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File Validation Utility (FVU) 4.1 and 2.137 – Applicable from 04th January 2014

NSDL came out with a new FVU late evening yesterday 02nd January 2014

FVU Applicability

Date Applicable from FVU Version
From 04th Jan 2014 4.1 & 2.137
Till  03rd Jan 2014 4.1 & 2.137 and 4.0 & 2.136

Points introduced in the new version are:

Deletion of Deductee Record

Applicable Forms – 24Q, 26Q, 27Q, 27EQ

  • Deletion of Deductee’s records (in Correction Return) is no longer permitted.
  • Till the prior FVU versions Deductee records could be deleted, while filing the Correction Return.
  • Henceforth a Deductor would be required to modify the particular Deductee  details in the Correction return and enter zero against the following fields:
    • Amount of payment
    • Amount of Deduction
    • Amount of Deposit
    • Rate of Deduction
    • Date of Deduction should be blank

Form 27A

  • Form 27A is used for providing summarized information with the Statement of Tax deduction/Tax Collection at source.
  • Now on, the Form 27A would be auto generated on creation of the .fvu file
  • The new Form27A also contains a barcode (refer file attached)


Date of Tax Deduction and/or Tax Collection

Applicable Forms – 24Q, 26Q, 27Q, 27EQ

  • Going ahead transactions, on which tax is deducted prior to the filing period, cannot be included in the TDS return.
  • Ex – In the Dec 2013 quarter, a Deductor cannot include a TDS deduction entry prior to 01st October 2013
  • Earlier there were no restrictions and one could declare transaction related to previous quarter in the subsequent filing quarters
  • Now on, a Deductor is required to file a Correction return, if they have any (such) transaction relating to previous filing periods.

Challan/Transfer Voucher validation

Applicable Forms – 24Q, 26Q, 27Q, 27EQ

  • Challan amount should be more than or equal to total of Tax deducted, interest payments, late filing fees and other amounts.
  • i.e – No challan can be submitted with a short payment
  • Ex -  Assume a scenario as below:
TDS Amount 10,000
Interest  5,000
Other Amount  4,000
Fees  1,000
TOTAL 20,000
  •  In this case, the Challan amount has to be more than/equal to Rs. 20,000

* Points expressed here are the Author’s interpretation. This cannot substitute Expert advice

File Validation Utility (FVU) 4.0 and 2.136 – Applicable from 01st October 2013

NSDL came out with FVU version 4.0 and 2.136  on 25th September 2013.

FVU Applicability

Date Applicable from FVU Version
From 01st Oct 2013 4.0 & 2.136
Till 30th Sept 2013 4.0 & 2.136 and3.9 & 2.135



Points added/introduced in the new version are:

Nil Challan/ transfer vouchers

Applicable Forms – 24Q, 26Q,27Q, 27EQ

  • In case of Nil Challan/ transfer vouchers, it’s now mandatory to update reasons for such non deduction
  • Along with entering all the other transaction details one now needs to, also, update either of the following flags “A/B/S/T/Y/Z” in the ‘Reason for Non deduction/Lower deduction’ field
  • It needs to be seen how one treats a situation where there are no transactions in a quarter.

Section 194LD

Applicable Forms –27Q

  • As per Section 194LD, introduced in the Finance Bill 2013, TDS @ 5% needs to be deducted on interest payments for Rupee denominated bonds issued by the Government of India or any other Indian company.
  • TDS would be applicable on all such interest payments made from 01st June 2013 till 31st May 2015
  • These payments are made to Qualified Foreign Investors (QFI) and/or Foreign Institutional Investors (FII)

Section 194LC

Applicable Forms –27Q

  • Section 194LC covers following payments made to non residents
    • Interest (other than interest on securities) and
    • Other payments except for salary
  • Now onwards only an Indian Company or it’s Branch, may deduct TDS under this section
  • Earlier this Section was open to use by all Deductors. Ex – Company, AOP, BOI etc
  • It’s still not clear on how Deductors (apart from Company or Branch) deal with payments under this Section

Section 194LC (Correction Statement)

Applicable Forms –27Q

  • Pursuant to the change in this FVU, Correction Statement may be filed, only, if there are any changes in the existing Challan or Deductee or in case a new challan has been paid.
  • Under the ‘Correction Type’ field, Deductor may only use
    • C2 – Correction in Deductor and/or Challan details
    • C3 – Change in Deductor, challan, and/or Deductee details
    • C9 – Additional Challan payments
  • This change is applicable from 2012-2013 onwards

Provisional Receipt Number (PRN)

