GST on Perks, TDS & Remuneration Planning by Dr. Vinod Singhania
Significant changes have been made in the last few months to stimulate economic growth. Implementation of these initiatives will have far reaching implications both at macro and micro level. Besides, the Finance Act, 2017 and CGST Act, 2017 have made significant changes for persons involved in tax deduction and administration of GST in a company.
All important changes affecting corporate tax, personal tax, TDS, remuneration planning, perquisite taxation for TDS and GST, retirement benefitswill be discussed in the interactive conference.
Besides these changes, Dr. Vinod K. Singhania will discuss TDS under section 192, 192A, 194C, 194-I, 194-IA, 194-IB,194J and 195, contemporary issues on TDS (including correction statements pertaining to quarterly TDS returns).
Finance Act, 2017
- Important amendments pertaining to corporate tax, personal tax, tax deduction/collection at source made by the Finance Act, 2017.
- Tax planning devices pertaining to aforesaid amendments.
TDS on Salary under section 192
- Obligation of employer under section 192.
- Estimation of employees’ salary. Other incomes of employees. Losses declared by employees.
- Form No. 12BB
- Preparation of Form No. 16 in different situations – When an employee has joined or left during a financial year, details of other incomes/loss of employees in Form No. 16, details of tax deducted by others in respect of other income reported by employees in Form No. 16.
- Employers’ obligation in respect of computation of relief under section 89 and providing deduction under sections 80C to 80U.
- Quarterly return in Form No. 24Q in electronic format.
TDS on payments other than salary
- TDS under section 194C
- TDS under section 194DA
- TDS under section 194-I
- TDS under section 194-IA
- TDS under section 194-IB
- TDS under section 194J
- TDS under section 195
- Consequences of TDS defaults
Tax on perquisites
- Tax on different perquisites provided to employees (like – rent-free/concessional accommodation, car, driver, education, domestic servant, interest-free/concessional loan, sweat equity shares, touring/travelling facility, gift, club facility, credit card facility, meal vouchers, refreshments, use of movable assets, transfer of movable assets, medical facility, leave travel concession).
- Tax-free perquisites.
- Tax planning devices – How to convert within legal parameter a taxable perquisite into tax-free perquisite or perquisite taxable at concessional rate.
- Documentation required
GST on perk/perquisite provided to employees
- Whether perk/perquisite provided to employees in the course of employment is “supply” under CGST Act, 2017.
- GST on such “supply”.
- When such “supply” is exempt from GST.
- Taxation on gratuity, leave encashment, pension, provident fund, VRS payments.
- Tax liability under new pension scheme.
- Tax planning devices including investment planning.
- Remuneration planning to minimize employees’ tax liability.
- Restructuring of present remuneration plan keeping in view present and future tax liability of employees.
- General guidelines for tax planning. Importance of different documents to get exemption in respect of allowances and perquisites.
Contemporary issues in TDS
- Sections 234E and 271H
- TDS default and consequences of subsequent payment by deductee
- Refund of TDS
- Revised quarterly TDS/TCS returns
- Impact of section 206AA.
- Implication of section 206AA in respect of deduction of tax under different provisions including overseas payments.
- Preparationand filing of e-TDS Return
- Online rectification of TDS
Case studies and question answers
Managers/Senior Executives from
3. HRD Department and
4. All those who are concerned with Tax Deduction at Source and Financial Management Decisions.
Dr. Vinod K. Singhania
- Renowned tax consultant –Associated as senior tax consultant with several business houses and professional institutes in India and abroad
- Seminar/workshops in tax laws – Key speaker in more than 750 seminars/ workshops in India and abroad
- Published work in Tax Laws -More than 40 books published by Taxmann and 300 research articles published in different magazines and journals
- Research experience in tax laws– 30 years in guiding Ph.D students and undertaking research in different aspects of taxation in India and abroad
If you are facing any of the following queries pertaining to tax deduction at source, attend the forthcoming interactive seminar of Dr. Vinod K Singhania at JW Marriott, Mumbai on September 21, 2016, The Lalit, New Delhi on September 24, 2016 or Courtyard Marriott, Chennai on September 27, 2016 –
Query 1 – A new employee is joining our company in the first week of October 2016. Previously, he is employed by Ritesh Textiles Ltd. Is it obligatory for us to consider previous employer’s salary while calculating TDS from salary payment by our company? What are the consequences if previous employer’s salaryis not made available to us by the employee joining our company?
