FAQ

So exactly what is GST in India? The journey of GST began in 2000 when a committee was set up to draft the law. It took 17 years after that for the law to evolve into what it is today. In 2017, the GST bill was passed in the Lok Sabha and the Rajya Sabha. On 1st July 2017, the GST law was implemented.

India is a federal country, so the central government and the state government both have the power to levy taxes. Under the GST bill, both central and state government has the power to levy GST. Therefore, GST in India is divided into two parts:

1. 1. Central GST (CGST)
2. 2. State GST (SGDT)

CGST is levied by the Central government and SGST is levied by the State government. Another type of GST is Integrated GST ( IGST). IGST is levied on inter-state transactions. It can be confusing in case of transactions between two people from different states and this, IGST will be levied only by the Central government. The central government distributes the state’s portion of GST from the IGST to the relevant state.

Introduction of GST would be a very significant step in the field of indirect tax reforms in India. Previously, many taxes were levied on the same product that increased the price of the product. Due to GST, these taxes have been eliminated. GST has mainly removed the tax on tax or the cascading effect on goods and services. This decreases the cost of goods. GST is also mainly driven by technology. All the registrations, return filings and application for refunds needs to be done online on the GST portal making these processes faster.

Introduction of GST had made our products competitive in the domestic and international markets. Under the previous setup, the classification of products into different categories caused confusion and was a big issue. GST solves this problem by using an eight-digit code to identify products according to international standards.

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Small taxpayers with a total turnover in a financial year up to ₹50 Lakhs are eligible for composition levy. Under this scheme, a taxpayer pays tax as a percentage of his turnover during the year without the benefits of ITC. Under a normal scenario, a taxpayer under GST has to file a minimum of 3 returns monthly and one annual return. For small suppliers, it is difficult to maintain such a detailed book of accounts on a daily basis. Therefore, only quarterly returns have to be filed for small taxpayers.

However, the minimum rate of tax for CGST and SGST cant be less than 1%. In this scheme, the taxpayer is not allowed to collect any tax from his customers. This is an optional scheme available to small business owners.

How to register for GST?

The GST registration process can be done online throughout the country. Therefore if you want to do GST registration in Pune, GST registration in Mumbai or GST registration in any city all over India, you can access the online registration link – https://www.gst.gov.in/

Now that you know what is GST in India, learn more about its applicability and eligibility. Under the GST bill, tax is payable by a person on the supply of goods and services. Responsibility to pay these taxes comes up when a taxable person crosses the threshold of exemption of GST, i.e, ₹10 lakh. The CGST and SGST need to paid by the person on all supply of goods and services within the state. IGST is payable on all interstate transactions.

Individuals who have registered under the Pre GST law, that is, VAT, service tax and excise are eligible for GST. The agents of the suppliers of goods and input distributors can register for GST. Furthermore, people who supply goods online, and takes part in e-commerce are required to be registered under GST.

Is your business GST ready? Every business must comply with GST. GST rules apply to invoices, receipts, delivery challans and other transactions. It is important to register under GST for small business owners. While the GST registration process is all done online, understanding the GST registration documents can seem daunting but if you check off each document, you can register your business with ease.

Now that you know what is GST in India, learn more about its applicability and eligibility. Under the GST bill, tax is payable by a person on the supply of goods and services. Responsibility to pay these taxes comes up when a taxable person crosses the threshold of exemption of GST, i.e, ₹10 lakh. The CGST and SGST need to paid by the person on all supply of goods and services within the state. IGST is payable on all interstate transactions.

Individuals who have registered under the Pre GST law, that is, VAT, service tax and excise are eligible for GST. The agents of the suppliers of goods and input distributors can register for GST. Furthermore, people who supply goods online, and takes part in e-commerce are required to be registered under GST.

Is your business GST ready? Every business must comply with GST. GST rules apply to invoices, receipts, delivery challans and other transactions. It is important to register under GST for small business owners. While the GST registration process is all done online, understanding the GST registration documents can seem daunting but if you check off each document, you can register your business with ease.

Any person making specified payments mentioned under the Income Tax Act is required to deduct TDS at the time of making such specified payment. But no TDS has to be deducted if the person making the payment is an individual or HUF whose books are not required to be audited.

