Recent trends and issues surrounding domestic TDS & TCS

In a session dedicated to navigating the complexities of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) in India, Nexdigm experts offered insights into recent trends, amendments, and challenges. The discussion aimed to provide clarity on the latest regulatory changes and their practical implications for businesses.

The presentation began by addressing the interplay between sections 194Q and 206C(1H), specifically the challenges in determining which provision takes precedence in various transaction scenarios. It also covered the definition of "goods" in this context and its relevance to TDS applicability.

A significant portion of the session was dedicated to recent amendments in TDS/TCS provisions, including changes related to the Liberalized Remittance Scheme (LRS), tax on Virtual Digital Assets, and payments to partners of firms. The experts also discussed other procedural amendments aimed at increasing liquidity for salaried employees, aligning interest rates for late TCS payments with TDS rates, and extending the scope of applications for lower deduction/collection certificates.

The presentation further elaborated on the implications of non-compliance with TDS/TCS provisions, such as interest, penalties, and prosecution risks. In addition, the session covered recent judicial decisions related to TDS/TCS, providing valuable perspectives on how courts have interpreted and applied these regulations.

Concluding the session, the experts provided key takeaways and practical guidance for deductees, emphasizing the importance of reconciling Form 26AS, accurately reporting income, and understanding the consequences of non-deduction.