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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

Analysis

  • 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.

Form 16 : To be downloaded from NSDL Web Site ?

TDS certificate in Form 16 is to be issued to employees in respect of Financial Year 2011-12 before May 31, 2012

TDS certificate in Form 16 has two parts

  • Part A which contains details of tax deducted and deposited by the employer
  • Part B which contains details of income of the employee and tax thereon alongwith annexure containing tax deposit details

Form 16 on TIN Web Site

Part A  and Annexure  of Part B of Form 16 can be downloaded From TIN from F. Y. 2011-12 onwards.  However Part B of Form 16 will have to be issued by the employer

Is it mandatory to download Form16 from TIN Web Site

Income tax department has not issued any circular in this respect. Only Form 16A is to be compulsorily issued by downloading the same from TIN Web site

Hence it is optional for deductors to download Form 16 Part A from TIN Web site, but it will be a good practice as employees will clearly know the credit of TDS amount

Employee with income upto 5 Lacs ? No need to file IT Return for AY 2012-13

CBDT has issued Notification 9/2012 dated Feb 17,2012 which will come as a big relief for employees.

Exemption from filing IT Return

  • Exemption is available for employees having income from
  1. Salaries
  2. Interest from Saving Bank Account upto Rs. 10,000
  • Exemption is available if Total Income does not exceed Rs. 5 Lacs ( Total Income means Gross Total  Income Less Deductions under Chapter VI A)

Conditions

This exemption is not blanket and the following conditions must be fulfilled before this exemption is available

  • Employee must report his PAN to employer
  • Employee must report his income from interest on savings bank account to employer
  • Employee has received Form 16 from his employer
  • Total tax liability of employee has bee paid  off by employer by way of TDS and employer has deposited TDS with central government
  • Employee has no refund claim
  • Employee has received salary only from one  employer
  • Employee has not received any Notice from income tax department for filing of income-tax return

Analysis

  • Though welcome step, it might not benefit many employees.
  • Most of the employees have investment in Fixed Deposits, Debentures, Post Office Saving Schemes and they will earn some interest from these investments. Such employees are not exempt from filing IT Return.
  • Again ,several employees take home loan and submit details of interest on home loan to employers, who factor it while deducting TDS. Such employees are also not exempt from filing IT return as the interest paid on home loan has to be shown under  “Income from house property”
  • Any employee who has earned short term or long term capital gains will also not be exempt from filing IT return

Not issued Form 16A in time ? You may get a reminder from DIT

TDS certificate in Form 16A are to be issued for all deductions other than salary on quarterly basis.  The due date of issuing Form 16A is within 15 days of the due date of filing eTDS statement.

Income-tax department has also mandated corporates and banks to issue such certificates only after downloading Form 16A  files from TIN web site.

Tracking Downloads

It has been observed that income-tax department is tracking all downloads of form 16A . Those who have not made request for Form 16A are being sent reminder letters by the “Directorate of Income-tax Systems” . The reminder letter states…

It is noticed that you have not downloaded Form No 16A for Quarter ended Sep 2011 from the TIN Central System till 31/10/2011. Since, issue of TDS certificate in Form No 16A by downloading from TIN web site has been made mandatory from 1.4.2011 for corporate and banks , and only these are valid certificates, you are advised to download the same from the TIN web site ….”

Erroneous Reminders ?

Several deductors who are neither corporate nor banks have also received such reminders. This is possible if their status is not updated in TAN database  , or erroneous generation of letters by income-tax department.

What should be the response

If deduductor is a bank or corporate, it must immediately submit request for downloading Form 16A thru TAN login and after downloading issue the same to deductees.

For other deductors,  though it is not mandatory to download Form 16A from TIN web site,  nevertheless they have to issue Form 16A within due date. They can also download Form 16A from TIN web site at their option and issue the same to deductees.

Also if the status of TAN on TIN web site is not correct, TAN rectification form must be submitted.