However, in case of rent payments made by individuals and HUF exceeding Rs 50,000 per month, are required to deduct TDS @ 5% even if the individual or HUF is not liable for a tax audit. Also, such Individuals and HUF liable to deduct TDS @ 5% need not apply for TAN. Your employer deducts TDS at the income tax slab rates applicable. Banks deduct TDS @10%. Or they may deduct @ 20% if they do not have your PAN information.

For most payments rates of TDS are set in the income tax act and TDS is deducted by the payer basis of these specified rates. If you submit investment proofs (for claiming deductions) to your employer and your total taxable income is below the taxable limit. - you do not have to pay any tax. And therefore no TDS should be deducted from your income.

Similarly, you can submit Form 15G and Form 15H to the bank if your total income is below the taxable limit so that they don’t deduct TDS on your interest income. In case you have not been able to submit proofs to your employer or if your employer or bank has already deducted TDS and your total income is below the taxable limit) – you can file a return and claim a refund of this TDS. The complete list of Specified Payments eligible for TDS deduction along with the rate of TDS.

The Tax Deducted at Source must be deposited to the government by the 7th of the subsequent month.

Tax Deducted at Source has to be deposited using Challan ITNS-281 on the government portal. Read our article for a step by step guide for depositing TDS payment online.

Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS. TDS return is to be submitted quarterly and various details need to be furnished like TAN, amount of TDS deducted, type of payment, PAN of deductee, etc. Also, different forms are prescribed for filing returns depending upon the purpose of the deduction of TDS. Various types of return forms are as follows: Form 26QTDS on all payments except salaries Q1 - 31st July Q2 - 31st October Q3 - 31st January Q4 - 31st May

Form 16, Form 16A, Form 16 B and Form 16 C are all TDS certificates. TDS certificates have to be issued by a person deducting TDS to the assessee from whose income TDS was deducted while making payment. For instance, banks issue Form 16A to the depositor when TDS is deducted on interest from fixed deposits. Form 16 is issued by the employer to the employee.

It is important to understand how TDS is linked to your PAN. TDS deductions are linked to PAN numbers for both the deductor and deductee. If TDS has been deducted from any of your income you must go through the Tax Credit Form 26AS. This form is a consolidated tax statement that is available to all PAN holders.

Since all TDS is linked to your PAN, this form lists out the details of TDS deducted on your income by each deductor for all kinds of payments made to you – whether those are salaries or interest income – all TDS linked to your PAN is reported here. This form also has income tax directly paid by you – as advance tax or self-assessment tax. Therefore, it becomes important for you to mention your PAN correctly, wherever TDS may be applicable to your income.

You can easily file your TDS returns through ClearTax software i.e. ClearTDS. It is an online TDS software that requires no download or desktop installation or software update. It helps you to prepare regular & correct e-TDS statements online easily with just a few clicks on your computer. It is also compatible with TDS returns of previous financial years for easy import. Also, you can generate your TDS certificates using ClearTDS.

The income tax department has been sending SMS to the taxpayers from VK-ITDEFL that mentions the amount of tax deducted at source (TDS) against the PAN (Permanent Account Number) of the taxpayer. The SMS alert will let you know the TDS credited in respect of your income from salary, interest etc., every quarter. The amount of TDS would stand accumulated in your Form 26AS for the respective financial year.

This initiative was implemented by the Finance Ministry to increase transparency and reduce the cases of TDS mismatches at the time of income tax filing. Taxpayers can cross-check the information provided in the SMS with the information on the payslips to make sure that there is no mismatch. TDS mismatch could be a common reason for incorrect income tax return filing.

On salary, TDS is deducted based on the income tax slab applicable to you. In the case of other income types, the TDS rates are fixed and vary between 10% and 20%. The tax rates are not based on your total income. Hence, you would suffer a TDS on your receipts in certain cases. Separately, you would be required to calculate your annual income by aggregating income from all sources.

Your actual tax liability would be calculated on the total taxable income. From the taxes calculated, you can claim credit for TDS deducted on your various receipts. Reduce the tax deducted at source from your actual tax liability to know the balance to be paid to the income tax department. You may have a refund too. In both cases, you have to file an income tax return and pay the tax due or claim a refund.

