Landmark Cases on TDS and Withholding
268 decisions, ranked by how many judgments on BharatTax rely on them.
Credit for Tax Deducted at Source (TDS) can be given to a person other than the deductee if certain conditions are met, including the filing of a declaration as prescribed by Rule 37BA(2).
No tax is deductible at source when payments are made merely towards reimbursement of expenses incurred on the assessee's behalf by another entity.
Section 195 of the Income Tax Act, 1961 does not require tax to be deducted at source on payments made to non-resident agents for services rendered entirely outside India, as such income is not taxable in India.
Late fees under section 234E can be levied for belated TDS returns filed, and processed, on or after June 1, 2015, in line with amendments to section 200A.
Payments for bandwidth connectivity charges are not fees for technical services requiring tax deduction at source under Section 195 of the Income Tax Act. Therefore, disallowance of such expenses under Section 40(a)(ia) is not justified.
Interest under section 201(1A) cannot be charged if the assessee has paid more tax than payable, resulting in a refund, even after considering tax deducted at source. If a payer fails to deduct tax but the recipient pays it when due, levying interest under section 201(1A) is improper.
Interest levied for delayed payment of TDS is compensatory in nature, not a penalty, and is therefore allowable as a deduction under Section 37 of the Income-tax Act.
Where a contract is for the sale of materials simpliciter, Section 194C is not attracted, and no deduction for tax is required. The Gujarat High Court upheld the Tribunal's decision, which relied on Circular 715/1995, dismissing the department's appeal.
Interest under Section 234B is not leviable when the entire income of the assessee was deductible at source under Section 195. Provisions for advance tax under Sections 234B and 234C are not applicable if tax is deductible at source under Section 195.
A power utility is not required to deduct TDS under section 194J when using its distribution network to sell energy to end consumers, as this does not involve human element.
Commission paid to foreign agents for services rendered outside India is not taxable in India, and therefore, tax deduction at source under Section 195 is not required.
There will be no Tax Deducted at Source (TDS) on transmission charges.
A payer cannot be held liable for the principal tax demand when tax has not been deducted at source. Only interest liability under section 201(1A) can be imposed in such cases.
The plea of 'bonafide' has no bearing on the determination of disallowance under Section 40(a)(i) of the Income Tax Act. An assessee uncertain about taxability should approach the Assessing Officer under Section 195(2) rather than pleading bonafide later.
Payments made through a running account in the ordinary course of business are not to be treated as advances or loans under section 2(22)(e) of the Income Tax Act, and therefore not deemed dividend.
Common Area Maintenance (CAM) charges paid by a tenant are considered rent and are subject to TDS under Section 194-I of the Income Tax Act, even if paid to a third party, as the term 'rent' is broadly interpreted to include payments for the use of property and associated services.
Penalty for failure to deduct or deposit tax will not be sustained if there is no malafide intention, negligence, or want of bona fide, but a misconceived belief about the applicability of a legal provision.
The Delhi High Court has held that services provided by payment gateways can be considered fees rather than commission, distinguishing them from brokerage paid for facilitating the buying or selling of goods.
