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Tax Deduction at Source

 
    TDS Rates     Laws    |   Taxation of Partnership Firms  
 

Most of the payments attract TDS provisions. With the introduction of a provision to disallow the expenses in toto for failure to deduct tax at source, one has to be very careful of the compliance on this front. The proposed applicable TDS Rates are summarised below:

Nature of Payment Threshold Limit for Deduction If you are paying toà Individual/HUF (Pymt < 10 lakhs) Individual (Pymt > 10 lakhs) Firms(Payment <1Cr) Firms(Payment >1Cr) Companies(Payment <1Cr) Companies(Payment> 1Cr
Interest on Securities. 2500 per annum Tax 10.00 10.00 10.00 10.00 20.00 20.00
Surcharge 0.00 1.00 0.00 1.00 0.00 2.00
Cess 0.30 0.33 0.30 0.33 0.60 0.66
Total 10.30 11.33 10.30 11.33 20.60 22.66
Interest other than interest on securities 5,000 per annum Tax 10.00 10.00 10.00 10.00 20.00 20.00
Surcharge 0.00 1.00 0.00 1.00 0.00 2.00
Cess 0.30 0.33 0.30 0.33 0.60 0.66
Total 10.30 11.33 10.30 11.33 20.60 22.66
Main Contracts 20,000 per contract Tax 2.00 2.00 2.00 2.00 2.00 2.00
50,000 per annum Surcharge 0.00 0.20 0.00 0.20 0.00 0.20
  Cess 0.06 0.066 0.06 0.066 0.06 0.066
  Total 2.06 2.266 2.06 2.266 2.06 2.266
Sub-Contracts/ Advertisement If main contract covered Tax 1.00 1.00 1.00 1.00 1.00 1.00
Surcharge 0.00 0.10 0.00 0.10 0.00 0.10
Cess 0.03 0.033 0.03 0.033 0.03 0.033
Total 1.03 1.133 1.03 1.133 1.03 1.133
Brokerage or Commission 2,500 per annum Tax 10.00 10.00 10.00 10.00 10.00 10.00
Surcharge 0.00 1.00 0.00 1.00 0.00 1.00
Cess 0.30 0.33 0.30 0.33 0.30 0.33
Total 10.30 11.33 10.30 11.33 10.30 11.33
Fees for Professional Services 20,000 per annum Tax 10.00 10.00 10.00 10.00 10.00 10.00
Surcharge 0.00 1.00 0.00 1.00 0.00 1.00
Cess 0.30 0.33 0.30 0.33 0.30 0.33
Total 10.30 11.33 10.30 11.33 10.30 11.33
Rent            
Immovable  Property 1,20,000 per annum Tax 15.00 15.00 20.00 20.00 20.00 20.00
Surcharge 0.00 1.50 0.00 2.00 0.00 2.00
Cess 0.45 0.495 0.60 0.66 0.60 0.66
Total 15.45 16.995 20.60 22.66 20.60 22.66
Plant,Machinery& Equipment 1,20,000 per annum Tax 10.00 10.00 10.00 10.00 10.00 10.00
Surcharge 0.00 1.00 0.00 1.00 0.00 1.00
Cess 0.30 0.33 0.30 0.33 0.30 0.33
Total 10.30 11.33 10.30 11.33 10.30 11.33
 
 
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Period of Preservation of Accounts & Limitation Periods under various laws

Laws Period
Domestic or Foreign Companies (Companies Act) 8 years
Non Profit Making Companies (Companies Act) 4 years
Income Tax Act 8 years
Transfer Pricing and other docs 10 years
Central Excise Act 5 years
Service tax 5 years
MVAT Act 5 years
 
 
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  Taxation of Partnership Firms

Partnership Firms are treated as separate assessable entities. The profits are allocated in terms of remuneration, interest on capital and share of profit. While the partners pay the tax on remuneration and interest, the tax on remaining profits is paid by the firm. There are limits for remuneration and interest. Maximum permissible deduction in respect of remuneration to working partners is as follows

Business Firms Professional Firms Maximum Remuneration
< 0 < 0 Rs. 50,000
0 – 75,000 0 – 1,00,000 90% or Rs. 50,000/- (higher)
75,001-1,50,000 1,00,001-1,50,000 60%
1,50,001++ 1,50,000++ 40%
 
 
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