Intt on TDS required- Y or N-what is the impact

[Sanjeev Nayak]

Pl inform me what is the exact procedure Y or n and what is the impact of it.There has been a difference in opinion at our centre among the faculty members.

Sanjeev Kumar Nayak

[swagatam dash]

In WEB menu the Intt. on TDS required should be "Y" otherwise system will calculate interest on the TDS part which has been already deducted and credit the same to TD account. So don't go by the word or meaning as many branches are doing this mistake by marking it "N".

With regards.

Swagatam Dash 

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From: Sanjeev Nayak <uco.s...@gmail.com>
To: uco_cbs...@googlegroups.com
Sent: Wednesday, 13 March 2013 2:56 PM
Subject: UCO_CBS_FACULTY Intt on TDS required- Y or N-what is the impact

Pl inform me what is the exact procedure Y or n and what is the impact of it.There has been a difference in opinion at our centre among the faculty members.

Sanjeev Kumar Nayak

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[K C RAULO RAULO]

Interest on TDS should be 'Y' otherwise the maturity value will change... that means it should be  maturity amount -TDS only and not to pay less interest because of TDS.

 

from raulo

[K C RAULO RAULO]

On Thu, Mar 14, 2013 at 10:45 AM, K C RAULO RAULO <kcrau...@gmail.com> wrote:

Interest on TDS should be 'Y' otherwise the maturity value will change... that means it should be  maturity amount -TDS only and not to pay less interest because of TDS.

 if you are putting 'N' then maturity value will be less than normal(maturity amount-tds-int on tds)

[Paramasivam Jegadish]

Swagatham was right. The value should be 'Y'. The original meaning of that field is 'recover interest on TDS already deducted'. If this field is 'Y' then it will pay less interest for the amount of TDS already deducted and paid to Govt. If the field is 'N' then it will pay interest for the TDS which is already deducted and will cause loss to the Bank.

This field value is more applicable to short term deposit which is opened in one quarter and closes in another quarter.

Example:

Deposit amount Rs.1 Crore

Date of opening :02/12/2012

Period : 91 days

Date of maturity : 03/03/2013

ROI : 9%

Interest payable will be : Rs.2,24,380

TDS applicable will be Rs.22,438

If Intt on TDS is made as 'Y' , see how the system calculates interest.

First Quarter

from 02/12/2012 to 31/12/2012,for 30 days system will calculate interest provision and deducts tax on that interest provision.

Provision will be approximately Rs.74000

Tds will be rs.7400

In this case interest is not actually paid to the customer, but TDS will be paid by the Bank to the govt.

So the system considers that the TDS is paid from the principle amount of Rs. 1 crore

Second Quarter

from 01/01/2013 to 02/03/2013 for remaining 61 days the syatem will calculate interest for Rs.99,92.600 (1 crore-7400).

Approximate interest will be Rs.1.50 lacs for this qtr and Rs.74000 for previous qtr=total Rs.224000

TDS  deducted will be Rs.15000+ 7400 already paid=Rs.22400

So the final result is, the interest paid to the depositor will be lesser than the original calculated amount. 

This is the Government's rule and we all should follow it and Bank's interest should also be protected.

So all faculties, please instruct all your participants to put "Y" in the said field.

Regards

Jegadish A P

[K C RAULO RAULO]

jagdish, we always says in class to put'y'always. but i think because of tds maturity value should not be changed. i mean p+I-tds only and not less int/maturity value because of tds

[Sanjeev Nayak]

Jegadish,

In my opinion the maturity value should be principal+intt-tds-intt on tds as told by you. But during the last two years there has been several complains of the customer.The customer says that the maturity value should be the maturity amount as stated in the receipt-tds if any.That's why this discussion has been raised.

Sanjeev Kumar Nayak

[swagatam dash]

Whatever may customer demand but we have to obey the TDS rule i.e. we have to deduct Tax from the source (when means qtly intt.>Rs.10,000/-) whenever it is generated before crediting to the customer ac.

 

On doing so we are getting a Total balance value which is less then the value what it should be if TDS is not there. In another way we may take (Principal + Intt. - TDS) of 1st Qtr" as the Principal for 2nd quarter on which the intt. will be calculated for 2nd qtr and TDS will be deducted from the intt. and so on.

 

In each quarter invariably we have to deposit the generated TDS amount as CBDT with Income Tax Dept.. So, we are parting with a portion of Deposit in each quarter, then how can we pay interest to the customer for that parted portion for rest of the quarters. So I think the calculation done by the finacle system is correct and have a strong logic.

 

Swagatam Dash  

Sanjeev Kumar Nayak

 

from raulo

From: Sanjeev Nayak <uco.s...@gmail.com>
To: uco_cbs...@googlegroups.com
Sent: Wednesday, 13 March 2013 2:56 PM
Subject: UCO_CBS_FACULTY Intt on TDS required- Y or N-what is the impact

Pl inform me what is the exact procedure Y or n and what is the impact of it.There has been a difference in opinion at our centre among the faculty members.

Sanjeev Kumar Nayak

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[SANJEEV KUMAR NAYAK]

Yes Swagatam

Why should we pay interest for the tax amount which has already been deducted and deposited into govt.account.

 

Sanjeev Kumar Nayak

[Paramasivam Jegadish]

Right said mr.swagatham. all faculties, please understand the logic of TDS. System does perfectly.