F. No. 65-02/2023-LI
Govt. of India
Ministry of Communications
Department of Posts
Directorate of Postal Life Insurance
Chanakyapuri PO Complex,
New Delhi - 110 021.
Dated 19.07.2024
To
All Heads of Circle.
Subject: Deduction of TDS on payment of PLI/RPLI policies, as applicable, under section 194DA of IT Act'1961 and for its timely payment to IT authorities -reg.
Kindly refer to this Directorate letter dated 22.09.2023 on the above cited subject (copy enclosed), wherein it was requested to issue necessary instructions to all the DDOS for deduction of TDS on payment of PLI/RPLI policies, as applicable, under section 194DA of IT Act'1961 and for its timely payment to IT authorities.
It was also requested that deducted TDS amount on PLI/RPLI policies are to be credited under MH-0021-00-102-09-00-00 (GL. Code- 8002100150) on interim basis till the incorporation of the provision in McCamish. However, it is observed that many HOS in Circles are not following the guidelines issued by this Directorate resulting in issuance of observation/summons from Tax authorities.
In this regard, it is reiterated to instruct the DDOS to strictly follow the procedure for deduction of TDS as stipulated vide this Directorate's letter dated 22.09.2023 without fail.
Encl: As above.
Deepak Ashish Kaul) pory
General Manager (Finance)
F. No. 65-02/2023-LI
Govt. of India
Ministry of Communications
Department of Posts
Directorate of Postal Life Insurance
Chanakyapuri PO Complex,
New Delhi 110 021. Dated 22.09.2023
To
All Heads of Circle
Subject: - Clarification / guidelines regarding deduction of TDS on payment of PLI/RPLI policies, as applicable, under section 194DA of IT Act 1961. - reg.
Kindly refer to this Directorate letter dated 09.08.2023 wherein instructions were issued regarding deduction of TDS on PLI/RPLI payments, as applicable, under Section 194DA of IT Act' 1961.
In this regard certain circles have been seeking clarification/guidelines with regard to the applicability of TDS on PLI/RPLI payments and non- provision of TDS deduction in McCamish software.
Keeping this in view, following clarification/ guidelines are issued for smooth and timely payouts of PLI/RPLI policies to the insurants:
1) Implications with examples of TDS applicability on PLI/RPLI payment as per Section 194DA with exemption under clause 10(D) of section 10 of Income Tax Act' 1961 are given in Annexure.
2) Since there is no provision to deduct the applicable TDS in McCamish software at the time of processing of PLI/RPLI claims, below mentioned procedure may kindly be followed till the incorporation of the same in McCamish IT 1.0 or IT 2.0 project whichever is earlier:
a) Payment of PLI/RPLI policies where TDS is not deductible as explained in para 1 above, shall be processed as per existing rule/guidelines.
b) Payments of PLI/RPLI policies in which TDS is applicable, shall be processed for payment after deducting applicable TDS through Cheque or NEFT only. Status of such PLI/RPLI policies be changed as "PAID" in McCamish software to avoid duplicate payment.
c) TDS shall be deducted wherever applicable @5% in case insurant submits PAN. In case PAN is not submitted by insurant, TDS shall be deducted @20%.
d) TDS shall not be deducted if sum is paid on the death of insured person.
3) At present, deducted TDS amount on PLI/RPLI payments, are to be credited under MH 0021-00-102-09-00-00- Deduction from Insurance commission etc. under Sec 194-D & GL Code- 8002100150. On receipt of regular GL Code for TDS deduction, reversal entries are to be made which will be communicated in due course.
4) A register is to be maintained by the HOS for PLI/RPLI policies on which applicable TDS are deducted and a monthly consolidated report on TDS amount deducted on PLI/RPLI claims (GL balance) should be sent to respective GM (PA&F) by 10th of the following month for monitoring and reconciliation.
Encl: As above.
Copy for kind information to: All Heads of PAO
(Sachidanand Prasad)
General Manager (Finance)
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