If tax is deducted under a wrong provision of the Income-tax Act, the payment is to be disallowed under Section 40(a)(ia) of the said Act

Recently, the Kerala High Court (High Court) in the case of P V S Memorial Hospital Ltd1 (the taxpayer) held that if the tax is deductible under Section 194J2 of the Income-tax Act, 1961 (the Act) but is deducted under Section 194C3 of the Act, the disallowance under Section 40(a)(ia) of the Act is still applicable. The High Court observed that the expression ‘tax deductible at source under Chapter XVII-B’ occurring in Section 40(a)(ia) of the Act has to be understood as tax deductible at source under the appropriate provision of Chapter XVII-B of the Act. Further, the latter part of this Section that such tax has not been deducted again refers to the tax deducted under the appropriate provision of Chapter XVII-B of the Act.

Facts of the case

• The taxpayer, a hospital, had entered into an agreement with Lakeshore Hospital and Research Centre Limited (Lakeshore). In terms of the agreement, Lakeshore had undertaken to perform various professional services in the taxpayer’s hospital.
• During Assessment Years (AYs) 2005-06 and 2006-07, the taxpayer made payment to Lakeshore. The taxpayer deducted tax at the rate of 2 per cent under Section 194C of the Act. However, assessment was completed on the basis that the tax is deductible at 5 per cent under Section 194J of the Act and therefore, the entire tax was disallowed under Section 40(a)(ia) of the Act.
• The Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer (AO). The Income-tax Appellate Tribunal (the Tribunal) has also confirmed the order of the lower authorities for AY 2005-06.
• However, for AY 2006-07, the Tribunal followed the decision of the Calcutta High Court in the case of S. K. Tekriwal4 and held that the conditions laid down under Section 40(a)(ia) of the Act for making an addition is that tax is deductible at source and such tax has not been deducted. If both the conditions are satisfied, then such payment can be disallowed under Section 40(a)(ia) of the Act. It was also held that where tax is deducted by the taxpayer, even if it is under a wrong provision of the law, as in this case, the provisions of Section 40(a)(ia) of the Act cannot be invoked.

High Court’s ruling

• As per the provisions of the agreement, Lakeshore had undertaken to render professional services to the taxpayer and it was not a case where they were undertaking contract work. If that be so, the tax was deductible under Section 194J of the Act and not under Section 194C as done by the taxpayer.
• A disallowance under Section 40(a)(ia) of the Act is attracted in cases where fees for professional or technical services is ‘payable on which tax is deductible at source and such tax has not been deducted or after deduction has not been paid.
• Provision of Section 40(a)(ia) of the Act is not a charging section but is a machinery section and such a provision should be understood in such a manner that the provision is workable. It has been so held by the Supreme Court in the case of Gurusahai Saigal5.
• If Section 40(a)(ia) of the Act is understood in the manner as laid down by the Supreme Court, it can be observed that the expression ‘tax deductible at source under Chapter XVII-B’ occurring in the Section has to be understood as tax deductible at source under the appropriate provision of Chapter XVII-B of the Act.
• Therefore, in the present case, if tax is deductible under Section 194J of the Act but is deducted under Section 194C of the Act, such a deduction would not satisfy the requirements of Section 40(a)(ia) of the Act. The latter part of this Section that such tax has not been deducted again refers to the tax deducted under the appropriate provision of Chapter XVII-B of the Act. Thus, a cumulative reading of Section 40(a)(ia) of the Act, indicates that deduction under a wrong provision of law will not save the taxpayer from Section 40(a)(ia) of the Act.
• The decision of the Calcutta High Court in the case of S.K.Tekriwal relied on by the Tribunal is incorrect. A view cannot be accepted that if the tax is deducted even under a wrong provision of law, Section 40(a)(ia) cannot be invoked.

Source: www.tdsman.com

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Verification of e-TDS/TCS Return - FAQs

After I prepare my e-TDS/TCS return, is there any way I can check/verify whether it conforms to the prescribed data structure (file format)?
Ans : Yes, after you have prepared your e-TDS/TCS return you can check/verify the same by using the File Validation Utility (FVU). This utility is freely downloadable from the NSDL-TIN website.