Applicable Forms –24Q,26Q,27Q,27EQ

  • It is now mandatory to mention the PRN for all Regular statements
  • PRN from the last filed Regular Statement (for the same Form) needs to be quoted
  • Ex – In case a Deductor is filing Form 24Q for quarter ending June 2013, he has to mention the PRN from previous period, would henceforth be required to mention their PRN

Date of Challan Deposit

Applicable Forms –24Q, 26Q, 27Q, 27EQ

  • Surplus challan payments, from the immediate previous financial year (FY), may now be adjusted against current year dues. Eg – While filing returns for FY 2013-2014, one can use the surplus from the previous FY 2012-2013
  • Surplus arising from any year prior to the previous FY cannot be entered
  • A Deductor would now be allowed to enter details of surplus payments made in the previous FY
  • Excess payments from previous FY occurring on account of Book entry adjustments, would not be allowed

Section 194-IA : TDS on sale of immovable property : Compliance procedure

The Finance Bill 2013 has introduced a new section 194-IA providing for TDS @ 1% to be deducted by purchaser. In case valid PAN of seller is not available , tax deduction will be at higher rate of 20%.

This is applicable w.e.f  June 01, 2013  for sale of immovable property ( other than agricultural land ) where consideration is Rs. 50 Lacs and above. The purchaser is exempt from the obligation to obtain TAN, which is otherwise mandatory for all deductors.

CBDT has issued Notification No. 39/2013 on 31st May 2013 amending rules to simplify procedure for complying with provisions of this new section.


Deposit of tax

Any tax deducted under section 194-IA will be

  • Deposited within 7 days from the end of month in which tax was deducted
  • Deposited by way of Challan-cums-statement in Form 26QB
  • Deposited electronically into RBI/SBI or any authorized bank. Director General of income-tax (Systems) will specify formats , standards and procedure for such electronic remittance

TDS Certificate

  • TDS Certificate in respect deduction under section 194-IA will be issued by deductor in Form No 16B
  • Form 16B has to be issued within 15 days from the due date of depositing tax
  • Form 16B will have to be downloaded from income tax web portal

Mandatory Electronic Payment

  • NSDL site has already provided a new link “TDS on sale of Property” under ePayment of Taxes to electronically deposit such TDS
  • It is mandatory to provide PAN of both transferor and transferee
  • Complete address of transferor and transferee is to be given
  • About property , complete address,  value consideration ,date of agreement  and whether payment made in lump sum or installment is also to be provided in the online form

Electronic Payment by deductors not having net-banking facility

  • Since Section 194-IA transactions will be one off and deductor may not have net-banking facility, an alternate has been provided.
  • The deductor has to fill the information online and then opt for e-tax payment on subsequent date option.
  • On completing the form, an acknowledgement will be generated.
  • The deductor can then visit a bank branch for payment, provide the acknowledgment number.
  • Bank will use TIN web site to retrieve payment information based on the acknowledgement number and then proceed to make electronic payment

What if there is an error in providing PAN details

  • Deductor must be very careful in filling up PAN details.
  • In case wrong PAN is entered, there is no facility of correcting the same online. The only option available is to approach the Assessing Officer or TDS-CPC

Finance Bill 2013 Amendments : TDS Provisions

Finance Bill 2013 was passed by Lok Sabha on 30-04-2013. The following amendments ( in respect of TDS/TCS Provisions ) were carried out to the original Finance Bill presented on Feb 28,2013

TDS @ 1% on transfer of immovable property- Sec. 194-IA

  • The Finance Bill has introduced a new section 194-IA providing for TDS @ 1% to be deducted by transferee. This is applicable for sale of immovable property ( other than agricultural land ) where consideration is Rs. 50 Lacs and above.
  • The amendment now exempts transferee from the obligation to obtain TAN, which is otherwise mandatory for all deductors
  • With this change, we should also now expect procedural changes related to
    • Payment of TDS without TAN
    • Issuance of TDS certificate and filing of eTDS statement in the absence of TAN

 TDS @ 5% on interest on rupee denominated bonds – Section 194LD

  • The amendment has introduced a new section : 194LD
  • This new section is applicable on interest payable on rupee denominated bonds issued by Govt. or an  Indian company
  • Such interest is payable between 01-06-2013 to 31-05-2015
  • Such interest is payable to FII or Qualified Foreign Investor
  • The rate of TDS will be 5%
  • For such transactions, provisions of Section 195/196D will not be applicable

No penal rate of TDS for transactions covered under section 194LC

  • Section 194LC covers the following payments made to a non resident person or a foreign provided such payment are taxable in India for the payee.
    • Interest except Interest on securities.
    • Other sum except salaries.
  • The amendment in Section 206AA provides that even if deductee does not have a PAN, tax under section 194LC will be deducted at prescribed rate of 5% and penal rate of 20% will not be applicable