As per Section 206AA of the Income Tax Act, if you do not furnish your Permanent Account Number to the deductor, then the deductor shall deduct TDS at the higher of the rate prescribed in the relevant provisions of the Act or at 20%.

PAN is a Permanent Account Number and TAN stands for Tax Deduction Account Number.

TAN should be obtained by the person responsible to deduct TDS, i.e., the deductor. The deductor is required to quote TAN in all the documents relating to TDS.

However, there is an exception- in the case of TDS on the purchase of land and building under Section 194-IA, the deductor is not required to obtain TAN and can use PAN for remitting the TDS.

Also, in the case of TDS on rent as per Section 194-IB, and TDS on payment of certain sums by Individuals or HUFs as per Section 194M, the deductor can use PAN instead of TAN for remitting TDS.

The Finance Bill, 2021 introduced these provisions for deduction and collection of income tax at source at such higher rates if any sum is paid or payable to a specified person who did not file the IT return. Section 206AB is on TDS and inserted after section 206AA of the IT Act. It allows deduction of TDS at higher rates on those buyers who do not submit the Permanent Account Number (PAN). Likewise, Section 206CCA is on TCS and was inserted after section 206CC of the IT Act, with the same explanation as above. To know more, read our article on “Sections 206AB and 206CCA”.

There are several types of TDS defined by the law. To know more, read our article with a summarised table on various TDS types “TDS Rate Chart”.

Every employer must deduct TDS on salary at what is known as the ‘average rate of income tax’ of the employee for the year. It is denoted as Average Income tax rate = Income tax liability (arrived at based on slab rates) divided by the employee’s predictable income for the assessment year.

You can use the facility if -

1. a. You have a bank account with Net-banking/Debit card of the selected Bank, and
2. b. Your bank provides the e- payment facility.

It is mandatory for the following types of assesses to pay tax online with effect from April 1,2008.

1. a. All the corporate assesses.
2. b. All assesses (other than company) to who the provisions of section 44AB of the Income Tax Act, 1961 are applicable.

In case your bank does not have an online payment facility or is not an authorized bank then you can make electronic payment of tax from the account of any other person who has an account with the authorized bank having online facility. However, the challan for making such payment must clearly indicate your Permanent Account Number (PAN).

You will have to check the net-banking webpage of your bank’s website for this information.

Your Bank provides facility for re-generation of electronic challan counterfoil kindly check the Bank website; if not then you should contact your bank and request them for duplicate challan counterfoil.

You can verify the status of the challan in the “Challan Status Inquiry” at NSDL e-Gov-TIN website after 5 to 7 days of making e-payment. In case of non availability of the challan status kindly contact your bank.

If encountered any error on e-tax website kindly contact TIN call centre at 020 - 27218080 or write to us at tininfo@nsdl.co.in (Please indicate the subject of the mail as Online Payment of Direct Tax ).

Kindly contact TIN call centre at 020 - 27218080 or write to us at (Please indicate the subject of the mail as " Online Payment of Direct Tax – Bank Name is not present ").

If during the transaction, or after completing the transaction bank site encountered any error or get disconnected before generating Taxpayer counterfoil, then instead of doing the same transaction again, kindly check your account. If account has been debited, then contact your bank for the taxpayer’s counterfoil. Please note that, in the above case, do not make the same transaction again which results in account being debited more than once for the same e-tax transaction.

Fees under section 234F will be levied on a person who is required to furnish return of income under Section 139 and does not furnish the same within the time prescribed under the Income Tax Act, 1961.

A person desirous to make payment of fees under Section 234F of Income Tax Act, 1961, need to provide the same in the field 'OTHERS' under Challan No/ITNS 280.

According to rules in respect of tax deducted at source, buyer of the property would have to deduct the TDS and deposit the same in Government treasury.

Buyer or Purchaser of the property is not required to procure Tax Deduction Account Number (TAN). The Buyer is required quote his or her PAN and sellers PAN.

PAN of the seller is mandatory. The same may be acquired from the Seller before effecting the transaction.