Query 2 – Ramesh joined our company in July 2013. He is going to leave the company in the next month (i.e., October 2016). His employment period is less than 5 years. We have recognised provident fund. Are you liable to deduct tax from provident fund payment within the parameters of section 192A ?
Query 3 – I am responsible for tax deduction at source from salary payment. My company belongs to Manchanda Group in Maharashtra. This group has 6 companies. Some of the senior employees are employed simultaneously in two companies belonging to the Manchanda Group. In some cases, furnished residential house is provided by one company but salary is received from two companies. Car is provided by one company but it is used for official purposes of two companies. My problem is how to ascertain taxable value of perquisite in respect of residential house and car in such cases.
Query 4 – An employee of our company has got arrears of bonus of approximately Rs. 13 lakh during the current year. This bonus pertains to financial years 2013-14 and 2014-15. In which year this bonus is taxable for TDS purposes. Employee is insisting that relief is available under section 89. Finance Officer of the company does not want to give 89 relief on the plea that the same can be claimed in personal assessment by the employee. What is the correct legal position ?
Query 5 – An employee of our company gets rental income from a subsidiary of our company. Subsidiary company deducts TDS from rent payment under section 194-I. In our company, from salary income we deduct TDS under section 192. Is it our obligation to include rental income of the employee while estimating TDS under section 192 from salary payment ?
Query 6 – An employee of our company gets fixed deposit bank interest to the tune of Rs. 15 lakh. It is necessary for us to include the income of Rs. 15 lakh for calculating salary TDS under section 192 ?
Query 7 – Is it necessary to take Form No. 12BB from employees who get house rent allowance from the company? Similarly, is it now compulsory to take information pertaining to investments, LTC, home loan interest from every employee in Form No. 12BB?Will it be legally correct if Form No. 12BB is taken online? Can we refuse to give HRA exemption if Form No. 12BB is not submitted by the concerned employee ?Likewise, is it possible for TDS Officer to disallow Chapter VI-A deductions (section 80C, etc.) if investment details and evidence are not submitted by an employee in Form No. 12BB. What is the liability of the employer if Form No. 12BB is submitted but information given therein by an employee is incorrect ? An employee submits Form No. 12BB and declares that he will purchase NSC in the last week of March 2017 (no other evidence for purchase of NSC is included). What is the correct legal position for giving 80C deduction for TDS purpose in such cases ?
Query 8 – An employee wants that no tax should be deducted from his salary till December 2016. He wants that TDS liability of the entire year may be deducted from salary payable during January, February and March 2017. In such a case, what will be the duty of the person responsible for the tax deduction at source (can he deduct TDS of the whole year in three instalments from salary payable during January and March).
Query 9 – Our company has given a car to the Deputy Finance Officer for official and personal use. Petrol bills are reimbursed on actual basis. The Finance Officer has employed a driver. He wants reimbursment of driver’s salary. How perk value of car and driver would be calculated for TDS purposes in such a case ?
Query 10 – My accountant does not want to give 80C deduction pertaining to interest on NSC which I have purchased in last 3 financial years. Is he legally correct ?
Query 11 – An employee wants a deduction of Rs. 10,000 under section 80TTA pertaining to interest on savings bank account. He has given a copy of bank passbook where interest is credited in his savings bank account. TDS Officer of the company wants to include interest on savings bank in the salary income of the employee and then he is ready to give deduction under section 80TTA. However, the concerned employee wants the benefit of deduction under section 80TTA without including interest on savings bank. What is the legal position ?
Query 12 – An employee joins our company in September 2016. From the previous employer, he was getting house rent allowance (exemption under section 10(13A) was given by the previous employer). In our company, HRA is not available. He wants to claim deduction under section 80GG. Is it possible for our company to give 80GG deduction for calculating TDS ?
