year.
This deduction is to be made at the time of credit of such rent, for the last month of the previous year or the last month of tenancy, if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier.
The provisions of section 203A containing the requirement of obtaining Tax deduction account number (TAN) shall not apply to the person required to deduct tax in accordance with the provisions of section 194-IB.
“Rent” means any payment, by whatever name called, under any lease, sub- lease, tenancy or any other agreement or arrangement for the use of any land or building or both.
Where the tax is required to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be [Section 206AA providing for deduction of tax at source at a higher rate is discussed at length later on in this chapter]
Every person other than an individual or a HUF, who is responsible for paying to a resident any sum by way of –
shall deduct tax at source at the rate of –
However, in case of a payee, engaged only in the business of operation of call centre, the tax shall be deducted at source @ 2%
The deduction is to be made at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.
Where such sum is credited to any account, whether called suspense account or by any other name, in the books of accounts of the person liable to pay such sum, such crediting shall be deemed to be credit of such sum to the account of the payee and tax has to be deducted accordingly.
No tax deduction is required if the amount of fees or the aggregate of the amounts of fees credited or paid or likely to be credited or paid during a financial year does not exceed ₹ 30,000 in the case of fees for professional services, ₹ 30,000 in the case of fees for technical services, ₹ 30,000 in the case of royalty and ₹30,000 in the case of non-compete fees.
The limit of ₹ 30,000 under section 194J is applicable separately for fees for professional services, fees for technical services, royalty and non-compete fees referred to in section 28(va). It implies that if the payment to a person towards each of the above is less than ₹ 30,000, no tax is required to be deducted at source, even though the aggregate payment or credit exceeds ₹ 30,000. However, there is no such exemption limit for deduction of tax on any remuneration or fees or commission payable to director of a company .
Summary of rates and threshold limit under section 194J for deduction of tax at source
|
Nature of payment |
TDS rate |
Separate Limit |
|
Fees for technical services (not being professional services) |
2% |
₹ 30,000 |
|
Fees for professional services |
10% |
₹ 30,000 |
|
Royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films |
2% |
₹ 30,000 |
|
Other royalty |
10% |
|
|
Any remuneration or fees or commission, by whatever name called, other than those on which tax is deductible under section 192, to a director of a company |
10% |
Nil |
|
Non-compete fees |
10% |
₹ 30,000 |
In case of a payee, engaged only in the business of operation of call centre, the tax shall be deducted at source @2%
However, an individual or HUF, whose total sales, gross receipts or turnover from business or profession carried by him exceeds ₹ 1 crore in case of business or ₹ 50 lakhs in case of profession in the financial year immediately preceding the financial year in which the fees for professional services or fees for technical services is credited or paid is required to deduct tax on such fees.
Since this provision requires such individuals/HUFs to deduct tax at source only in respect of fees for professional services or fees for technical services, it can be inferred that individuals and HUFs are not required to deduct tax at source under section 194J on royalty and non-compete fees.
“Professional services” means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the CBDT for the purposes of section 44AA or of this section.
Other professions notified for the purposes of section 44AA are as follows:
The CBDT has notified the services rendered by following persons in relation to the sports activities as Professional Services for the purpose of the section 194J:
Accordingly, the requirement of TDS as per section 194J would apply to all the aforesaid professions. The term “profession”, as such, is of a very wide import. However, the term has been defined in this section exhaustively. For the purposes of TDS, therefore, all other professions would be outside the scope of section 194J. For example, this section will not apply to professions of teaching, sculpture, painting etc. unless they are notified.
The term ‘fees for technical services’ means any consideration (including any lump sum consideration) for rendering of any of the following services:
It is expressly provided that the term ‘fees for technical services’ will not include following types of consideration:
The CBDT has, through Circular No.8/2009 dated 24.11.2009, clarified that TPAs (Third Party Administrator’s) who are making payment on behalf of insurance companies to hospitals for settlement of medical/insurance claims etc. under various schemes including cashless schemes are liable to deduct tax at source under section 194J on all such payments to hospitals etc. This is because the services rendered by hospitals to various patients are primarily medical services and, therefore, the provisions of section 194J are applicable to payments made by TPAs to hospitals etc.
As per section 9(1)(vi), any income payable by way of royalty in respect of any right, property or information is deemed to accrue or arise in India. The term “royalty” means consideration for transfer of all or any right in respect of certain rights, property or information.
As per Explanation 4 to section 9(1)(vi), the consideration for use or right to use of computer software would be royalty. This Explanation clarifies that transfer of all or any rights in respect of any right, property or information includes and has always included transfer of all or any right for use or right to use a computer software (including granting of a licence) irrespective of the medium through which such right is transferred.
Consequently, the provisions of tax deduction at source under section 194J would be attracted in respect of consideration for use or right to use computer software since the same falls within the definition of royalty as per the provisions of the Income-tax Act, 1961.
The Central Government has, vide Notification No.21/2012 dated 13.6.2012, effective from 1st July, 2012, exempted certain software payments from the applicability of tax deduction under section 194J. Accordingly, where payment is made by the transferee for acquisition of software from a resident-transferor, the provisions of section 194J would not be attracted if-
Section 194M provides for deduction of tax at source @5% by an individual or a HUF responsible for paying any sum during the financial year to any resident –
It may be noted that only individuals and HUFs (other than those who are required to deduct income-tax as per the provisions of section 194C or 194H or 194J) are required to deduct tax in respect of the above sums payable during the financial year to a resident.
The tax should be deducted at the time of credit of such sum or at the time of payment of such sum, whichever is earlier.
No tax is required to be deducted where such sum or, as the case may be, aggregate amount of such sums credited or paid to a resident during the financial year does not exceed ₹50,00,000.
An individual or a Hindu undivided family is not liable to deduct tax at source u/s 194M if –
The provisions of section 203A containing the requirement of obtaining Tax deduction account number (TAN) shall not apply to the person required to deduct tax in accordance with the provisions of section 194M.
Note - For the meaning of the terms “Work”, “Professional services” and “Commission or brokerage” refer sub-heading “3.4 Payments to contractors and sub-contractors [Section 194C]”, “3.8 Fees for professional or technical services [Section 194J]” and “3.5 Commission or brokerage [Section 194H]”, respectively.
Section 194N provides that every person, being
who is responsible for paying any sum, being the amount or aggregate of amounts, as the case may be, in cash exceeding ₹ 1 crore during the previous year, to any person from one or more accounts maintained by such recipient-person with it, shall deduct tax at source @2% of such sum
However, if the recipient is a co-operative society, tax is required to be deducted on any sum exceeding ₹ 3 crore.
