Amendments Pertaining to TDS/TCS - Finance Bill 2022

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1.??????Section 194-IA -TDS on purchase of Immovable Property.

Effective from 01st April 2022

(i) In sub-section (1), after the words “one percent of such sum”, the words “or the stamp duty value of such property, whichever is higher,” shall be inserted;

(ii) In sub-section (2), for the words “immovable property is”, the words “immovable property and the stamp duty value of such property, are both,” shall be inserted;

(iii) In the explanation, after clause (b), the following clause shall be inserted, namely:––

‘(c) “stamp duty value” shall have the same meaning as assigned to it in clause (f) of the explanation to clause (vii) of sub-section (2) of section 56.’

2.??????Section 194-IB-TDS on payment of rent by Individual or HUF, effective from 01st April 2022

In sub-section (4), the words, figures and letters “or section 206AB” shall be omitted.

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3.??????Section 194R- TDS on benefit of perquisite in respect of business or profession. (New Section)

Effective from 01st April 2022

Any person responsible for providing to a resident, any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession, by such resident, shall, before providing such benefit or perquisite, as the case may be, to such resident, ensure that tax has been deducted in respect of such benefit or perquisite at the rate of ten percent of the value or aggregate of value of such benefit or perquisite:

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Provided that in a case where the benefit or perquisite, as the case may be, is wholly in kind or partly in cash and partly in kind but such 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:

Provided further that the provisions of this section shall not apply in case of a resident where the value or aggregate of value of the benefit or perquisite provided or likely to be provided to such resident during the financial year does not exceed twenty thousand rupees:

Provided also that the provisions of this section shall not apply to a person being an individual or a Hindu undivided 81 family, whose total sales, gross receipts or turnover does not exceed one Crore rupees in case of business or fifty lakh rupees in case of profession, during the financial year, preceding the financial year in which such benefit or perquisite, as the case may be, is provided by such person.

For the purposes of this section, the expression “person responsible for providing” means the person providing such benefit or perquisite, or in case of a company, the company itself including the principal officer thereof.

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4.??????Section 194S- TDS on Payment on transfer of virtual digital asset, (New Section)

Effective from 1st July 2022

Any person responsible for paying to a resident any sum by way of consideration for transfer of a virtual digital asset, shall, at the time of credit of such sum to the account of the resident or at the time of payment of such sum by any mode, whichever is earlier, deduct an amount equal to one percent of such sum as income-tax thereon:

Provided that in a case where the consideration for transfer of virtual digital asset is

(a) Wholly in kind or in exchange of another virtual digital asset, where there is no part in cash; or

(b) 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 transfer, the person responsible for paying such consideration shall, before releasing the consideration, ensure that tax has been paid in respect of such consideration for the transfer of virtual digital asset.

???????????????(2) The provisions of sections 203A and 206AB shall not apply to a specified person.

(3) Not withstanding anything contained in sub-section (1), no tax shall be deducted in a case, where –

(a) The consideration is payable by a specified person and the value or aggregate value of such consideration does not exceed fifty thousand rupees during the financial year; or

(b) The consideration is payable by any person other than a specified person and the value or aggregate value of such consideration does not exceed ten thousand rupees during the financial year.

(4) Not withstanding anything contained in this Chapter, a transaction in respect of which tax has been deducted under sub-section (1) shall not be liable to deduction or collection of tax at source under any other provisions of this Chapter.

(5) Where any sum referred to in sub-section (1) 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 sum, such credit of the sum shall be deemed to be the credit of such sum to the account of the payee and the provisions of this section shall apply accordingly.

(6) If any difficulty arises in giving effect to the provisions of this section, the Board may, with the prior approval of the Central Government, issue guidelines for the purposes of removing the difficulty.

(7) Every guideline issued by the Board under sub-section (6) shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the person responsible for paying the consideration on transfer of such virtual digital asset.

(8) Notwithstanding anything contained in section 194-O, in case of a transaction to which the provisions of the said section are also applicable along with the provisions of this section, then, tax shall be deducted under sub-section

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(1)???Explanation-For the purposes of this section “specified person” means a person,–– (a) being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not exceed one crore rupees in case of business or

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Fifty lakh rupees in case of profession, during the financial year immediately preceding the financial year in which such virtual digital asset is transferred;

(b) Being an individual or a Hindu undivided family, not having any income under the head “Profits and gains of business or profession.”

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5.??????Section 201 Consequences of Non- Compliance to TDS

Effective from 1st April 2022

“Provided further that where an order is made by the Assessing Officer for the default under sub-section (1), the interest shall be paid by the person in accordance with such order.”

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6.??????Section 206AB – Deduction & Collection at Higher Rate

Effective from 1st April 2022

(a) In sub-section (1),––

(i) For the figures, letters and word “194LBC or 194N”, the figures, letters and word “194-IA, 194-IB, 194LBC, 194M or 194N” shall be substituted;

(ii) The brackets and words “(hereafter referred to as deductee)” shall be omitted;

(b) In sub-section (3), for the portion beginning with the words “filed the returns of income” and ending with the words “each of these two previous years: the following shall be substituted, namely––

“Furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted, for which the time limit for furnishing the return of income under sub-section (1) of section 139 has expired and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in the said previous year.”

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7.??????Section 206C of the Income-tax Act, in sub-section (7), after the proviso, the following proviso shall be inserted, namely: Effective from 1st April 2022

“Provided further that where an order is made by the Assessing Officer for the default under sub-section (6A), the interest shall be paid by the person in accordance with such order.”

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8.??????Section 206CCA of the Income-tax Act,––

Effective from 1st April 2022

(a) In sub-section (1), The brackets and words “(hereafter referred to as collectee)” shall be omitted; (b) in sub-section (3), for the portion beginning with the words “filed the returns of income” and ending with the words “each of these two previous years:”, the following shall be substituted, namely:

“Furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be collected, for which the time limit for furnishing the return of income under sub-section (1) of section 139 has expired and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in the said previous year.