Are you selling on Limeroad? If yes, then here is some important update in context with the Lower deduction of TDS on Limeroad Commission Invoices for the financial year 2021-22 on the basis of LDC (Lower Deduction Certificate).
In the financial year, 2020-21 due to the COVID-19 situation deductors were given some relaxation on the base rates of TDS to be deducted till 31st March 2021. A reduction of 25% on TDS rates was given during FY 2020-21.
But the said relaxation was not extended by the department for the financial year 2021-22.
However, Limeroad sellers have to keep in mind that for the financial year 2021-22 they have to comply with TDS provisions in two parts:
|Period Cover||TDS Provisions|
|1st April 2021 to 31st May 2021||TDS rates as per IT Act.|
|1st June 2021 to 31st March 2022||TDS rates as per Lower Deduction Certificate (LDC)|
Note: LDC rates are subject to certain conditions as mentioned under the LDC (Lower Deduction Certificate).
Limeroad Sellers have to be cautious regarding Lower/ wrong deduction of TDS (Tax Deducted at Source), it might affect the TDS reimbursement procedure. Limeroad sellers would not be allowed TDS reimbursement for the amount deducted and paid in excess of rates specified under LDC (Lower Deduction Certificate).
Key Points in relation to Limeroad Lower Deduction Certificate
- Deductor has to deduct & Pay Lower TDS on the Limeroad commission invoices as per the relevant TDS section
- Deductor should mention the LDC number while filing their TDS Statement/TDS Return
- Non-compliance can make you assessee-in-default.
- TDS statement might get processed with error in the case where LDC number is NOT provided against the Limeroad entries.
What if the TDS return processed with error without mentioning the LDC number?
You might be charged with interest for a short deduction of TDS. How IT Department is going to know why you have deducted and paid lower TDS. Mentioning of LDC number is mandatory for the successful processing of the TDS Statement.
Limeroad sellers have to obtain the Lower Deduction Certificate (LDC) for the financial year 2021-22 from the TRACE website.
However, If the Limeroad Sellers are selling on any other e-commerce portals also, they should continue to deduct and pay the TDS on the rates applicable and prescribed under Income Tax Act for the relevant assessment year.
Limeroad Lower Deduction Certificate (LDC) is applicable from 1st June 2021 to 31st March 2022.
How to download Lower Deduction Certificate (LDC)