What is File Validation Utility (FVU)?
Ans :  FVU is a program developed by NSDL, which is used to ascertain whether the e-TDS/TCS return file contains any format level error(s). When you pass e-TDS/TCS return through FVU, it generates an 'error/response file'. If there are no errors in the e-TDS/TCS return file, error/response file will display the control totals. If there are errors, the error/response file will display the error location and error code along with the error code description. In case you find any error, you can rectify the error and pass the e-TDS/TCS return file again through the FVU till you get an error-free file.

What is the 'Upload File' in the new File Validation Utility?
Ans :  'Upload File' that is generated by the FVU when the return is validated using the FVU has to be filed with TIN-FC. This 'upload file' is a file with the same filename as the 'input file' but with extension .fvu. Example 'input file' name is 27EQGov.txt, the upload file generated will be 27EQGov.fvu.

What are the platforms for execution of FVU?
Ans :  For Quarterly Returns, Java has to be installed to run FVU. Details are given in FVU section of NSDL-TIN website.

What are the Control Totals appearing in the Error/Response File generated by validating the text file through File Validation Utility (FVU) of NSDL?
Ans :  The Control Totals in Error/Response File are generated only when a valid file is generated. Otherwise, the Error/Response File shows the nature of error. The control totals are as under:

• Number of deductee/party records : In case of Form 24Q, it is equal to the number of employees for which TDS return is being prepared. In case of Form 26Q/27Q, it is equal to the total number of records of tax deduction. 10 payments to 1 party would mean 10 deductee records.
• Amount Paid : This is the Total Amount of all payments made on which tax was deducted. In case of Form 24Q, it is equal to the Total Taxable Income of all the employees. In case of Form 26Q/27Q, this is equal to the total of all the amounts on which tax has been deducted at source.
• Tax Deducted : This is the Total Amount of tax actually deducted at source for all payments.
• Tax Deposited : This is the total of all the deposit challans. This is normally the same as Tax Deducted but at times may be different due to interest or other amount.

Are the control totals appearing in Form 27A same as that of Error/Response File?
Ans :  Yes, the control totals in Form 27A and in Error/Response File are same.

What if any of the control totals mentioned in Form No. 27A do not match with that in e-TDS/TCS return?
Ans :  In such a case the e-TDS/TCS return will not be accepted by the TIN-FC. You should ensure that the control totals generated by FVU and that mentioned on Form No. 27A match. In case of any difficulties/queries, you should contact the TIN-FC or TIN Call Centre at NSDL.

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Helpful Tips for filing/e-filing of Income Tax Return to Taxpayee.

Income-tax return is a legal document and it should be filed by the assessee with due care and caution. There should be no corrections or overwriting and it should be properly signed and verified by the person authorized to do so under the provisions of the Income-tax Act. The following important points may be taken care of while filling up the return forms:

Assessment year to which New Forms are applicable:
The new ITRs notified are applicable for the assessment years 2008-09 onwards only, for return of income relating to earlier assessment years return is to be furnished in the appropriate form as applicable in that assessment year. Each assessee has to identify the correct ITR Form applicable in its case before filing the return of Income.

No enclosures to the return:
Rule 12(2) of the I.T Rules provides that the return of income and return of fringe benefits required to be furnished in Form No. ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, or ITR-8 shall not be accompanied by a statement showing the computation of tax payable on the basis of return, or proof of tax, if any, claimed deducted or collected at source or the advance tax or tax on self assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income or return of fringe benefits under any provisions of the Act.

For timely delivery of refunds, ensure correct address and account number on your Return of Income:
From 1.10.07 onwards, all income tax refunds in Bangalore, Chennai, Delhi, Kolkata and Mumbai will be delivered by the Refund Banker directly at the communication address mentioned on the Return of Income. Taxpayers are requested to fill in the correct address (available during working hours for delivery) to ensure speedy delivery of refunds. In the case of taxpayers who opt for refunds through ECS, it will be credited directly to the bank account for which correct MICR code/ Bank Account Number has to be furnished on the Return.

Manner of filing the new Forms :
These Forms can be submitted in the following manner:

1. a paper form;
2. e-filing
3. a bar-coded paper return.
   