This deduction is to be made at the time of payment of such sum.
If the recipient has not furnished the returns of income for all the three assessment years relevant to the three previous years, for which the time limit to file return of income under section 139(1) has expired, immediately preceding the previous year in which the payment of the sum is made, “the sum” shall mean the amount or the aggregate of amounts, as the case may be, in cash > ₹ 20 lakhs during the previous year, and the tax shall be deducted at the rate of -
However, the Central Government is empowered to specify, with the consultation of RBI, by notification, the recipient in whose case this provision shall not apply or apply at reduced rate, subject to the satisfaction of the conditions specified in such notification.
Liability to deduct tax at source under section 194N shall not be applicable to any payment made to –
The Central Government may specify, with the consultation of RBI, by notification, the recipient in whose case section 194N shall not apply or apply at reduced rate, subject to the satisfaction of the conditions specified in such notification.
Example
The persons referred to in (i) to (vi) in Column (2) of the table below have always been filing their returns of income on or before the due date u/s 139(1). The persons mentioned in (vii) to (x) in Column (2) of the table below have not filed their returns of income for the last five years. Determine the liability of deduction of tax at source u/s 194N by the bank/co-operative bank referred to in column (3) of the table below in each of the following individual cases, assuming that this is the only withdrawal in the P.Y.2023-24 by the persons referred to in Column (2).
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
|
|
Person making the withdrawal |
Bank/Co- operative Bank from which money is withdrawn |
Date of withdrawal |
Amount of withdrawal (₹) |
TDS u/s 194N (₹) |
|
(i) |
Mr. Harishit |
SBI |
1.7.2023 |
1,10,00,000 |
₹ 10,00,000 x2% = ₹ 20,000 |
|
(ii) |
Mr. Pranav |
SBI |
1.8.2023 |
90,00,000 |
Nil (since withdrawals <₹ 1 crore) |
|
(iii) |
ABC Co-operative Society |
SBI |
1.9.2023 |
2,70,00,000 |
Nil (since withdrawals <₹ 3 crore) |
|
(iv) |
XYZ Co-operative Society |
MNO Co-operative bank |
1.9.2023 |
3,10,00,000 |
₹ 10,00,000 x2% = ₹ 20,000 |
|
(v) |
Mr. Vaibhav |
MNO Co-operative bank |
1.9.2023 |
2,10,00,000 |
₹ 1,10,00,000 x2% = ₹ 2,20,000 |
|
(vi) |
A Ltd. |
MNO Co-operative bank |
1.10.2023 |
1,05,00,000 |
₹ 5,00,000 x 2%= ₹ 10,000 |
|
(vii) |
M/s. DEF & Co., a firm |
MNO Co-operative bank |
1.2.2024 |
90,00,000 |
₹ 70,00,000 x2% = ₹ 1,40,000 |
|
(viii) |
Mr. Varun |
BOI |
1.2.2024 |
1,20,00,000 |
₹ 80,00,000 x 2% (+) ₹ 20,00,000 x 5% = ₹ 2,60,000 |
|
(ix) |
Mr. Rakesh |
BOI |
1.2.2024 |
45,00,000 |
₹ 25,00,000 x 2% = ₹ 50,000 |
|
(x) |
PQR Co- operative Society |
BOI |
1.2.2024 |
3,30,00,000 |
₹2,80,00,000 x 2% (+) ₹ 30,00,000 x 5% = ₹ 7,10,000 |
The other TDS provisions are given below in tabular form -
| Section | Nature of payment | Threshold Limit for deduction of tax at source | Payer | Payee | Rate of TDS | Time of deduction | Other relevant points |
| 192A | Premature withdrawal from Employees’ Provident Fund | Payment or aggregate payment ≥₹ 50,000 | Trustees of the EPF Scheme or any authorised person under the Scheme | Individual (Employee) | 10% on premature taxable withdrawal | At the time of payment |
Exemption from TDS 1. Withdrawal after continuous service of 5 years 2. In case of withdrawal before continuous service of 5 years and – (a) employee opts for transfer of accumulated balance to the new employer (b) termination is due to ill health, contraction or discontinuance of business, cessation of employment etc. |
| 194 | Dividend (including dividends on preference shares) | Amount or aggregate amount >₹ 5,000 in a F.Y., in case of dividend paid or credited to an individual shareholder by any mode other than cash > No threshold in other cases | The Principal Officer of a domestic company | Resident shareholder | 10% | Before making any payment by any mode in respect of any dividend or before making any distribution or payment of dividend. |
Exemption from TDS Dividend credited or paid to - (a) LIC, GIC, subsidiaries of GIC or any other insurer provided the shares are owned by them, or they have full beneficial interest in such shares (b) any other person as may be notified by the Central Government. |
|
194B |
Winnings from any lottery, crossword puzzle or card game or other game of any sort or from gambling or betting of any form or nature (other than winnings from any online game in respect of which TDS u/s 194BA would be applicable) | Amount or the aggregate of amounts > ₹ 10,000 in a F.Y. | The person responsible for paying income by way of such winnings | Any Person | 30% | At the time of payment. |
(a) Where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before releasing the winnings,ensure that tax has been paid in respect of the winnings. (b) Where winnings are to be credited and losses are to be debited to the individual a/c of the punter, tax has to be deducted on winnings before set-off of losses. Thereafter, the net amount, after deduction of tax and losses, has to be paid to the winner. |
| 194BA | Winnings from online games | On the net winnings in a person’s user account as computed in prescribed manner. | Any person responsible for paying income by way of such winnings | Any person | 30% |
At the end of the F.Y. In case, there is withdrawal from user account during the F.Y., tax would be deducted at the time of such withdrawal on net winnings comprised in such withdrawal.In addition, tax would also be deducted on the remaining amount of net winnings in the user account as computed in prescribed manner at the end of the F.Y. |
Where the net winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the net winnings, the person responsible for paying shall, before releasing the winnings, ensure that tax has been paid in respect of the net winnings. Meaning of certain terms: Online gaming intermediary – An intermediary that offers one or more online games. User– Any person who accesses or avails any computer resource of an online gaming intermediary. User account – Account of a user registered with an online gaming intermediary. |
| 194BB | Winnings from horse race | Amount or aggregate of amounts > ₹10,000 in a F.Y. | Book Maker or a person holding licence for horse racing or for arranging for wagering or betting in any race course. | Any Person | 30% | At the time of payment | ‘Any horse race’ includes, wherever the circumstances so necessitate, more than one horse race. |
| 194D | Insurance Commission | Amount or aggregate amount > ₹15,000 in a F.Y. | Any person responsible for paying any income by way of remuneration or reward for soliciting or procuring insurance business (including the business relating to the continuance, renewal or revival of policies of insurance) | Any Resident | 5%, if the payee is non-corporate resident 10%, if the payee is domestic company | At the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier. | |
|
194DA |
Any sum under a Life Insurance Policy not fulfilling the conditions specified u/s 10(10D) | Amount or aggregate amount ≥ ₹1,00,000 in a financial year | Any person responsible for paying any sum under a LIP, including the sum allocated by way of bonus | Any resident | 5% of the amount of income comprised therein | At the time of payment |
Exemption from TDS The sum received under a life insurance policy which fulfills the conditions specified under section 10(10D). |