Gold coins covered under Tax Collection at Source

  • Effective July 2012 TCS is applicable , if sale consideration of bullion exceeds Rs. 2 lac and part or full consideration is paid in cash. However sale of gold coins weighing 1o grams or less were not considered for the purpose this limit of 2 Lacs
  • The amendment now makes  even sale of gold coins or other articles weighing 10 grams or less will be subject of provisions of tax collection at source, effective June 1, 2013

Form 16 Part A to be downloaded from TRACES portal

Income-tax department has issued Circular No 04/2013 dated April 17, 2013 in respect of Form 16.

New Form 16

  • Revised Form 16 has been notified vide Notification 11/2013 dated 19.02.2013
  • Form 16 has two distinct parts
    • Part A : contains details of tax deduction and deposit
    • Part B : contains details of salary and total income
  • Form 16 has to be issued on or before May 31, 2013 in respect of Financial Year 2012-13

Procedure for Issuance

  • Form 16A , TDS in respect of other than salaries is to be issued quarterly only by downloading the same from TRACES web site. ( Circular 01/2012)
  • There was no such requirement in respect of Form 16
  • Now vide Circular 04/2013, a deductor is required to issue
    • Part A of Form 16 by downloading the same from TRACES web site
    • Part B of Form 16 is to be issued by deductor manually
  • Form 16 generated from TRACES will contain unique TDS Certificate Number
  • Form 16 by Govt. deductors, who make TDS payment by book entry , is also to be issued by generating and downloading from TRACES

Authentication of Form 16

  • Form 16 must be signed manually or using digital signature


  • Issuing Form 16 will be a challenge for deductors for FY 2012-13, as this involves two distinct parts being issued from two different sources
  • Part A will have to be generated and downloaded from TRACES. Part B will have to be prepared manually or using a third party software.
  • The deductee should not feel that two different parts are being given
  • Software vendors will have to provide utility to merge two Parts created in PDF formats  to make it easier for deductors to issue Form 16

Notification 11/2013 : Amendment in TDS Rules

CBDT has issued Notification No 11/2013 dated 19-2-2013 , which  is being explained and analysed in this blog.

Furnishing of TDS Statement under digital signature

  • Amendment in Rule 31A provides  for submission of TDS return electronically under digital signature. It also states furnishing of statement alongwith verification of statement in Form 27A  OR Verification through electronic process.
  • Currently a very large percentage of TDS statements are filed by visiting TIN facilitation centres and carrying TDS statement in a CD/Pen drive alongwith a signed Form 27A.
  • NSDL , has also provided for submission of return online under digital signature , but this requires prior registration.
  • We have to wait for new guidelines for online submission under digital signature or verification through electronic process.

Form 26A for Certificate from accountant under section 201

  • Under certain conditions, a deductor shall not be deemed to be assessee in default for non deduction of tax at source. One of the conditions is that such deductor will have to produce a certificate from accountant .
  • Form 26A has been prescribed for this purpose.
  • Director General of Income-tax (System) will specify the procedure , format and standards for furnishing of Form 26A
  • We have to wait for new guidelines for submission and verification of Form 26A

New Form 26B for Claim for refund

  • If any excess TDS is deposited, the claim for refund now can be filed by the deductor in newly inserted Form 26B.
  • This form will have to be submitted electronically under digital signatures.
  • Director General of Income-tax (System) will specify the procedure , format and standards for furnishing of Form 26B

Submission of certain details of amounts paid without deduction of tax at source

  • Notification 56/2012 dated 31-12-2012 had provided for no deduction of tax at source for certain payments made to banks.
  • The amended Rule provides for submission of details of such payments in TDS Statement.
  • We have to wait for changes in data structure to be notified by NSDL.

Change in Forms

Changes have been notified in

  • TDS/TCS Certificate :  Forms 16,16A,27D
  • TDS Statements : Forms 24Q,26Q,27Q and 27EQ
  • Declarations for payments without TDS/TCS : Form 15G, 15H, 27C 

We have to wait for changes in data structure to be notified by NSDL to give effect to this change. Detailed analysis of these changes will be discussed in a separate blog.

TRACES : new TDS web interface from Income-tax Dept.

TRACES stands for TDS Reconciliation Analysis and Correction Enabling System and has been set up by TDS Centralised Processing Cell of the income-tax department.