Returns can be e-filed through the internet. E-filing of return is mandatory for companies and firms requiring statutory audit u/s 44AB. E-filing can be done with or without digital signaturea):

• If the returns are filed using digital signature, then no further action is required from the tax payers.
• If the returns are filed without using digital signature, then the tax payers have to file ITR-V with the department within 15 days of e-filing.
• The tax payers can e-file the returns through an e-intermediary who would e-file and assist him in filing of ITR-V within 15 days.
  

Where the form is furnished by using bar coded paper return then the tax payers need to print two copies of Form ITR-V. Both copies should be verified and submitted. The receiving official shall return one copy after affixing the stamp and seal.

Filling out acknowledgement:
Where the return is furnished in paper format, acknowledgement slip attached with the return should be duly filled in. The new forms are not required to be filed in duplicate.

Intimation of processing under section 143(1):
The acknowledgement of the return is deemed to be the intimation of processing under section 143(1). No separate intimation will be sent to the taxpayer unless there is a demand or refund.

Furnishing details of high value transactions:
In the return the details of high value transactions need to be compulsorily stated, which are ordinarily reported through the annual information return (AIR) and these details are cross checked and matched with the data in the AIR.

Filing your return through Tax Return Preparers (TRPs):
If you are an individual or an HUF assessee and you are not required to get your accounts audited (called ‘eligible person’) under the provisions of the Income Tax Act, then you can use the services of a Tax Return Preparer (TRP). However, if the ‘eligible person’ is not a resident in India during the previous year relevant to such assessment year, he can not avail of the services of a TRP.

If you are filing your returns through a TRP then you should ensure that:

1. You are eligible to file return of Income under this Scheme;
2. You give your consent to any Tax Return Preparer to prepare your return of income for any assessment year;
3. You verify that the facts mentioned in the return are true and correct before you sign the return;
4. You certify the amount which has been paid by you under this Scheme to the Tax Return Preparer for preparing and furnishing of the return of income; and
5. You take a receipt of the payment made to the Tax Return Preparer and produce the same before the Resource Centre or Assessing Officer, if required,
   

Incentive to Tax Return Preparers:
The Tax Return Preparer shall charge a fee of two hundred and fifty rupees for any assessment year from the eligible person for preparing and furnishing his return of income for that assessment year:

Provided that he will charge no fees for preparing and furnishing the return for any eligible assessment year if the amount disbursable to him as per the scheme notified by the government for that eligible assessment year exceeds two hundred and fifty rupees. If the amount disbursable is less than two hundred and fifty rupees, we can charge the difference between rupees two hundred fifty and the amount disbursable.

Verification:
The verification must be signed by the authorized person before furnishing the return and the name and designation of the person signing the return should also be written. Any person making false statement is liable to be prosecuted under section 277 of the Act.

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Do you know, what is TDS and TCS Deductions.

Friends, TDS (Tax Deducted at source) it means that if your Income overhead of Taxable Limit then Deductor must Deduct TDS from your Income (Salary). On the contrary TCS means Tax Collection at Source.

The purpose of section 206C is that the seller will collect tax from the purchaser in respect of sale of alcoholic liquor, forest timber, tendu leaves, scraps, etc., at the specified percentage as tax on income from dealing with these goods by the purchaser. This is similar to deduction of tax at source by the payer. Such tax collection at source is paid to the government on behalf of the purchasers of these goods.

• Such tax collected at source is to be treated on par with tax deductible at source and therefore should be taken into account while computing advance tax payable by purchaser of goods specified in section 206C.
• Credit should be given to TCS under section 206C from tax on assessed income to compute shortfall in payment of advance tax and for calculation of interest under section 234B - [2012] 20 taxmann.com 801 (Hyderabad - Trib.)

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Where you lunch Complaint if TDS Deductor not issue TDS Certificate (Form 16) as per Income Tax Act, 1961.

Dear visitors, on the post "Is there any provision to punish the Tax Deductor when will not issue TDS certificate (Form 16/16A) within time as per Income Tax Act, 1961." of this blog Mr. Pranab Banerjee comment that where I launch the complaint if TDS Deductor not issue TDS Certificate (Form 16) what will do taxpayee.