| 194G | Commission on sale of lottery tickets | > ₹15,000 in a F.Y. | Any person responsible for paying any income by way of commission,remuneration or prize (by whatever name called) on lottery tickets | Any person stocking, distributing, purchasing or selling lottery tickets | 5% | At the time of credit of such income to the account of the payee or at the time of payment,whichever is earlier. | Where income is credited to some other account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit to the account of the payee for the purposes of this section. |
| 194-IA | Payment on transfer of certain immovable property other than agricultural land | ≥ ₹ 50 lakh (Consideration for transfer or stamp duty value) | Any person,being a transferee (other than a person referred to in section 194LA responsible for paying compensation for compulsory acquisition of immovable property other than rural agricultural land) | Resident transferor |
1% of consideration for transfer or stamp duty value, whichever is higher. No requirement of obtaining TAN u/s 203A. |
At the time of credit of such sum to the account of the transferor or at the time of payment, whichever is earlier. |
Meaning of consideration for transfer of immovable property Consideration for transfer of immovable property include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property. |
| 194K | Income on units other than in the nature of capital gains | Amount or aggregate amount >₹ 5,000 in a F.Y. | Any person responsible for paying any income in respect of units of a mutual fund/Administrator of the specified undertaking/ specified company | Any resident |
10% |
At the time of credit of such sum to the account of the payee or at the time of payment, whichever is earlier. |
|
| 194LA | Compensation on acquisition of certain immovable property (other than agricultural land situated in India)Compensation on acquisition of certain immovable property (other than agricultural land situated in India) | Amount or aggregate amount >₹ 2,50,000 in a F.Y. | Any person responsible for paying any sum in the nature of compensation or enhanced compensation on compulsory acquisition of immovable property (other than agricultural land situated in India) | Any Resident |
10% |
At the time of payment |
TDS provisions are not applicable on compensation on acquisition of agricultural land in India, whether rural or urban. |
| 194P | Pension (along with interest on bank account) |
Basic exemption limit [₹3,00,000 (in case the specified senior citizen pays tax under the default tax regime u/s 115BAC), ₹3,00,000 / ₹5,00,000, as the case may be,if the specified senior citizen has exercised the option of shifting out of the default tax regime providing u/s 115BAC] [i.e.,total income after giving effect to the deduction allowable under Chapter VI-A, if any allowable should exceed the basic exemption limit. Further, in case the individual is entitled to rebate u/s 87A from tax payable, then the same should be given effect to] |
Notified specified bank (a banking company which is a scheduled bank and has been appointed as agents of RBI u/s 45 of the RBI Act, 1934 |
Specified senior citizen |
Rates in force, where the individual has exercised the option of shifting out of the default tax regime. Rates specified in section 115BAC, where the individual pays tax under the default tax regime.
|
Specified senior citizen means an individual, being a resident in India, who – - is of the age of 75 years or more at any time during the P.Y.; - is having pension income and no other income except interest income received or receivable from any account maintained by such individual in the same specified bank in which he is receiving his pension income; and - has furnished a declaration to the specified bank. Specified bank to compute the total income for the relevant A.Y. of the specified senior citizen who furnishes declaration in prescribed form, and deduct income-tax, after giving effect to deduction under Chapter VI-A, if any allowable (on the basis of evidence furnished by the specified senior citizen) and rebate allowable u/s 87A. [CBDT Notification No. 99/2021 dated 2.9.2021] The provisions of section 139, relating to filing of return, would not apply to a specified senior citizen for the A.Y. relevant to the P.Y. in which tax has been deducted u/s 194P(1).
|
|
| 194Q | Purchase of goods |
>₹ 50 lakhs in a previous year |
Buyer, who is responsible for paying any sum to any resident for purchase of goods. Buyer means a person whose total sales, gross receipts or turnover from business exceeds ₹10 crores during the FY immediately preceding the FY in which the purchase of goods is carried out.
|
Any resident |
0.1% of sum exceeding₹50 lakhs |
At the time of credit of such sum to the account of the seller or at the time of payment, whichever is earlier. |
Non-applicability of TDS u/s 194Q Transactions on which (a) Tax is deductible under any of the provisions of the Act; (b) Tax is collectible u/s 206C, other than section 206C(1H) In case of a transaction to which both section 206(1H) and section 194Q applies, tax is required to be deducted u/s 194Q. Other points Where the sum is credited to any account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit to the account of the payee for the purposes of this section.
|
| 194R |
Any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. The provisions would apply to any benefit or perquisite, whether in cash or in kind or partly in cash and partly in kind. |
Value or aggregate of value of benefit or perquisite > ₹ 20,000 in a F.Y. |
Any person (other than an individual or HUF whose total sales, gross receipts or turnover does not exceed ₹1 crore in case of business or ₹50 lakhs in case of profession during the immediately preceding F.Y.) responsible for providing to a resident, any benefit or perquisite. In case of a company,“person responsible for paying” means the company itself including the Principal Officer thereof.
|
Any resident |
10% of value or aggre. of value of such benefit or perquisite |
Before providing such benefit or perquisite |
Where the benefit or perquisite is wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such benefit or perquisite, the person responsible for providing such benefit or perquisite shall, before releasing the benefit or perquisite, ensure that tax has been paid in respect of the benefit or perquisite. |
Where, under an agreement or other arrangement, the tax chargeable on any income referred to in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then, for the purposes of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon, be equal to the net amount payable under such agreement or arrangment.
However, no grossing up is required in the case of tax paid under section 192(1A) by an employer on the non-monetary perquisites provided to the employee.
When an amount is paid net of tax, the taxability has to be calculated by grossing up the amount, since the tax itself represents the income of the payee.
No deduction of tax shall be made by any person from any sums payable to -
This provision for non-deduction is applicable when such sum is payable to the above entities by way of -
This section applies where, in the case of any income of any person or sum payable to any person, income-tax is required to be deducted at the time of credit or payment, as the case may be, at the rates in force as per the provisions of sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA and 194M.