TRACES will integrate the following components

  • Tax information Network
  • Automated TDS Challan Matching
  • TDS Defaults Processing
  • IVR/ Call Centre
  • Web Portal

New Web Portal :  https://www.tdscpc.gov.in

The new portal has been created using latest technology to enhance swift interaction between the deductor, deductee, income-tax department and CPC. The following features are/ will be  available to deductors and deductees

  • Dashboard giving summary of Deductors account
  • Online registration of TAN
  • Online filing of TDS Statements
  • Online corrections of TDS  statements
  • Default Resolution
  • View Form 26AS
  • Download Form 16/16A/Consolidated TDS File
  • Grievance registration and resolution

Not all of the above features have been activated so far

NSDL web site V/s TRACES web Site : Current Status

Currently several online services are provided to deductors and deductees on TIN  site by NSDL.  The following table presents various services at both the sites


Registration at TRACES

  • Users who have already registered at NSDL TIN site, need not register again on TRACES. Their registration details are migrated and they can login at TRACES with their NSDL-TIN login details
  • Fresh registrations on NSDL site have been stopped
  • New registrations can be done at TRACES site and online help is available under the FAQ link

It appears; gradually TRACES will become the only site for deductors and deductees. As more features appear and existing features understood, we will keep sharing the information with you

FVU 3.6 : Key Changes Effective October 2012

File Validation Utility version 3.6 has been released  on Sept 25, 2012.

Effective Date

  • FVU version 3.6 will be mandatory w.e.f October 16, 2012.
  • Upto October 15, 2012 FVU version 3.5 and FVU version 3.6 will be applicable.
  • This means for Q2 of FY 2012-13, both FVU 3.5 and FVU 3.6 will be accepted, if filed on or before October 15, 2012.

Challan File is now mandatory during validation

  • Upto FVU version 3.5 , challan file ( with extension .csi ) was optional.  With version 3.6 , this file will be mandatory while validating eTDS file
  • The challan file can be downloaded from TIN web site under the link Challan Status Enquiry
  • This file will be required only if TDS is deposited through challans. Hence, Govt. deductors who do not use challan for depositing TDS will not be required to provide challan file during validation
  • Challan file is required for validating regular statements. For correction statements , it is required only when a new challan is added or existing challan is updated

Changes in Form 24Q : TDS on Salaries

  • For Q4 Salary details are to be provided in Form 24Q.
  • The exemption limit for senior citizens above age 80 is different from senior citizens above 60 years and upto 80 years.
  • A separate flag is now to be given for such senior citizens , appropriately termed as “Super Senior Citizens”
Description Senior Citizen Super Senior Citizen
Age Above 60 but upto 79 years 80 years and above
NIL Rate for income upto Rs. 2,50,000 Rs. 5,00,000
Category of Employee in Form 24Q S O
  • This categorization is applicable from FY 2011-12 onwards. However, since the eTDS Statements for Q4 2011-12 have already been filed upto May 31, 2012, this requirements may be applicable for those filing delayed statement or filing correction statement

Changes in Form 26Q : TDS on other Payments

  • TDS not deducted on software purchases in terms of Notification 21/2012 is now to be reported separately.
  • Above notification exempts a deductor from making deduction of tax at source, if software ( without any modifications ) is acquired in a subsequent transfer and tax has been deducted on previous transfer of software. For more details please read   http://blog.ffcs.in/2012/08/14/tds-on-purchase-of-standard-software/
  • For this purpose flag “S” is to be mentioned in the field “Reason for NIL/ Lower deduction” for transactions pertaining to section 194J
  • This requirement is applicable from FY 2012-13 onwards only

Changes in Form 27Q : Payment to Non – Residents

  • TDS not deducted on software purchases in terms of Notification 21/2012 is now to be reported separately.
  • Above notification exempts a deductor from making deduction of tax at source, if software ( without any modifications ) is acquired in a subsequent transfer and tax has been deducted on previous transfer of software. For more details please read   http://blog.ffcs.in/2012/08/14/tds-on-purchase-of-standard-software/
  • For this purpose flag “S” is to be mentioned in the field “Reason for NIL/ Lower deduction” for transactions pertaining to section 195
  • This requirement is applicable from FY 2012-13 onwards only
  • Two additional codes are introduced for the following sections

Section code

Section code to be quoted in Quarterly Statement

Applicable from FY





Interest : infrastructure debt fund




Interest : foreign currency loans etc

Changes in Form 27EQ : Tax Collection at Source

  • The following additional codes are prescribed

Section code

Section code to be quoted in Quarterly Statement

Applicable from FY









Bullion and Jewellery

TDS On Purchase of Standard Software

Finance Act 2012 has amended the definition of “royalty”. The amendment in section section 9 (1) (vi) now defines ‘royalty’ as any ‘right for use’ or ‘right to use’, a computer software (including granting of a license), irrespective of the medium through which such right is transferred.