The Buyer of the property (deductor of tax) has to furnish information regarding the transaction online on the TIN website i.e. www.tin-nsdl.com. After successfully providing details of transaction deductor can:

1. . Either make the payment online (through e-tax payment option) immediately;
2. . Or make the payment subsequently through e-tax payment option (net-banking account) or by visiting any of the authorized Bank branches. However, such bank branches will make e-payment without digitization of any challan. The bank will get the challan details from the online form filled on TIN website (www.tin-nsdl.com)

If any problem is encountered at the Protean website while entering details in the online form, then contact the TIN Call Center at 020 - 27218080 or write to us at (Please indicate the subject of the mail as Online Payment of Direct Tax_ TDS on sale of property).

The online form available on the TIN website for furnishing information regarding TDS on property is termed as Form 26QB.

1. a) Acknowledgment number for the Form 26QB furnished is available in the Form 26AS (Annual Tax Statement) of the Deductor (i.e. Purchaser/ Buyer of property). The same can be viewed from the TRACES website (www.tdscpc.gov.in) or
2. b) Taxpayer can also click the option ‘View Acknowledgment’ hosted on the TIN website. Taxpayer needs to enter PAN of the Buyer and Seller, Total Payment and Assessment Year (as mentioned at the time of filing the Form 26QB) to retrieve the Acknowledgment Number.

Form 16B is the TDS certificate to be issued by the deductor (Buyer of property) to the deductee (Seller of property) in respect of the taxes deducted and deposited into the Government Account.

Form 16B will be available for download from the website of Centralized Processing Cell of TDS (CPC-TDS) www.tdscpc.gov.in

For example, If amount of property sold is ` 70 Lakhs, would TDS be calculated at ` 20 Lakhs or on `70 Lakhs?

TDS is to be deducted on the amount paid/credited to the seller. In the above e.g. the deduction will be on total amount i.e. on ` 70 Lakhs.

Buyer may approach any of the authorized Bank Branch to facilitate in making e-payment.

e-payment of taxes at subsequent date will be linked to the FORM 26QB based on Acknowledgement number generated at the time of filing of Form 26QB.

Online statement cum challan Form/ Form 26QB is to be filled in by each buyer for unique buyer-seller combination for respective share. E.g. in case of one buyer and two sellers, two forms have to be filled in and for two buyers and two seller, four forms have to be filled in for respective property shares.

As per section 234E of the IT Act, 1961 read with Rule 31A (4A) of IT rules, 1962, failure on the part of taxpayer to furnish challan-cum-statement in Form No. 26QB electronically within seven days from the end of the month in which the tax deduction is made will attract levy of fee to be paid by the buyer/transferee/payer.

Provision to enter Tax amount (comprising of basic tax, interest and fee) in Form 26QB is given in TIN website and Bank's site.

The TDS amount as per Form 26QB should be entered in the field 'Basic Tax' (Income Tax) on the Bank's web-portal as TDS certificate (Form 16B) will be based on 'Basic Tax' (Income Tax) only.

To avail this facility the taxpayer is required to have a net-banking account with any of the Authorized Banks. List of Authorized Banks is available at the TIN website in the link.

TIN system will direct you to net-banking facility of your bank. You will have to log on to the net banking site of your bank using your login ID and password/PIN provided by the bank. The particulars entered by you at TIN website will be displayed again.

You will now be required to enter the amount of tax you intend to pay and also select your bank account number from where you intend to pay the tax. After verifying the correctness, you can proceed with confirming the payment.

Your bank will process the transaction online by debiting the bank account indicated by you and generate a printable acknowledgment indicating the Challan Identification Number (CIN). You can verify the status of the challan in the “Challan Status Inquiry” at Protean-TIN website using CIN after a week, after making payment.

You will have to check the net-banking webpage of your bank’s website for this information.

Your Bank provides facility for re-generation of electronic challan counterfoil kindly check the Bank website, if not then you should contact your bank request them for duplicate challan counterfoil.

If any problem encountered while entering the financial details at the net-banking webpage of your bank, then you should contact your bank for assistance.

You may access the access the link ‘View/Payment of TDS on property” on the TIN website. On entering the details as per the acknowledgment slip, you will be provided options to either Print the Acknowledgment Slip. In case you desire to make an online payment, on the same screen option for Submit to the bank is provided wherein you have to select the Bank for payment. You will be taken to the netbanking login screen wherein you can make the payment online.