Mr. Pranab Banerjee comments that If any employer could not given the Form 16 to their employee, then what will be the Tax Payee and how & where he can complain for non-submit the Form 16. The Form 16 is unique as well as the Tax Return who's Tax Liability below 5,000/-, even the many Tax Payee have not got their Form 16 from their employer and they suffer for taken loan from Bank. How to solve this problem. As per the Tax law it is found the Deductor or Employer can be punished for non submission of Form 16 to their employee @ 100/- P.M. But many of employer ignore to disposed off the Form 16 in due time. Please give some details about how and where the Tax payee can claim the form 16, if the Employer refused to give the Form 16.

Our opinion:
Write a letter to the Deductor incorporating:

• The details of payments done to you and the tax deducted there from.
• Provision of Section 203 which requires 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 despite 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.

Do you want to complaint Click Here.

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CBDT have been taken decisions to clear Backlog of processing of Returns.

Regarding to Clear Backlog of previous Assessment year CBDT has been taken decision vide Instruction No. 01/2012 [F.NO.225/34/2011-ITA.II] to process of Annual Submitting Returns. The issue of processing of returns for the previous Asst. Year and giving credit for TDS has been considered by the Board. In order to clear backlog of returns, the following decisions have been taken:

(i) In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. One lac, the TDS claim may be accepted without verification.

(ii) Where there is zero TDS matching, TDS credit shall be allowed only after due verification. However, in case of returns of ITR-1 and ITR-2, credit may be allowed in full, even if there is zero matching, if the total TDS claimed is Rs. Five thousand or lower.

(iii) Where there are TDS claims with invalid TAN, TDS credit for such claims are not to be allowed.

(iv) In all other cases, TDS credit shall be allowed after due verification.

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When Employer deducted excess TDS from Salary of Salaried Employee, is refundable or adjustable?

This is important task as well as question that when the employer deduct excess Income Tax as TDS from the Salary of Salaried Employee and in this situation the employee can be demand to refund or adjust the excess deducted TDS (Income Tax) if employer deduct excess TDS as income tax from salary of an employee.

Answer of this question is that No. The assessee from whose salary, excess tax has been deducted at source is to approach the assessing officer and submit his claim for refund of excess amount deducted. The employer is no required to make refund of the excess amount. The refund has to be made by the Assessing authority, with whom the amount has been deposited and not the employer.

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Recovery rule, when Deductor Deduct TDS Short?

When the Deductor deduct short TDS from Deductee, then problem creates on the side of Deductor that how to recover Short/Less TDS. Therefore the following rule follow to Recover short/less TDS.

Whether the department could again recover tax from the deductor of tax at source on income which has been fully assessed in the hands of the deductee recipient?

The assessee company hired warehouse for the sale of the soft drink and deducted TDS on warehouse charges. The TDS deducted at 2% under section 194C. The assessing officer held that warehouse charges were in the nature of rent and tax ought to have been deducted at 20% under section 194I. Meanwhile, the lesser has been fully assessed on its income and claimed the refund of the tax. The assessing officer having held the assessing company in default for the shortfall in the amount of TDS wants to recover the shortfall and interest thereon from the deductor company. So he rejects the claim of refund and ordered fresh claim of the tax.

Under circular number 275/201/95/IT(B) dated 29-1-1997, it declares that no demand visualized under section 201(1) should be enforced after the deductor has satisfied the officer in charge of TDS that tax due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) till the date of payment of taxes by the deductee-assessee. [Hindustan Coca cola beverage (P) ltd. Vs. CIT (2007) 163 TAXMAN 355 (SC).]

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What will do when TDS Deductor not issued TDS Certificate despite many reminders & requests?

A TDS Deductor deduction the Tax at Source (TDS) from TDS Deductee is duty bound to:

• Deposit the tax deducted at source within prescribed time to the Government Treasury.
• File the Quarterly TDS return in respect of the Tax Deducted.
• Issue the TDS Certificate to the 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.

For non issuance 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 penalty 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.

Without Quarterly 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.

You can also view 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.

To Check your Tax Credit Click Here
To Calculate your Tax (TDS) For Assessment Year 2012-13 Click Here
If you are not aware about Income Tax Slabe for Assessment Year 2012-13 Click Here

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Latest amendment in TDS Rules w.e.f. 01 November 2011 and onwards.

