Home » Posts tagged 'Form 16'

Tag Archives: Form 16

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

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.

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

Receipt Number in TDS Certificate

Format of Form 16/16A , TDS certificate in respect of salary and other than salary payments have been amended vide Notification No 41/2010 Dated 31-05-2010. The changes were explained in detail in our bulletin issue of July 2010.

Thereafter on TIN web site, a new requirement has been prescribed in respect of Receipt Number. The same is explained in the following paragraphs

Summary of tax deducted at source in respect of deductee

The above part of Form 16A asks user to submit the following information 

  • Quarter
  • Receipt Numbers of original quarterly statements of TDS under sub-section (3) of section 200
  • Amount of tax deducted in respect of the deductee
  • Amount of tax deposited/remitted in respect of the deductee

 Similar information is asked about all the four quarters in respect of employee in Form 16

Provisional Receipt No

Till now, after submitting eTDS statement , a Provisional Receipt Number was allotted by TIN system. This is a 15 character numeric number. Provisional receipt number will be referred as Token no for the statements pertaining to FY 2010-11 and onwards.

Receipt No

  • Receipt number to be quoted in Form 16/16A will be generated by TIN. 
  • Receipt number will be generated for the quarterly TDS/TCS statements pertaining to FY 2010-11 and onwards uploaded to TIN. 
  • Receipt number generated will be of eight digits (alphabets) and will be applicable only for statements pertaining to FY 2010-11 and onwards. 
  •  Eight digit receipt number can be obtained by viewing the status of the quarterly TDS/TCS statement at under Quarterly Statement Status feature available at TIN website 
  •  Receipt number provided by TIN is in addition to the provisional receipt number provided on acceptance/upload of quarterly TDS/TCS statement.