In such cases, the assessee can make an application to the Assessing Officer for deduction of tax at a lower rate or for non-deduction of tax.
If the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at lower rates or no deduction of income-tax, as the case may be, he may give to the assessee such certificate, as may be appropriate.
Where the Assessing Officer issues such a certificate, then the person responsible for paying the income shall deduct income-tax at such lower rates specified in the certificate or deduct no tax, as the case may be, until such certificate is cancelled by the Assessing Officer.
Enabling powers have been conferred upon the CBDT to make rules for prescribing the procedure in this regard.
This section enables an individual, who is resident in India and whose estimated total income of the previous year is less than the basic exemption limit, to receive dividend, without deduction of tax at source under section 194 on furnishing a declaration in duplicate in the prescribed form [Form 15G] and verified in the prescribed manner.
The declaration in the above form is to be furnished in writing in duplicate by the declarant to the person responsible for paying any income of the nature referred to in section The declaration will have to be to the effect that the tax on the estimated total income of the declarant of the previous year in which such income is to be included in computing his total income will be Nil.
No deduction of tax shall be made under the above provisions of the Act, where a person, who is not a company or a firm, furnishes to the person responsible for paying any income of the nature referred to in these sections, a declaration in writing in duplicate in the prescribed form [Form 15G] to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be Nil.
Declaration cannot be furnished as per the above provisions, where -
credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the basic exemption limit.
For a resident individual, who is of the age of 60 years or more at any time during the previous year, no deduction of tax shall be made under section 192A or section 193 or section 194 or section 194A or section 194D or section 194DA or section 194EE or section 194-I or section 194K, if such individual furnishes a declaration in writing in duplicate in Form 15H to the payer, that tax on his estimated total income of the previous year in which such income is to be included in computing his total income is Nil. The restriction contained in sub-section (1B) will not apply to resident senior citizens.
Payments to notified person or class of persons including institutions/class of institutions etc. [Sub-section (1F)]
No deduction of tax shall be made or deduction of tax shall be made at such lower rate, from such payment to such person or class of persons, including institution, association or body or class of institutions or associations or bodies as may be notified by the Central Government in the Official Gazette in this behalf. Therefore, in respect of such payments made to notified person or class of persons, no tax is to be deducted at source or tax is to be deducted at lower rate.
On receipt of the declaration referred to in sub-sections (1), (1A) or (1C), the person responsible for making the payment will be required to deliver or cause to be delivered to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, one copy of the declaration on or before the 7th of the month following the month in which the declaration is furnished to him.
All sums deducted in accordance with the foregoing provisions shall, for the purpose of computing the income of an assessee, be deemed to be income received.
However, the following tax paid or deducted would not be deemed to be income received by the assessee for the purpose of computing the total income –
Tax deducted at source in accordance with the above provisions and paid to the credit of the Central Government shall be treated as payment of tax on behalf of the-
Any sum referred to in section 192(1A) and paid to the Central Government, shall be treated as the tax paid on behalf of the person in respect of whose income, such payment of tax has been made.
The CBDT is empowered to frame rules for the purpose of giving credit in respect of tax deducted or tax paid under Chapter The CBDT also has the power to make rules for giving credit to a person other than the persons mentioned in above. Further, the CBDT can specify the assessment year for which such credit may be given.
The persons responsible for deducting the tax at source should deposit the sum so deducted to the credit of the Central Government or as the Board directs, within the prescribed time.
Further, an employer paying tax on non-monetary perquisites provided to employees in accordance with section 192(1A), should deposit within the prescribed time, the tax to the credit of the Central Government or as the Board directs.
Rule 30 prescribes the time and mode of payment to Government account of TDS or tax paid under section 192(1A) and Rule 31A provides for submission of quarterly statements by every person responsible for deduction of tax.
However, every person responsible for deduction of tax under section 194- IA, 194-IB or 194M have to furnish to the Principal Director General of Income-tax (Systems) (in case of sections 194-IB and 194M) or Director General of Income-tax (System) or the person authorised by them, a challan-cum-statement in Form No.26QB, 26QC or 26QD respectively, within thirty days from the end of the month of deduction of tax.
At present, all statements of tax deducted at source are filed in an electronic mode, thereby facilitating computerised processing of these Therefore, in order to process TDS statements on computer, electronic processing on the same lines as processing of income-tax returns has been provided in section 200A.
The following adjustments can be made during the computerized processing of statement of tax deducted at source or a correction statement –
The term “an incorrect claim apparent from any information in the statement” shall mean such claim on the basis of an entry, in the statement,–
The interest, if any, has to be computed on the basis of the sums deductible as computed in the statement;
The fee, if any, has to be computed in accordance with the provision of section A fee of ₹ 200 for every day would be levied under section 234E 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/collectible and such fee has to be paid before delivering the TDS statement.
The sum payable by, or the amount of refund due to, the deductor has to be determined after adjustment of interest and fee against the amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee.
An intimation will be prepared and generated and sent to the deductor, specifying his tax liability or the refund due, within one year from the end of the financial year in which the statement is filed. The refund due shall be granted to the deductor.
For this purpose, the CBDT is empowered to make a scheme for centralized processing of statements of TDS to determine the tax payable by, or refund due to, the deductor.
Any person including the principal officer of a company -
shall be deemed to be an assessee-in-default, if he does not deduct, or does not pay or after deducting, fails to pay, the whole or any part of the tax, as required by or under the provisions of the Income-tax Act, 1961.
Any person (including the principal officer of the company) who fails to deduct the whole or any part of the tax on the amount credited or paid to a payee shall not be deemed to be an assessee-in-default in respect of such tax if such payee –
and the payer furnishes a certificate to this effect from an accountant in such form as may be prescribed.
A person deemed to be an assessee-in-default under section 201(1), for failure to deduct tax or to pay the tax after deduction, is liable to pay simple interest @1% for every month or part of month on the amount of such tax from the date on which tax was deductible to the date on which such tax was actually deducted and simple interest @ 1½% for every month or part of month from the date on which tax was deducted to the date on which such tax is actually paid [Section 201(1A)].
Such interest should be paid before furnishing the statements in accordance with section 200(3).
Where the payer fails to deduct the whole or any part of the tax on the amount credited or payment made to a payee and is not deemed to be an assessee-in-default under section 201(1) on account of payment of taxes by such payee, interest under section 201(1A)(i) e.,@1% p.m. or part of month, shall be payable by the payer from the date on which such tax was deductible to the date of furnishing of return of income by such payee. The date of deduction and payment of taxes by the payer shall be deemed to be the date on which return of income has been furnished by the payee.