Income tax department has amend some TDS rules which will be effective from 01-11-2011. The CBDT has also amended e-tds/e-tcs return submission dates w.e.f. 01-11-2011 vide Notification No. 57 issued on dated 24th October, 2011. Earlier there was no change for submission of e-tds/e-tcs return for Government Deductors or Non-Government Deductors. Keeping in view the filing of Form No. 24G regarding data of Government Deductors, due dates for submission of e-tds/e-tcs returns for Government Dedcutors have been changed/increased. Secondly, It is more important that now all data including Non-TDS deducted will be uploaded as mandatory in view of furnishing of declaration under section 197A(complete section detailed given below). In the simple words, now the Form 15G and 15H received by Dedcutors will be reported in e-tds/e-tcs returns as mandatory, earlier It was not mandator as well as Enlarging the scope of grant of TDS credit to person other than the dedcutee.

Income tax department has issued a notification regarding this issue. In this notification income tax department amend rules by:
1. extending the time limit of submission of TDS statements by the Government deductors in view of filing of Form No.24G by them,
2. compulsory uploading of particulars of amount paid without deduction of tax in view of furnishing of declaration under section 197A
3. enlarging the scope for grant of TDS credit to person other than the deductee.

NOTIFICATION:

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification
New Delhi, the 24th October, 2011
INCOME-TAX
S.O. 2429 (E).‐ In exercise of the powers conferred by section 295 of the Income‐tax Act,1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income‐tax Rules, 1962, namely:‐

1. (1) These rules may be called the Income‐tax (Eighth Amendment) Rules, 2011.
(2) They shall come into force on the 1st day of November, 2011.

2. In the Income-tax Rules, 1962, –
(A) in rule 31A –
(a) for sub-rule (2), the following sub-rule shall be substituted, namely:-
“(2) Statements referred to in sub-rule (1) for the quarter of the financial year ending
with the date specified in column (2) of the Table below shall be furnished by –
(i) the due date specified in the corresponding entry in column (3) of the said
Table, if the deductor is an office of Government; and
(ii) the due date specified in the corresponding entry in column (4) of the said Table, if the deductor is a person other than the person referred to in clause
(i).(b) in sub-rule (4), after clause (vi),the following clause shall be inserted, namely:-
“(vii) furnish particulars of amount paid or credited on which tax was not deducted in
view of the furnishing of declaration under sub-section (1) or sub-section (1A) or
sub-section (IC) of section 197A by the payee.”

(B) in rule 37BA, in sub-rule (2), for clause (i), the following clause shall be substituted, namely:-
“(i) where under any provisions of the Act, the whole or any part of the income on which
tax has been deducted at source is assessable in the hands of a person other than the
deductee, credit for the whole or any part of the tax deducted at source, as the case may
be, shall be given to the other person and not to the deductee:

Provided that the deductee files a declaration with the deductor and the deductor reports
the tax deduction in the name of the other person in the information relating to
deduction of tax referred to in sub-rule (1).”

[Notification No. 57 /2011/F. No.142/23/2011-SO(TPL)]
(RAJESH KUMAR BHOOT,)
Director (Tax Policy and Legislation)

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TDS Deductor and TDS Deductor Identification of Liability.

The provisions authorizing deduction of tax at source are contained in Chapter XVIIB of Income Tax Act, 1961. Deduction of tax at source is necessary from any payment falling within the ambit of these deductible categories. TDS provisions are mutually exclusive, meaning that “Payment of any sum shall be liable for deduction only under one section”.

In order to identify the liability of the tax deductor to deduct tax at source, the person responsible for making payment of any such kind of income has to ascertain vis-à-vis the payment being made.

• whether the nature and character of payment attracts TDS liability?
• whether he is the specified person responsible for deduction of tax at source?
• whether the recipient of income is the specified person ?
• the mode, manner and quantum of payment conform to the respective TDS provision.
  