Section 194J provides for deduction of tax at source on payment of professional fees, technical fees, directors remuneration and royalty payments

Hence payments towards right to use computer software will be liable to tax deduction at source under section 194J @ 10%

Notification 21/2012 Dated July 1, 2012

sale of computer software involves a channel i.e. from developer to distributor  to dealer to end-user. To avoid tax deduction at several levels, CBDT issued the Notification 21/2012

As per the said notification, the tax deduction at source (‘TDS’) will not apply on acquisition of software from another person, being a resident,

  • if the software is acquired in a subsequent transfer and
  • the transferor has transferred the software without modification and
  • TDS has been deducted under section 194J or 195 of the Income tax Act, 1961 (‘the Act’) on payment of previous transfer of software

Deduction by end-user

Based on above description, the following check-list will be helpful in deciding about deductibility of tax on software purchase

Payments towards Standard Software

Deduct Tax


Payment below  Rs. 30,000


Section 194J provides for no deduction in case payment is below Rs. 30,000

Payment to a non-resident Indian


Tax is deductible in all cases and no exemption under Notification 21/2012 is available

Payment above Rs. 30,000 to resident where no declaration under Notification 21/2012 is given by the transferor


Declaration is mandatory under Notification 21/2012

Payment above Rs. 30,000 to resident where declaration under Notification 21/2012 is given by the transferor


Declaration is mandatory under Notification 21/2012

Declaration under Notification 21/2012

The declaration under above Notification can be given by the transferor only if

  • The software in question is being transferred without any modification
  •  Tax has been deducted under section 194J or 195 by transferor or by a previous transferor


Can Declaration be given


Developer is directly selling to End-user


No tax deduction at any stage

Dealer is paying to Developer but making no deduction of tax being exempt ( Individual not covered under mandatory tax audit)


No tax deduction at any stage

Dealer is paying to Developer but making no deduction as amount is below Rs.30,000


No tax deduction at any stage

Dealer buys from distributor who has deducted tax while making payment to developer , but Dealer does not have PAN


Valid PAN is required

Sample Declaration

“Declaration in terms of CBDT Notification (Income Tax) No. 21/2012 dated 13.6.2012:  ‘The transaction represented in this Invoice  is a resale of Software without any modification, and tax has been deducted previously under Sec. 194J. Our PAN number is ….”

eTDS filing 2012-13 Q1 : FVU 3.5 and new penal provisions

eTDS  statement for 2012-13 first quarter is to be filed on or before July 15,2012. Few important changes and points to remember are given below

Mandatory Fees and Penal provisions

File eTDS Statement in time or pay late filing fees ( Section 234E)

From 1st July 2012, failure to submit eTDS statement in time will result in fees

  • A mandatory fees of Rs. 200 per day is applicable for any delay in furnishing of eTDS statement.
  •  Total fees will be limited to the amount of TDS deducted
  • Such fees must be paid before filing of eTDS statement and shown appropriately therein.

Penalty for late filing or incorrect filing ( Section 271H)

Effective July 1, 2012

  • A delay beyond one year will result in penalty ranging from Rs. 10,000 to 1 lac.
  • Failure to file eTDS statement or filing incorrect details like PAN, challan details, TDS amount will also result in penalty being levied ranging from Rs. 10,000 to 1 lac

From the above, it is clear that this time when you fie eTDS statement, you need to file in time and also ensure that you are not filing incorrect details in the statement

FVU Version 3.5

  • Effective July 1, 2012 , eTDS file must be validated with file validation utility version 3.5 for current filing
  • For statements pertaining to FY upto 2009-10, there no change in the fvu and and same version <> will continue
  • There is only one change brought about by fvu 3.5 and it is in respect of BIN – Book Identification Number.

Book Identification Number – BIN

BIN consists of the following:

  • Receipt Number: Seven digit unique number generated for each Form 24G statement successfully accepted at the TIN central system.
  • DDO Serial Number: Five digit unique number generated for each DDO record with valid TAN present in the Form 24G statement successfully accepted at the TIN central system.
  • Date: The last date of the month and year for which TDS/TCS is reported in Form 24G. Date will be in DD/MM/YYYY format.

AO has to communicate the BIN details to the respective DDO.BIN is to be quoted by the Drawing and Disbursing Officer (DDO) in transfer voucher details in their quarterly TDS/TCS statements.

FVU 3.5 will verify  structural validation for BIN quoted by the Govt. deductors (where TDS/TCS is deposited by book entry). BIN should be the same that has been provided by TIN on upload of Form 24G by respective PAO/DTO


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