However, where an order is made by the Assessing Officer for assessee-in-default, the interest shall be paid by the person in accordance with such order.
Where the tax has not been paid after it is deducted, the amount of the tax together with the amount of simple interest thereon shall be a charge upon all the assets of the person or the company, as the case may be.
Every person deducting tax at source have to issue a certificate to the effect that tax has been deducted and specify the amount so deducted, the rate at which tax has been deducted and such other particulars as may be prescribed.
Every person, being an employer, referred to in section 192(1A) shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed.
Certificate of TDS to be furnished under section 203 [Rule 31]
The certificate of deduction of tax at source to be furnished under section 203 shall be in Form No.16 in respect of tax deducted or paid under section 192 and in any other case, Form No.16A.
Form No.16 shall be issued to the employee annually by 15th June of the financial year immediately following the financial year in which the income was paid and tax deducted. Form No.16A shall be issued quarterly within 15 days from the due date for furnishing the statement of TDS under Rule 31A.
Form No. 16B, 16C or 16D shall be issued by the every person responsible for deduction of tax under section 194-IA, 194-IB or 194M to the payee within fifteen days from the due date for furnishing the challan-cum- statement in Form No. 26QB, 26QC or 26QD, respectively, under rule 31A.
Note – The entire TDS process can be understood at a glance from the diagram given in the next page. The reference to Rules and Forms are only for the information of students. They are, however, not required to memorize the Rule numbers and Form numbers for examination purposes.
For purposes of deduction of tax at source the expression “person responsible for paying” means:
|
|
Nature of income/payment |
Person responsible for paying tax |
|
(1) |
Salary (other than payment of salaries by the Central or State Government) |
(i) the employer himself; or (ii) if the employer is a company, the company itself, including the principal officer thereof. |
|
(2) |
Interest on securities (other than payments by or on behalf of the Central or State Government) |
the local authority, corporation or company, including the principal officer thereof. |
|
(3) |
Any sum payable to a non- resident Indian, representing consideration for the transfer by him of any foreign exchange asset, which is not a short term capital asset |
the “Authorised Person” responsible for remitting such sum to the non-resident Indian or for crediting such sum to his Non-resident (External) Account maintained in accordance with the Foreign Exchange Management Act, 1999 and any rules made thereunder. |
|
(4) |
furnishing of information relating to payment to a non- corporate non-resident, or to a foreign company, of any sum, whether or not chargeable under the provisions of this Act |
(i) the payer himself; or (ii) if the payer is a company, the company itself including the principal officer thereof. |
|
(5) |
Credit/payment of any other sum chargeable under the provisions of the Act |
(i) the payer himself; or (ii) if the payer is a company, the company itself including the principal officer thereof. |
|
(6) |
Credit/payment of any sum chargeable under the provisions of the Act made by or on behalf of the Central Government or the Government of a State. |
(i) the drawing and disbursing officer; or (ii) any other person, by whatever name called, responsible for crediting, or as the case may be, paying such sum. |
|
(7) |
In case of a person not resident in India (irrespective of the nature of payment or income) |
(i) the person himself; or (ii) any person authorized by such person; or (iii) the agent of such person in India including any person treated as an agent under section 163. |
Where tax is deductible at source under any of the aforesaid sections, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income.
The non-furnishing of PAN by deductees in many cases have led to delay in issue of refund on account of problems in the processing of returns of income and in granting credit for tax deducted at source.
With a view to strengthening the PAN mechanism, section 206AA provides that any person whose receipts are subject to deduction of tax at source e. the deductee, shall mandatorily furnish his PAN to the deductor failing which the deductor shall deduct tax at source at higher of the following rates –
For instance, in case of rental payment for plant and machinery, where the payee does not furnish his PAN to the payer, tax would be deductible @20% instead of @2% prescribed under section 194-I. However, non-furnishing of PAN by the deductee in case of income by way of winnings from lotteries, card games etc., would result in tax being deducted at the existing rate of 30% under section 194B. Therefore, wherever tax is deductible at a rate higher than 20%, this provision would not have any impact.
Tax would be deductible at the rates mentioned above also in cases where the taxpayer files a declaration in Form 15G or 15H (under section 197A) but does not provide his PAN.
Further, no certificate under section 197 will be granted by the Assessing Officer unless the application contains the PAN of the applicant.
Both the deductor and the deductee have to compulsorily quote the PAN of the deductee in all correspondence, bills, vouchers and other documents exchanged between them.
If the PAN provided to the deductor is invalid or it does not belong to the deductee, it shall be deemed that the deductee has not furnished his PAN to the Accordingly, tax would be deductible at the rate specified in (2) above.
Note: The applicability of provisions of section 206AA on non-resident will be dealt with at the Final Level.
Section 206AB requires tax to be deducted at source under the provisions of this Chapter on any sum or income or amount paid, or payable or credited, by a person to a specified person, at higher of the following rates –
However, section 206AB is not applicable in case of tax deductible at source under sections 192, 192A, 194B, 194BA, 194BB, 194-IA, 194-IB, 194M or 194N.
However, the specified person would not include
a non-resident who does not have a permanent establishment in India; or
a person who is not required to furnish the return of income for the assessment year relevant to the said previous year and is notified by the Central Government in this behalf.
7. ADVANCE PAYMENT OF TAX [SECTIONS 207 TO 219]
Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219, in respect of an assessee’s current income e. the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year [Section 207].
Under section 208, obligation to pay advance tax arises in every case where the advance tax payable is ₹ 10,000 or
Note - An assessee who is liable to pay advance tax of less than ₹ 10,000 will not be saddled with interest under sections 234B and 234C for defaults in payment of advance tax. However, the consequences under section 234A regarding interest for belated filing of return would be attracted.
In case of senior citizens who have passive source of income like interest, rent, , the requirement of payment of advance tax causes genuine compliance hardship. Therefore, in order to reduce the compliance burden on such senior citizens, exemption from payment of advance tax has been provided to a resident individual-
Such senior citizens need not pay advance tax and are allowed to discharge their tax liability (other than TDS) by payment of self-assessment tax.
An assessee has to estimate his current income and pay advance tax He need not submit any estimate or statement of income to the Assessing Officer, except where he has been served with notice by the Assessing Officer.
Where an obligation to pay advance tax has arisen, the assessee shall himself compute the advance tax payable on his current income at the rates in force in the financial year and deposit the same, whether or not he has been earlier assessed to tax.