1. The tax deductor must ascertain the facts in respect of all the above four criteria.
2. The tax deductor must also find out whether there is any general (Sec. 196) or specific (prescribed in respective TDS provision itself) exemption from liability to deduct tax at source.
3. Next, the tax deductor must find out whether the Assessing Officer has issued any certificate to the tax deductor in specific cases authorizing either no deduction of tax or deduction at (specified) lower rate. Such direction of the Assessing Officer is binding on tax deductor. (Sec 197A).
4. Further, the tax deductor should take into account the specific cases as provided in the Act, duly verified declaration in prescribed form (in duplicate) furnished by the recipient of income requesting not to deduct tax at source. Where such declaration is received by tax deductor & found to be in order, he should not deduct tax from such payments and also furnish a copy of the declaration on or before the 7th of the following month, to the concerned Chief Commissioner or Commissioner, to whom the Assessing Officer having jurisdiction to assess the tax deductor is subordinate.
5. To sum up, it can be said that, where the nature of payment falls within the ambit of deductible category and all the four criteria as above are fulfilled and further, if there is no such exemption available as enumerated above, the tax deductor must proceed to deduct tax at source at the time of payment or credit as the case may be and comply with all other statutory TDS obligations.
6. No deduction of tax shall be made from any payment to any person for or on behalf of the new pension system trust (10(44).
7. If payee does not furnishes PAN, then the payer has to deduct tax at source at higher of the following:
   

• at the rate specified in the relevant provision of the Act or
• at the rate or rates in force or
• at the rate of twenty percent
  

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Important points to remember while issuing TDS Certificates

The following Important poinst to remember while issuing TDS (Form 16/Form16A) Certificate.

Deductor must Check: Certificate of tax deducted at source shall specify as -

1. Valid permanent account number (PAN) of the deductee
2. Valid tax deduction and collection account number (TAN) of the deductor
(i) book identification number (s) where deposit of tax deducted is without production of challan in case of an office of the Government
(ii) challan identification number(s) in case of payment through bank
(iii) receipt number of the relevant quarterly statement of tax deducted at source which is furnished in accordance with the provisions of rule 31 A
(iv) receipt numbers of all the relevant quarterly statements in case the statement referred to in clause (i) is for tax deducted at source from income chargeable under the head “Salaries”

3. Where tax is deducted before the 1st day of April, 2010, the provisions of this rule shall apply as they stood immediately before their substitution by the Income tax (Amendment) Rules, 2010.

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Remember Deductee may be penalized when Form 26AS does not match with Form 16/16A.

For the first time perhaps the Central Board of Direct Taxes has chosen to consciously undermine a hoary law still extant, the one Parliament has chosen not to repeal. The tax administration has been exhorting taxpayers not to set store by the TDS certificates they receive, but by what appears in the Tax Information Network (TIN) as tax credit available to them by way of advance tax, tax collected at source and deducted at source.

What this meant was no matter what the TDS certificates said, the TIN information would be held as final and sacrosanct. And more galling would be a situation where a taxpayer has paid an installment of advance tax, but can't claim credit for the same because the bank with which the amount has been deposited has goofed up.

TIN information is compiled out of what the banks with which tax deducted at source is deposited upload into the system and TDS certificates are issued by employers and others obliged to deduct tax at source.

The peremptory message is in case of discrepancy between the two, the former would prevail. This was the first step in dethroning of TDS certificates through an administrative fiat without the backing of the Parliamentary approval.

Going a step further, the tax administration now has exhorted the tax deductors not to issue Form 16/16A on the basis of their own accounting information, but on the basis of the TIN information. And this time round, the peremptory order is being flashed by the ticker in red appearing on its Web site. While the ticker might be construed as a belated attempt to forestall and pre-empt the discrepancy between TIN and TDS certificates by aligning the two peremptorily, the bottom-line is effective marginalization nay annihilation of the true worth of TDS certificates.

The solution worked out by the CBDT to the problem of discrepancy inevitable in a dual system is ham-handed, to say the least. For, the Income-tax Act, 1961 still says that income-tax returns have to be filed on the basis of TDS certificates. Thus if a person has got in his possession TDS certificates obtained from various companies aggregating to Rs 25,000 whereas the TIN shows only Rs 20,000 to his credit, he can claim credit in his income-tax return only for Rs 20,000. . How can he be expected to bear the resultant interest liability for short payment of tax? And In the first place, how can the department place a burden on him for payment of Rs 5,000 when nothing is due from him and the fault is that of the system. The ham-handed solution being attempted is to ask these companies to look up the TIN, and not their own records before issuing the TDS certificates.

