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File Validation Utility (FVU) 4.2 and 2.138 – Applicable from 26th April 2014

It’s the start of Tax compliance Season  and as with the last 3 quarters, there is a new FVU. NSDL came out with the latest  utility on 25th April 2014 late evening

FVU Applicability

Date Applicable from FVU Version
From 26th April 2014 4.2 & 2.138
Till  25th April 2014 4.1 & 2.137

Through the new FVU  the following changes/validations have been brought in place:

NIL Returns

Applicable Forms – 24Q

  • A Deductor would now be able to file NIL returns for all years
  • Since FVU 4.0, there was a lot of confusion on the filing on NIL returns
  • It’s still not clear whether NIL returns need to submitted for other Forms

Unique Acknowledgement Number (UAN)

Applicable Forms – 27Q

  • UAN refers to the acknowledgement received on successful filing of Form 15CA
  • The new utility now allows a User to key in alphanumeric values from 12 to 15 characters

Validation in the absence of Deductee’s PAN

Applicable Forms – 24Q

  • It’s well understood that, in case a Deductee doesn’t have a PAN, TDS needs to be deducted at higher of 20% or applicable rate.
  • This point was not being checked till the previous FVU filings.
  • Henceforth, the new Utility would now be validating this feature (i.e – If a Deductee does not have a PAN, and if the TDS deducted amount is less than 20%, the FVU would show an error

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

No Notice for minor amounts of short deduction of TDS

This news is a great relief for thousands of tax deductors , who have been getting notice from ITO ( TDS) in respect of short deductions in TDS amounts.

The Board has decided that minor amounts of short deductions will be ignored.  These cases are :

  • A deductee having short deduction of less than Rs. 10 AND
  • Where total short deduction for the return is less than Rs. 100

The relevant instruction is reproduced below :

INSTRUCTION NO. 8/2010  DATED 8-12-2010

In the present system of processing of e-TDS returns, the returns are processed online and mismatch report showing defaults on various accounts is generated.

Based on this mismatch report, the assessing officers issue show-cause notices to the deductors and take follow up actions.

It has come to the notice of the Board that substantial number of TDS returns are pending where the deductee-wise default on account of short deduction of tax is less than Rs. 10.

This issue has been considered by the Board and it has been decided that:

(i)  where the default on account of short deduction is less than Rs.10 for each deductee, the demand is round off to zero; and

(ii)  after considering (i) above, deductor-wise demand/default, if any, of Rs.100 or less will also be ignored for further action.

However, the DDOs in such cases may be warned to be careful in future so as to ensure that they do not become habitual in short deduction of tax.

Earlier Instruction No. 11/2007, dated 18-12-2007 issued under F. No. 385/56/2007-IT(B) on the subject stands superseded by this instruction.

These instructions shall apply to all TCS/TDS cases under all Direct Tax Enactments. These instructions will come into force immediately.