In the case of a person who has been already assessed by way of a regular assessment in respect of the total income of any previous year, the Assessing Officer, if he is of the opinion that such person is liable to pay advance tax, may serve an order under section 210(3) requiring the assessee to pay advance tax.
For this purpose, the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment or the total income returned by the assessee in any return of income for any subsequent previous year, whichever is higher, shall be taken as the basis for computation of advance tax payable.
The above order can be served by the Assessing Officer at any time during the financial year but not later than the last date of February.
If, after sending the above notice, but before 1st March of the financial year, the assessee furnishes a return relating to any later previous year or an assessment is completed in respect of a later return of income, the Assessing Officer may amend the order for payment of advance tax on the basis of the computation of the income so returned or assessed.
If the assessee feels that his own estimate of advance tax payable would be less than the one sent by the Assessing Officer, he can file estimate of his current income and advance tax payable thereon.
Where the advance tax payable on assessee’s estimation is higher than the tax computed by the Assessing Officer, then, the advance tax shall be paid based upon such higher amount.
In all cases, the tax calculated shall be reduced by the amount of tax deductible at source.
The amount of advance tax payable by an assessee in the financial year calculated by -
is subject to the provisions of section 209(2), as per which the net agricultural income has to be considered for the purpose of computing advance tax.
|
Due date of instalment |
Amount payable |
|
On or before 15th June |
Not less than 15% of advance tax liability |
|
On or before 15th September |
Not less than 45% of advance tax liability, as reduced by the amount, if any, paid in the earlier instalment. |
|
On or before 15th December |
Not less than 75% of advance tax liability, as reduced by the amount or amounts, if any, paid in the earlier instalment or instalments. |
|
On or before 15th March |
The whole amount of advance tax liability as reduced by the amount or amounts, if any, paid in the earlier instalment or instalments. |
Note - Any amount paid by way of advance tax on or before 31st March shall also be treated as advance tax paid during each financial year ending on 31st March.
An eligible assessee, opting for computation of profits or gains of business on presumptive basis in respect of eligible business referred to in section 44AD(1) or for computation of profits or gains of profession on presumptive basis in respect of eligible profession referred to in section 44ADA(1), shall be required to pay advance tax of the whole amount in one instalment on or before 15th March of the financial year.
However, any amount paid by way of advance tax on or before 31st March shall also be treated as advance tax paid during each financial year ending on 31st March.
If the last day for payment of any instalment of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the interest leviable under sections 234B and 234C would not be charged.
Where advance tax is payable by virtue of the notice of demand issued8 by the Assessing Officer, the whole or the appropriate part of the advance tax specified in such notice shall be payable on or before each of such due dates as fall after the date of service of notice of demand.
Where the assessee does not pay any instalment by the due date, he shall be deemed to be an assessee in default in respect of such instalment.
Any sum, other than interest or penalty, paid by or recovered from an assessee as advance tax, is treated as a payment of tax in respect of the income of the previous year and credit thereof shall be given in the regular assessment.
Interest under section 234B is attracted for non-payment of advance tax or payment of advance tax of an amount less than 90% of assessed tax.
The interest liability would be 1% per month or part of the month from 1st April following the financial year upto the date of determination of income under section 143(1) and where a regular assessment is made, upto the date of such regular assessment.
Such interest is calculated on the amount of difference between the assessed tax and the advance tax paid.
Assessed tax is the tax calculated on total income determined under section 143(1) and where a regular assessment is made, the tax on the total income determined under such regular assessment less
Tax on the total income determined under section 143(1) would not include the additional income-tax, if any, payable under section 140B or section 143.
Tax on the total income determined under such regular assessment would not include the additional income-tax, if any, payable under section 140B.
However, where self-assessment tax is paid by the assessee under section 140A or otherwise, interest shall be calculated upto the date of payment of such tax and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section. Thereafter, interest shall be calculated at 1% on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.
In case an assessee, other than an assessee who declares profits and gains in accordance with the provisions of section 44AD(1) or section 44ADA(1), who is liable to pay advance tax under section 208 has failed to pay such tax or the advance tax paid by such assessee on its current income on or before the dates specified in column (1) is less than the specified percentage [given in column (2)] of tax due on returned income, then simple interest@1% per month for the period specified in column (4) on the amount of shortfall, as per column (3) is leviable under section 234C.
|
Specified date |
Specified % |
Shortfall in advance tax |
Period |
|
(1) |
(2) |
(3) |
(4) |
|
15th June |
15% |
15% of tax due on returned income (-) advance tax paid up to 15th June |
3 months |
|
15th September |
45% |
45% of tax due on returned income (-) advance tax paid up to 15th September |
3 months |
|
15th December |
75% |
75% of tax due on returned income (-) advance tax paid up to 15th December |
3 months |
|
15th March |
100% |
100% of tax due on returned income (-) advance tax paid up to 15th March |
1 month |
In case an assessee who declares profits and gains in accordance with the section 44AD(1) or section 44ADA(1), as the case may be, who is liable to pay advance tax under section 208 has failed to pay such tax or the advance tax paid by the assessee on its current income on or before 15th March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of 1% on the amount of the shortfall from the tax due on the returned income.
Interest under section 234C shall not be leviable in respect of any shortfall in payment of tax due on returned income, where such shortfall is on account of under-estimation of or failure to estimate –
However, the assessee should have paid the whole of the amount of tax payable in respect of such income referred to in (i), (ii), (iii) or (iv), as the case may be, had such income been a part of the total income, as part of the remaining instalments of advance tax which are due or where no such instalments are due, by 31st March of the financial year.
Tax due on returned income means the tax calculated on total income declared in the return furnished by the assessee less
(i) Sale of certain goods
Under section 206C(1), sellers of certain goods are required to collect tax from the buyers at the specified rates. The specified percentage for collection of tax at source is as follows:
|
|
Nature of Goods |
Percentage |
|
(a) |
Alcoholic liquor for human consumption |
1% |
|
(b) |
Tendu leaves |
5% |
|
(c) |
Timber obtained under a forest lease |
2.5% |
|
(d) |
Timber obtained by any mode other than (c) |
2.5% |
|
(e) |
Any other forest produce not being timber or tendu leaves |
2.5% |
|
(f) |
Scrap |
1% |
|
(g) |
Minerals, being coal or lignite or iron ore |
1% |
The tax should be collected at the time of debiting of the amount payable by the buyer to his account or at the time of receipt of such amount from the buyer, whichever is earlier.
No collection of tax shall be made under section 206C(1), in the case of a resident buyer, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that goods referred to in section 206C(1) above are to be utilised for the purpose of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes.