This begs the question - why go through the farce of TDS certificates when TIN is in any case going to overrule them.

The plausible explanation is the seeming respect for the mandate of Parliament that TDS certificates still rule the roost. The farce, confusion and contradiction are all going to be heightened when the Department goes ahead with its proposal evinced in its answer to a FAQ that soon it will start sending individual intimations of tax deducted at source to taxpayers from out of the information available in TIN.

Should this happen they would have two sets of documents in their hands - TDS certificates and the consolidated statement 26AS emanating out of TIN. The Department would like the taxpayers to junk the former if they do not reflect faithfully what has been stated in the statement of tax deducted i.e. 26AS. The ticker seeks to nip this possibility in the bud by calling upon tax deductors to set store by TIN, and not by their own records while issuing the certificates. Shouldn't Parliament step in and assert itself? Does it want to give the quietus to the TDS certificates regime?

A dual regime is always confusing and calls for needless reconciliation. Hence, a single unified regime is desirable. But the mandate for this has to come from the Parliament. While migrating to this regime it must be ensured that taxpayers are not put to trouble which is likely to happen should derelict tax deductors either sit on the tax deducted or are remiss in depositing them on time. Taxpayers should not be made to bear the cross for the shenanigans of the tax deductors or the inefficiency of the banking system or the TIN.

Requirement to Verify your Form 16/16A:

Financial Year: Select Financial Year i.e. 2010-11
Quarter: Select your Quarter i.e. Q1, Q2, Q3 or Q4
TAN of the Deductor: Enter TAN of Deductor
PAN of the Deductee: Enter PAN of Detuctee
Certificate Number: Enter TDS Certificate No.
Total Amount Deducted: Enter TDS Amount which you deducted
To Verify TDS Certificate Click Here

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Free Auto generate Form 16/16A on NSDL Site

Every one Taxpayee/Assessee knows that their refund status, furnishing Income Tax Return, Challan details etc. on official Site of Income Tax Department and NSDL. Now. golden facility provided by NSDL and other allied partner web site (Government) to all their Taxpayee/Assessee that auto generate form No.16/16A.

Followed the Procedure to Auto Generate Form No. 16/16A:

1. The deductor has to register their TAN with nsdl website. Click on the "Online TAN Registration" available in the home page of www.tin-nsdl.com and follow the due procedures mentioned therein.
2. Upon registration the deductor would be allotted an Reference Number. Note down this number.
3. The deductor will also receive an email from NSDL informing the Reference Number, User Name, Password...etc
4. After confirmation of registration formalities, go to www.tin-nsdl.com website, and Login to TAN Account.
5. Provide the User Name, Password and TAN Number.
6. Provide the details as asked for by the website for every quarter. You will receive by email a text file from nsdl.
7. Now the said text file needs to be converted into a pdf file / TDS certificate (Form 16A). Requisite conversion software provided in the website itself.
8. Once converted your TDS certificates will be saved in your computer automatically at the defined path.
9. Take print out of the certificates and check the same for 100% accuracy.
10. If found in order, affix seal and signature and issue the certificate to the deductees
    

NSDL is yet to announce such facility for Salary TDS Certificate. For the time they have made available such facility only for Form 16A (non salary cases)

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Verify your TDS Certificate Form No. 16A with NSDL

Friends, NSDL has recently provided a online facility to our Taxpayee for verification of TDS Certificate Form No. 16 or Form No. 16A which is issued by the deductor without mentioning e-TDS/e-TCS Acknowledgement or any Receipt No. regarding relating to this. The CBDT has issued circular No. 3/2011 dated 13th May, 2011 as per this circular generation of Form No. 16 or 16A with NSDL is mandatory for Companies and Bank. To download complete circulate of CBDT click here.

See the following picture.

Requirements:

Financial Year: Select Financial Year i.e. 2010-11

Quarter: Select your Quarter i.e. Q1, Q2, Q3 or Q4

TAN of the Deductor: Enter TAN of Deductor

PAN of the Deductee: Enter PAN of Detuctee

Certificate Number: Enter TDS Certificate No.

Total Amount Deducted: Enter TDS Amount which you deducted

To Verify TDS Certificate Click Here

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