How to download Form 16A from TIN Web Site

For the financial year 2011-12, it is mandatory for companies and banks to download Form 16A from TIN Website and issue only such downloaded TDS certificates to deductees. For others it is optional.

This facility has been activated in the NSDL web site

Step 1 : Login with your TAN

If you have not made online TAN registration, then it must be done immediately. You can login with TAN, login ID and password under Login->TAN Account menu

Step 2 : Request for Form 16A file

Click Form 16A file request menu. Prior to this keep eTDS statement for the desired quarter handy, as some verification questions will be asked for this request.

Select the Financial Year and Quarter for which Form 16A file is required

Two questions , one related to any one challan and another related to any 3 deductee details will have to be filled in.

You can make a request for either one PAN or all PANs

You may also download “PDF Converter” utility from the same menu.

Step 3 : Wait for file to arrive by email. This should arrive within 48 hours.

Prior to this keep the 12 digit online TAN registration number handy

The file attached to email will be a .zip file ,which will be password protected. And the password in this case is 12 digit TAN registration number.

After extracting the file you will get a .txt file

Step 4 : Covert txt file to PDF file

The java based utility can read the txt file and convert the same to Form 16A PDF format

Comments on Form 16A generated

Fast Facts tried out the whole process  for its own Q4 data and converted the txt file to PDF. Some observations

  • A unique TDS Certificate number is coming for each certificate
  • One certificate is getting generated for one PAN covering all TDS sections
  • CIT TDS name and address is automatically coming
  • Address of the Deductee is automatically coming based on the PAN database with the department
  • One additonal column Status which shows Booking status is also appearing against each line
Comments by Fast Facts
With this step, the mismatch between eTDS statement and Form 16A will be a thing of past.
The process of making request is quite simple, provided user keeps the challan and deductee details handy. In the absence of this info, the request will not be processed
The java based utility is quite simple and effective and could be useful for deductors having moderate volume of TDS certificates.
However deductors having large volume of TDS certificate and needing proper classification e.g. location wise etc will need a separate application for proper management of certificate distribution

Now TIN Website to provide Form 16A

CBDT has issued Circular 03/2011 on May 13, 2011 detailing new procedure of Issuance of TDS Certificates in Form No. 16A downloaded from TIN Website and option to authenticate the same by way of digital signature

FY 2010-11

FY 2011-12

Download Form 16A from TIN Web Site Optional Mandatory for Companies and Banks. Optional for others
Digitally Sign Form 16A Optional but only if downloaded from TIN Web site Optional but only if downloaded from TIN Web site
Manually Issue TDS Certificate All deductors can manually issue TDS Certificate Companies and Banks cannot manually issue TDS Certificate

TDS Certificates Form 16A for Financial Year 2011-12

  • For the following categories of deductors,  it is mandatory to download Form 16A from TIN Web Site and issue such downloaded certificates to deductees
    • Companies
    • Banks
    • Co-operative society engaged in banking business
  • For other deductors, it is optional to download Form 16A from TIN Web site
  • Such downloaded TDS certificate will have a unique TDS Certificate Number
  • This procedure is applicable for all deductions made on or after 01-04-2011

TDS Certificate Form 16A for Financial Year 2010-11

  • Any deductor has option to download Form 16A from TIN Web site.
  • It is not mandatory for any one

Digitally Signing Form 16A

  • A deductor has option to digitally sign Form 16A .
  • However this option is available only in respect of Form 16A downloaded from TIN Website.
  • TDS Certificates not downloaded from TIN web site will  have to be manually signed

Procedure and Format 

  • Director General of income-tax (Systems) shall specify the standards , procedure and format for issuing of TDS Certificates by way of downloading from TIN Web Site
Analysis by Fast Facts
The above circular is applicable for Form 16A only. Hence there is no change in the procedure for issuing Form 16 for tax deducted on salaries.
Banks and companies stand to gain a lot by digitally signing and emailing TDS certificates.
Above circular will ensure that  companies and banks  improve accuracy of eTDS statement by filing complete and correct details. Deductee will stand to benefit as they will get prompt credit for tax deduction.


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