Section 206C(1C) provides for collection of tax by every person who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest in any
to another person (other than a public sector company) for the use of such parking lot or toll plaza or mine or quarry for the purposes of business. The tax shall be collected as provided, from the licensee or lessee of any such licence, contract or lease of the specified nature, at the rate of 2%.
Mining and quarrying would not include mining and quarrying of mineral oil. Mineral oil includes petroleum and natural gas.
The tax should be collected at the time of debiting of the amount payable by the licensee or lessee to his account or at the time of receipt of such amount from the licensee or lessee, whichever is earlier.
Section 206C(1F) provides that every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding ₹ 10 lakhs, shall, at the time of receipt of such amount, collect tax from the buyer@1% of the sale consideration.
Section 206C(1G) provides for collection of tax by every person,
Tax has to be collected at the time of debiting the amount payable by the buyer or at the time of receipt of such amount from the said buyer, by any mode, whichever is earlier.
Rate of TCS in case of collection by an authorized dealer/ seller of an overseas tour programme package
| S. No. | Amount and purpose of remittance | Rate of TCS upto 30.9.2023 | Rate of TCS on or after 1.10.2023 |
| (i) | Where the amount is for purchase of an overseas tour programme package | 5% of such amount (without any threshold limit | 5% till ₹ 7 lakhs, 20% thereafter |
| (ii) | (a) Where the amount is remitted for the purpose of education or medical treatment; and | Nil (No tax to be collected at source) | |
| (b) the amount or aggregate of the amounts being remitted by a buyer is less than ₹ 7 lakhs in a financial year | |||
| (iii) | (a) Where the amount is remitted for the purpose other than mentioned in (ii) above; and | Nil (No tax to be collected at source) | |
| (b) the amount or aggregate of the amounts being remitted by a buyer is less than ₹ 7 lakhs in a financial year | |||
| (iv) | (a) where the amount is remitted for the purpose of education or medical treatment; and | 5% of the amt or agg. of amts in excess of ₹ 7 lakh |
|
| (b) the amount or aggregate of the amounts in excess of ₹ 7 lakhs is remitted by the buyer in a financial year | |||
| (v) | (a) where the amount is remitted for the purpose other than mentioned in (iv) above; and | 5% of the amt or agg. of amts in excess of ₹ 7 lakh |
20% of the amt or agg. of amts in excess of ₹ 7 lakh |
| (b) the amount or aggregate of the amounts in excess of ₹ 7 lakhs is remitted by the buyer in a financial year | |||
| (vi) | (a) where the amount being remitted out is a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education; and | 0.5% of the amt or agg. of amts in excess of ₹ 7 lakh |
|
| (b) the amount or aggregate of the amounts in excess of ₹ 7 lakhs is remitted by the buyer in a financial year | |||
Cases where no tax is to be collected
|
(i) |
No TCS by the authorized dealer on an amount in respect of which the sum has been collected by the seller |
|
(ii) |
No TCS, if the buyer is liable to deduct tax at source under any other provision of the Act and has deducted such tax |
|
(iii) |
No TCS, if the buyer is the Central Government, a State Government, an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State, a local authority9 or any other person notified by the Central Government, subject to fulfillment of conditions stipulated thereunder. Accordingly, the CBDT has, vide notification no. 99/2022 dated 17.8.2022, notified that the provisions of section 206C(1G) would not apply to a person (being a buyer) who is a non- resident in India in terms of section 6 and does not have a permanent establishment in India. |
(v) Sale of goods of value exceeding ₹ 50 lakh
In case of any difficulty arises in giving effect to the provisions of section 206C(1G)/(1H), the CBDT is empowered to issue guidelines, with the approval of the Central Government, for the purpose of removing the difficulty.
Every guideline issued by the CBDT shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the person liable to collect tax.
|
|
Term |
Meaning |
|
(i) |
Overseas tour program package |
For section 206C(1G) Any tour package which offers visit to a country/(ies) or territory/(ies) outside India. It includes expenses for travel or hotel stay or boarding or lodging or any other expenditure of similar nature or in relation thereto. [Clause (ii) of Explanation to section 206C(1G)] |
|
(ii) |
Buyer |
For section 206C(1H): A person who purchases any goods but does not include – (A) the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State, or (B) a local authority7; or (C) a person importing goods into India or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to stipulated conditions. For section 206C(1): A person who obtains in any sale, by way of auction, tender, or any other mode, goods of the nature specified in the Table in point (1) or the right to receive any such goods but does not include – (A) a public sector company, the Central Government, a State Government, and an embassy, a high commission, legation, commission, consulate and the trade representation, of a foreign State and a club, or (B) a buyer in the retail sale of such goods purchased by him for personal consumption [Explanation to section 206C] For section 206C(1F): A person who obtains in any sale, goods of the nature specified therein, but does not include – (A) the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or (B) a local authority; or (C) a public sector company which is engaged in the business of carrying passengers. [Explanation to section 206C] |
|
(iii) |
Seller |
For section 206C(1H): A person whose total sales, gross receipts or turnover from the business carried on by him exceed ₹ 10 crores during the financial year immediately preceding the financial year in which sale of goods is carried out. However, seller does not include a person as notified by the Central Government for this purpose, subject to fulfillment of the stipulated conditions [Clause (b) of Explanation to section 206C(1H)] For section 206C(1) and section 206C(1F):
Seller also includes an individual or a HUF whose total sales, gross receipts or turnover from the business or profession carried on by him exceed ₹ 1 crore in case of business and ₹ 50 lakhs in case of profession during the financial year immediately preceding the financial year in which the goods of the nature specified in the Table in point (1) are sold. [Explanation to section 206C] |
|
(iv) |
Scrap |
Waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons. [Explanation to section 206C] |
(3) Higher rate of TCS for non-furnishers of PAN [Section 206CC]
However, the maximum the rate of TCS under this section shall not exceed 20%.
However, the maximum the rate of TCS under this section shall not exceed 20%.
However, the specified person would not include -
These amendments in section 206C have given rise to certain issues relating to the scope and applicability of the provisions. Accordingly, the CBDT has, vide Circular No. 22/2016 dated 8.6.2016, clarified the following issues in “Question & Answer (Q&A)” format.
A. To bring high value transactions within the tax net, section 206C has been amended to provide that the seller shall collect the tax @ 1% from the purchaser on sale of motor vehicle of the value exceeding ₹ 10 lakhs. This is brought to cover all transactions of retail sales and accordingly, it will not apply on sale of motor vehicles by manufacturers to dealers/distributors.
