Latest Procedure for furnishing and Verification of Form 27BA.

F.Ro. DGIT(S)/CPC(TDS)/NOTIFICATION/2016-17

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income-tax(Systems)

New Delhi.

Notification No. 12/ 2016

New Delhi, 8th December, 2016

Subject: — Procedure for the purposes of furnishing and verification of Form 27BA for removing of default of Short Collection and/or Non Collection of Tax at Source – Reg.

1. As per first proviso to sub-section (6A) of section 206C of Income-tax Act, 1961, any person, other than a person referred to in sub-section (ID), responsible for collecting tax in accordance with the provisions of this section, who fails to collect the whole or any part of the tax on the amount received from a buyer or licensee or lessee or on the amount debited to the account of the buyer or licensee or lessee shall not be deemed to be an asses see in default in respect of such tax if such buyer or licensee or Iessee —

(i) has furnished his return of income under section 139;

(ii) has taken into account such amount for computing income in such return of income; and

(iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed.

2. As per sub-rule (1) of Rule 37J of Income-tax Rules, 1962, the certificate from an accountant under the first proviso to sub-section (6A) of section 206C shall be furnished in Form 27BA to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems) in accordance with the procedures, formats and standards specified under sub-rule (2), and verified in accordance with the procedures, formats and standards specified under sub rule (2).

3. In exercise of the powers delegated by ghe Central Board of Direct Taxes (Board) under sub-rule (2) of Rule 37J of Income Tax Rules, 1962 the Principal Director General of Income-Tax (Systems) hereby authorizes the Income Tax Authorities mentioned at Col. No. 1 to receive the form type mentioned in Col.No.2 to be filed in the mode specified at Col. No. 3 for the assessment years mentioned at Col. No. 4 and pertinent to defaults under Sections of the Act mentioned at Col. No. 5:

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Flag raised for 15G/H despite Income exceeding the amount of exemption.

CPC(TDS) feels glad to provide you with the new feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

Centralized Processing Cell (TDS) has observed from its records that Flag "B" (for 15G/H Forms) has been wrongly raised in the quarterly TDS Statements as per the provisions of section 197A(1B) of the Income Tax Act, 1961. Following are the provisions of section 197A(1B) for your ready reference:

"The provisions of this section shall not apply where the amount of any income of the nature referred to in sub-section (1) or sub-section (1A), as the case may be, or the aggregate of the amounts of such incomes credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to income-tax".

What is Form 15G/ H and its relevance :

Under section 197A of the Income Tax Act 1961, Form 15G / H is a self-declaration, which is provided by a person resident in India (not being a Company or Firm) to their deductor that the tax on his estimated total income of the previous year, in which such income is to be included in computing his total income, will be NIL.

The Declaration is made in the following Forms :

• Form 15H - For Senior Citizens
• Form 15G - For other than Senior Citizens

Consequences, if deductor wrongly raises Flag "B" for Forms 15G/H :

If the deductor raises Flag "B" for non-deduction of tax, despite the total payments made by him exceeding the taxable amount, this results into incorrect reporting in the TDS Statements.

Your attention is invited to provisions of section 201 of the Act, which reads as follows :

• Where any person who is required to deduct any sum, does not deduct or does not Pay or after deduction, fails to pay, the whole or any part of the tax, then such person shall be deemed to be an assessee in default in respect of such tax.

Under section 277 of the Act, if a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true is punishable.

This may be noted that obligation to report each transaction correctly in the TDS statements, falls on the deductor and non-compliance amounts to incorrect verification of correctness of TDS statement.

You can reach out to us on ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

CPC (TDS) is committed to provide best possible services to you.

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