Query 13 – An employee has taken a loan to purchase a house property. The house property is given on rent. After deduction of interest on loan, income from the let out property is negative. He wants to set off house property loss against salary income and insists that TDS should be calculated only on the net income. What is the correct legal position – to adjust (or not to adjust) negative house property income from salary income while calculating TDS under section 192 ?
Query 14 – An employee is co-owner of a house (the other co-owner is spouse of the employee). The property was purchased by the employee and his spouse by taking a housing loan from SBI. However, the employee pays the entire EMI (consisting of interest and repayment of loan). He wants to claim full deduction of interest under section 24(b) and full deduction of repayment of loan under section 80C. Can TDS Officer give full deduction when the liability of the employee is only to the extent of 50 per cent?
Query 15 – An employee (who gets HRA from the company) pays rent to his wife (house is jointly owned by the employee and his wife). Is it correct to give HRA exemption in such a case ? The employee is ready to give this information in Form No. 12BB.
Query 16 – An employee (who gets HRA from the company) resides in a rented property and claims HRA exemption. He owns a property in the same city/different city and also wants a deduction of Rs. 2 lakh pertaining to interest on housing loan taken to purchase the property. Is it legally correct to give HRA exemption as well as deduction of interest on housing loan ?
Query 17 – An employee want deduction of Rs. 5,000 pertaining to preventive health check-up under section 80D. He has given this information in Form No. 12BB but no evidence is submitted. Can we give section 80D deduction in such a case ?
Query 18 – An employee (who gets LTC from the company) wants LTC exemption under section 10(5) on the basis of a declaration without submitting any evidence pertaining to expenditure (he is not ready to give boarding passes and other details pertaining to his journey). He insists that employer cannot ask for evidence pertaining to LTC expenditure in view of Supreme Court’s ruling in the case of CIT v. Larsen & Toubro Ltd.  181 Taxman 71. What is the correct legal position ?
Query 19 – Our company wants to purchase a factory building. The seller wants full payment without TDS under section 194-IA (on the plea that section 194-IA is applicable only on purchase of residential property by an individual). What is the correct legal positon?
Query 20 – Out company wants to pay royalty to a Canadian company. The recipient company does not have PAN. What is the correct legal position on applicability of section 206AA in such cases ?
Query 21 – Out company pays office rent to the owner of property. But he wants to submit Form No. 15G for non-deduction of tax. Our plea is that Form No. 15G can be submitted only in the case of bank interest and not in the case of rent payment. Kindly confirm whether we are correct in not accepting Form No. 15G from the landlord.
Query 22 – We want to import a machinery from Germany. What is the position of TDS in such case ? Is it necessary for us to upload Form No. 15CA/CB ?
Query 23 – We have to deduct tax pertaining to a work contract under section 194C. The recipient insists that tax is not deductible. He is ready to submit Form No. 15G. Likewise, he is ready to bring nil TDS certificate from the Assessing Officer (but the certificate will be available only after 2-3 months). He wants the entire payment without TDS during the current month. Is it possible ?
Query 24 – We are reimbursing our share of cost (pertaining to a project report taken from a consultant) to a group company. The consultant is situated outside India but the group company is an Indian company. What is our TDS liability in the case of such reimbursement ?
Query 25 – Is there any time-limit for revising TDS quarterly return uploaded earlier ?
Query 26 – Some of the employees have income lesser than exemption limit. Is it necessary to given information pertaining to such employees in quarterly TDS return in Form No. 24Q ?
Query 27 – I am a work contractor. Tax is deducted by the payer of income under section 194C but TDS certificate is not given by the payer. Can I claim TDS credit in such case ? The payer has not deposited TDS in my case till today.
Query 28 – Our company pays rent of a building (amount of annual rent being Rs. 1,50,000). The company has also taken two generators on rent from the same person (rent being Rs. 1,20,000). Whether TDS is applicable under section 194-I ?
Query 29 – Our company has paid to a consultant a fee of Rs. 4.5 lakh without tax deduction under section 194J. This payment was made during May 2016.We are likely to make another payment to the tune of Rs. 2 lakh during December 2016. Can we deduct entire TDS from the payment to be made during December 2016 ?
Query 30 – Our company is going to purchase a building from a NRI. Payment will be made outside India. Whether tax is deductible under section 194-IA or under some other section ?
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