A. No, as per section 206C(1F), the seller shall collect tax@1% from the purchaser on sale of any motor vehicle of the value exceeding ₹ 10 lakhs.
A. Government, institutions notified under United Nations (Privileges and Immunities) Act 1947, and Embassies, Consulates, High Commission,Legation, Commission and trade representation of a foreign State shall not be liable to levy of TCS@1% under section 206C(1F).
A. Tax is to be collected at source@1% on sale consideration of a motor vehicle exceeding ₹ 10 lakhs. It is applicable to each sale and not to aggregate value of sale made during the year.
A. The definition of "Seller" as given in clause (c) of the Explanation below sub-section (11) of section 206C shall be applicable in the case of sale of motor vehicles also.
A. The provisions of TCS on sale of motor vehicle exceeding ₹ 10 lakhs is not dependent on mode of payment. Any sale of motor vehicle exceeding ₹ 10 lakhs would attract TCS@1%.
In exercise of the power to issue guidelines, the CBDT has, with the approval of Central Government, vide Circular no. 17/2020 dated 29.9.2020, issued the following guidelines for removing certain difficulties-
1. Applicability on sale of Motor vehicle:
The provisions of section 206C(1F) apply to sale of motor vehicle of the value exceeding ₹ 10 lakhs. Section 206C(1H) excludes from its applicability goods covered under section 206C(1F). It may be noted that the scope of sections 206C(1H) and (1F) are different. While section 206C(1F) is based on single sale of motor vehicle, section 206C(1H) is for receipt above ₹ 50 lakhs. Hence, in order to remove difficulty that whether all motor vehicles are excluded from the applicability of section 206C(1H), it is clarified that,-
2. Adjustment for sale return, discount or indirect taxes:
It is been clarified that no adjustment on account of sale return or discount or indirect taxes including GST is required to be made for collection of tax under section 206C(1H) since the collection is made with reference to receipt of amount of sale consideration.
Note – It can be inferred that no adjustment for GST is required to be made under section 206C(1F) also, since collection is made with reference to receipt of amount of sale consideration.
(7) Furnishing declaration within specified time [Section 206C(1B)]
The person responsible for collecting tax under this section shall deliver or cause to be delivered to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner one copy of the declaration referred to in sub-section (1A) on or before 7th of the month next following the month in which the declaration is furnished to him.
(8) TCS to be paid within prescribed time [Section 206C(3)]
Any amount collected under this section shall be paid within the prescribed time to the credit of the Central Government or as the Board directs.
Time limit for paying tax collected to the credit of the Central Government [Rule 37CA]
| Person collecting sums in accordance with section 206C | Circumstance | Period within which such sum should be paid to the credit of the Central Government | ||
| (1) | An office of the Government | (i) | where the tax is paid without production of an income-tax challan | on the same day |
| (ii) | where tax is paid accompanied by an income-tax challan | on or before 7 days from the end of the month in which the collection is made | ||
| (2) | Collectors other than an office of the Government | within one week from the last day of the month in which the collection is made | ||
(9) Main differences between TDS and TCS
| TDS | TCS | |
| (1) | TDS is tax deducation at source | TCS is tax collection at source. |
| (2) | Person responsible for paying is required to deduct tax at source at the prescribed rate. |
(i) Seller of certain goods is responsible for collecting tax at source at the prescribed rate from the buyer. (ii) Person who grants licence or lease (in respect of any parking lot, toll plaza, mine or quarry) is responsible for collecting tax at source at the prescribed rate from the licensee or lessee, as the case may be. (iii) Authorised dealer receiving amount for remittance under the LRS of the RBI or seller of an overseas tour program package is responsible for collecting tax at source at the prescribed rate from the buyer. |
| (3) |
Generally, tax is required to be deducted at the time of credit to the account of the payee or at the time of payment, whichever is earlier. However, in case of payment of salary, payment in respect of life insurance policy etc. tax is required to be deducted at the time of payment. |
Generally, tax is required to be collected at source at the time of debiting of the amount payable by the buyer of certain goods to the account of the buyer or at the time of receipt of such amount from the said buyer, whichever is earlier. However, in case of sale of motor vehicle of the value exceeding ₹ 10 lakhs and sale of goods exceeding ₹ 50 lakhs other than exported goods and goods mentioned in section 206C(1), tax collection at source u/s 206C(1F) and 206C(1H), respectively, is required at the time of receipt of sale consideration. |
Note – TCS will be dealt with in detail at the Final level.
(10) Common number for TDS and TCS [Section 203A]
Persons responsible for deducting tax or collecting tax at source should apply to the Assessing Officer for the allotment of a “tax- deduction and collection-account number”.
Section 203A(2) enlists the documents/certificates/returns/challans in which the “tax deduction account number” or “tax collection account number” or “tax deduction and collection account number” has to be compulsorily quoted.
The requirement of obtaining and quoting of TAN under section 203A shall not apply to such person, as may be notified by the Central Government in this behalf.
Ruchika Saboo
An All India Ranker (AIR 7 - CA Finals, AIR 43 - CA Inter), she is one of those teachers who just loved studying as a student. Aims to bring the same drive in her students.
Ruchika Ma'am has been a meritorious student throughout her student life. She is one of those who did not study from exam point of view or out of fear but because of the fact that she JUST LOVED STUDYING. When she says - love what you study, it has a deeper meaning.
She believes - "When you study, you get wise, you obtain knowledge. A knowledge that helps you in real life, in solving problems, finding opportunities. Implement what you study". She has a huge affinity for the Law Subject in particular and always encourages student to - "STUDY FROM THE BARE ACT, MAKE YOUR OWN INTERPRETATIONS". A rare practice that you will find in her video lectures as well.
She specializes in theory subjects - Law and Auditing.
Yashvardhan Saboo
A Story teller, passionate for simplifying complexities, techie. Perfectionist by heart, he is the founder of - Konceptca.
Yash Sir (As students call him fondly) is not a teacher per se. He is a story teller who specializes in simplifying things, connecting the dots and building a story behind everything he teaches. A firm believer of Real Teaching, according to him - "Real Teaching is not teaching standard methods but giving the power to students to develop his own methods".
He cleared his CA Finals in May 2011 and has been into teaching since. He started teaching CA, CS, 11th, 12th, B.Com, M.Com students in an offline mode until 2016 when Konceptca was launched. One of the pioneers in Online Education, he believes in providing a learning experience which is NEAT, SMOOTH and AFFORDABLE.
He specializes in practical subjects – Accounting, Costing, Taxation, Financial Management. With over 12 years of teaching experience (Online as well as Offline), he SURELY KNOWS IT ALL.
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