Posts Tagged ‘Tax Deducted at Source’
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 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
Summary of provisions related to TDS/TCS
- No tax deduction on interest on securities upto Rs. 5000
- Payment to independent directors covered under section 194J and tax to be deducted @ 10%
- Threshold limit increased from Rs. 1 Lac to 2 Lac for compensation towards compulsory acquisition of immovable property
- New provision for deducting tax at source @ 1% on sale of immovable property
- Senior citizens of age 60 or above can now file Form 15H and claim non deduction of tax at source
- For non deduction, no default if deductee provides proof of taxes paid
- Intimation issued after processing of TDS return will be deemed to be Notice of Demand
- Penalty for non filing or incorrect filing of TDS statements
- Time limit for passing order for failure to deduct tax increased from 4 years to 6 years
- Tax collection at source on sale of jewellery in cash in excess of Rs. 2 Lac
Section wise details
Section 193 : Interest on securities : Effective July 1 , 2012
- Existing provisions provide for threshold limit of Rs. 2500 in respect of interest payable to resident individuals on listed debentures of a listed company and for unlisted debentures there is no threshold
- Amended provision now prescribes a limit of Rs. 5000 in respect of interest payable to resident individuals or HUF for listed or unlisted debentures issued by a public company. For this purpose the payment of interest must be made by an account payee cheque
Section 194J : TDS on fees for professional or technical services : Effective July 1 , 2012
- The amendment has included payments made to independent directors ( whether by way of fees or professional services or whatever name ) @ 10% of gross payments.
- If the remuneration to director is already subject to TDS under section 192 ( salaries ), then the above provision will not apply
Section 194LA : TDS on compensation on acquisition of immovable property : Effective July 1 , 2012
- Existing provision prescribe a threshold limit of 1 Lac
- The amendment seeks to increase threshold limit to 2 Lac
194LAA : TDs on payment on transfer of immovable property : Effective Oct 1, 2012
- This new proposed section covers consideration for transfer of immovable property , other than agricultural land
- The deduction has to be made at the time of credit or payment , whichever is earlier
- TDS is required @ 1% of consideration
- Threshold limit for deduction is 50 Lacs for property situated in specified urban areas and 20 lacs in other areas
- Consideration will be actual amount OR value assessed by stamp authorities
- The property document will not be registered unless proof of TDS deposit is attached
- This TDS deduction will not be subject to other provisions like quoting TAN, submitting eTDS statement , issuing Form 16A. A separate one page form will be prescribed which needs to be submitted to registration authorities
Section 197A : Non Deduction in certain cases
- Form 15H for claiming of certain amount without deduction of tax at source can be now submitted by a person 60 or above years of age.
Sec. 201 – Consequences of Failure to Deduct or Pay
Increase in time limit :Effective April 1, 2010
- If a person required to deduct tax at source, does not deduct or after deducting does not deposit the amount, is deemed to be an assessee in default.
- For this purpose an order is to be passed by the Assessing Officer under section 201
- This time limit currently is 4 years from the end of financial year in which payment is made or credit given. The amendment now seeks to increase this period to 6 years and is effective April 1, 2010
Not assessee in default : Effective July 1, 2012
- A person will not be deemed to be assesse in default for failing to deduct tax at source if deductee
- has furnished income tax return
- has considered such sum ( on which tax was not deducted at source ) in computing total income
- has paid tax due on income shown in the return
- furnishes a certificate to this effect from an accountant
- The deductor however will be liable to pay interest from the date such amount was deductible to the date of furnishing of return by deductee
206C Collection of tax at source : Effective July 1, 2012
- A new sub section (1D) is proposed. A seller who receives any amount in cash as consideration of sale of jewellery or bullion , will be required to collect tax at source @ 1 % of sale consideration. The threshold for this provision is Rs. 2 Lac
- Sale of minerals like coal, lignite or iron ore will also be subject to tax collection at source @ 1%
Sec 271H – Penalty for Default in Furnishing Statements
- A new section 271H provides for penalty from Rs. 10,000 to Rs. 1 Lac where
- Deductor fails to file eTDS statements in time
- Furnishes incorrect information in eTDS statements
Sec 234 – Fee for Default in Furnishing Statements
Failure to file eTDS statements in time will now entail a penalty of Rs. 200 per day ( instead of Rs. 100 per day )
- No penalty will be levied for delay if TDS statements are filed within 1 year of prescribed due date after payment of tax and interest on delayed deposit
Intimation after processing of TDS Statements :Effective July 1, 2012
- · Intimation generated after processing of TDS statement will be treated a Notice of Demand u/s 156 ,Rectifiable order u/s 154 and Appealable order u/s 24A
Provisions pertaining to Non Resident Indians
Section 194E : TDS on payment to non-resident sportsmen or Sports Association : Effective July 1 , 2012
- Existing provisions provide for TDS @ 10% of gross receipts of non-resident sportsmen or sports association
- Amended provisions not provide for TDS @ 20% of gross receipt of non-resident sportsmen , sports association OR entertainer
Sec. 194-LC – TDS on Interest from Specified Indian Companies : Effective July 1, 2012
- This new section prescribes TDS @ 5% in respect of interest paid by specified companies to non-residents in respect of foreign currency loans
- The borrowing must be made between July 1, 2012 to July 1, 2015 and approved by Central Govt
- The specified companies are those which are engaged in: Construction of dam ,Operation of aircraft , Manufacture or production of fertilizers ,Construction of Port including inland port ,Construction of road, tall road or bridges.Generation, distribution or transmission of power ,Construction of ships in shipyard ,Developing and building affordable housing projects referred to in Section 35AD (8)(c)(vii).
Sec. 195 – TDS on Payments to Non-Residents
- The tds on interest payment covered under this section will not include interest covered under section 194LB and 194LC
- The obligation to deduct tax under this section will apply to residents or non-residents. Even if a non-resident does not have a place of business or any other presence in India. This explanation is retrospective with effect fron 1st April 1962
- The Board can issue Notification to specify a class of persons or cases where person responsible for making payment to a non-resident can make application to Assessing Office to determine sum chargeable to tax. This amendment will be effective July 1, 2012
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.
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.
What is a TAN Registration Number( TRN)
- TIN web site provides for registration of TAN by deductor , which is necessary , among other things, for downloading consolidated fvu file, Form 16A text file.
- When a deductor applies for TAN Registration online , a confirmatory email is sent giving 12 digit TAN Registration Number. Example :
“The TAN has been successfully registered on 31th October, 2009. Your registration number is T20098776DAC”
Where is TAN Registration Number needed
- TRN is required to be quoted in all correspondence with NSDL
- The following files are emailed by NSDL / available for download are password protected and the password is TRN
- Reset password
- Form 16A
Hence if TRN is lost, it is not possible to access downloaded Form 16A files
What is the procedure to retrieve TRN
- A written request on the letter head has to be sent to NSDL mentioning name of Deductor, TAN and requesting for retrieving TRN
- The letter should be signed by ‘Managing Director’ or ‘Chief Financial Officer’ or authorized signatory in the organization along with name and designation and should be preferably digitally signed
- If the letter is not digitally signed then one the following support documents will have to be provided
- Board resolution certifying the authorized person list, which includes the name of the authorized person.
- If name of the person is not present in the board resolution then supporting documents from ROC website mentioning name of the authorized person, Power of attorney or any other legal document authorizing the person to sign documents on behalf of the entity
- An undertaking on the letter head owning responsibility in case of misuse of login. Format of the undertaking is given at the end of this post
- Latest copy of Provisional Receipt Number
After receipt of above documents, the TRN will be emailed to the deductor.