Effects of non issuing TDS Certificate or Tax Credits not reflected in 26AS while filing the Annual Income Tax Return.

The person deducting the tax at source is duty bound to-

• Deposit the tax deducted at source within prescribed time to the Government Treasury.
• File of Quareterly TDS Return in respect of the Tax Deducted.
• Issue the TDS Certificate tothe Deductee within a prescribed time.

For non compliance of each and every part mentioned above, there is a separate penalty and consequences under the income Tax Act-1961 as under-

• For non issurance of TDS Certificate within a prescribed time, penalty is imposable u/s. 272A (2) @ Rs. 100/- per day during which the failure continues, However, the amount of penlaty cannot exceed the amount of tax deductible/deducted.
• For non filing of TDS Return also, there is a penalty provision of Rs. 100/- per day.(The recent Finance Bill-2012 has proposed a fee of Rs. 200/- per day for late filing of TDS Return.  Besides, a penalty of Rs. 10,000/- to Rs. 1,00,000/- is proposed for non filing or inaccurate filing of TDS Return.  The ammended is proposed w.e.f. 01.07.2012)

Without Quartely TDS Return being filed by the Deductor you will not be entitled for the TAX Credit in respect of TDS Done from payment made to you.  Also, unless and untile the TDS Return is filed by the Deductor, deductee will not be able to view the TDS Credit in Form No. 26AS.

There is a general grievance that in many cases the Bank and other Tax Deductor are either not filing the quareterly TDS Return (or are not issuing the TDS Certificate) despite many requests and reminders by the Deductee.

In such cases, Deductee can follow the folling approach-
Write a letter the the Deductor incorporating

• The details of payments done and the tax deducted therefrom.
• Provision of Section 203 which required the Deductor for issue of tax certificate within one month from the date of Tax deduction.
• Keep the proof of letter issued to the Deductor.
• If dispite this, the certificate is not issued, write a letter to Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the Deductor mentioning the detailed facts elaborated above.

Tax payee must regularly track all the tax deducted and deposited in your account (i.e. Tax Credit in Form No. 26AS) by registering your PAN at www.incometaxindia.gov.in.  In the absence of availability of TDS in form No. 26AS it would be difficult for the Assessing Officer to grant the TDS Credit.

Posted in: 26 AS Statement,Duplicate TDS Certificate